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Stunned Congressional Leaders



September 19, 2008 – Comments (11)

Mish has a quote which I feel compelled to copy:

"It was a room full of pople who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”

When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.” "



11 Comments – Post Your Own

#1) On September 20, 2008 at 12:17 AM, rd80 (95.68) wrote:

Let's follow the money:

Just who were the top recipients of campaign contributions from some companies in the news lately:

FNM and FRE - #1 Sen. Dodd, #2 Sen Obama, #3 Sen Kerry, #4 Sen Bennett
LEH - #1 Sen Clinton, #2 Sen Obama, #3 Sen Schumer, #4Sen Dodd
AIG - #1 Sen Dodd, #2 Sen Obama, #3 Sen McCain, #4 Sen Clinton
- #1 Sen McCain, #2 R. Guiliani, #3 Sen Clinton, #4 Sen Obama
BAC - #1 Sen Obama, #2 Sen Clinton, #3 Sen McCain, #4 Sen Dodd

Here's OpenSecrets Heavy Hitter list if you want to see who's busy buying our congress critters.

Wonder if the meeting was somber because they were worried about our financial system or somber because they were watching future campaign contributions fade away.



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#2) On September 20, 2008 at 12:18 AM, angusthermopylae (37.86) wrote:

Dorks, indeed....

A lot of folks here on CAPS (and I did too) have been pointing out that, while Paulson, Pelosi, & Company have been "surprised," the mulling and arguing has been going on here for quite a while.  No surprises in what, just how.

The trouble with this article is not the "History was sort of hanging over it" comment that they stated publicly, but that Bernanke and Paulson were giving a doom&gloom scenario in private, whilst the last few months (and even today!) they were talking about how "this can be fixed" and "we shall overcome."

Reminds me of Bear Sterns and others:  "Things are just fine, folks" on Thursday, then emergency meetings over the weekend to stem the blood flow...

I know, I know...CAPS is supposed to be about investing.  But how can you invest properly when the game keeps getting re-rigged every few days?

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#3) On September 20, 2008 at 12:22 AM, Tastylunch (28.69) wrote:

They are just stunned that the chickens came home to roost in their terms. When you are used to just passing the buck to the future it must be very shocking to know you actually have to do something about problems and soon.

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#4) On September 20, 2008 at 12:55 AM, jstegma (28.60) wrote:

Luckily we didn't have to wait for Congress to do something about the problem or we'd all be screwed.

The problem as it stands is far from solved, but at least it didn't blow up this week.   I don't envy Bernanke and Paulson being stuck with trying to fix the mess we're currently in, that's for sure.  I just hope for all our sakes they come up with a way to mitigate it that avoids catastrophe and get the economy going again within a year or two.  Congress certainly isn't any help.  Then both Presidential candidates are clueless about what to do.  If all this stuff doesn't work, you can blame Bernanke and Paulson if you like, but I'll give them credit for at least trying while everyone else in the government jacks off. 

This is the most useless Congress in the history of the world.  Bernanke should have just sent them an email rather than wasting his time talking to them.

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#5) On September 20, 2008 at 1:22 AM, dinodelaurentis (86.16) wrote:

i'm shocked! shocked i say!

i didn't get a harumph out of that man! :D

congressmen stunned! oh to be a fly on that wall...

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#6) On September 20, 2008 at 3:37 AM, abitare (30.15) wrote:

The best thing you can hope for is the Presidential cannidate you like, does NOT win. The next President is in for a rough ride.

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#7) On September 20, 2008 at 10:49 AM, kdakota630 (29.12) wrote:

It's a good thing they waited until the very late minute before addressing this and concentrating on things far more important, like steroids in baseball and pro wrestling.

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#8) On September 20, 2008 at 12:12 PM, MakeItSeven (31.83) wrote:

So, y'all have figured out that the US was facing a total financial meltdown within a matter of a few days ?

Very smart people, I'd say.  But I don't think even alstry said that and he is the biggest alarmist around here.

The other side of the coin of this "The sky is falling and Congress knows nothing" is the Shock Doctrine, or the Disaster Capitalism.  In a nutshell, it is a doctrine that people will take anything the government does to them as long as it is presented as a cure to prevent a worse disaster.   The ultimate purpose of that is to accumulate all the wealth to the top echelon of the society.

Well, you see how wealth is being transferred right in front of your eyes while you go about your daily fair-and-balanced politician-bashing routine. 

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#9) On September 20, 2008 at 3:59 PM, dwot (29.15) wrote:


About a year and a half ago now I came to the conclusion that there would be a melt down of some kind.  I've gone on and on that pensions are going to be hard hit and that is simply because their holdings are going to decline.  I think people are going to get in the range of half of what they think they are getting.

I figured the wealthy would have the fewest options on where to hide and would take the hardest hit.  I've wondered where the heck Buffett is keeping his "cash" safe and I don't see how you keep that kind of wealth safe.

Many of those conservative "safe" bonds are going to become junk bonds.

To be honest I expected this kind of thing last year.  I was 100% out last July, and then there was the August crash and I tinkered back in till about November.  But I came to the conclusion that what I was doing was fool hardy greed when I expected the markets, bonds, etc. to give back so much and that I might continue to do well, but I was being extremely foolish because things could go bad very quickly.  So I got out completely.

And it was having problems moving some funds, the company just didn't do it until I filed a complaint with the regulatory authorities.  Incompetent or in trouble, I don't know, but that was my wake up call that the risks weren't worth potential rewards.

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#10) On September 20, 2008 at 4:30 PM, bostoncelitcs (59.50) wrote:

Christopher Cox....2008 Wall St.'s.....Michael D. Brown.  4 more years.....I don't think so.

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#11) On September 24, 2008 at 6:23 AM, Fool (28.75) wrote:

OK. Treasury Secretary Henry M. Paulson was working for Goldmansack until 2 years ago.....I I the only guy who knows this????

He is an uneducated "street smart" guy who is only looking for his own benefits. I would not be surprised if he took this job because he wanted to escape prison. What he did at Goldman sacks was 100000000 worst than what Enron CEO did. He should be in jail and now he is on C Span talking about saving us????!!!!!!! 

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