Use access key #2 to skip to page content.

WSJ Tearing Paulson a New Corn Chute



August 19, 2008 – Comments (15)


A taxpayer recap for Fan and Fred would be far different than most Wall Street deals. Typically, the banker's job is to balance the competing interests of the existing shareholders with the need to raise money at a price the market will bear. That can't be the priority here. If taxpayers have to ante up, the only justification is to protect the larger financial system. Existing Fannie and Freddie shareholders should be wiped out and managers and directors lose their jobs. We think Mr. Paulson should already have eliminated managers and private holders as a price of the recent bailout legislation. But if he lets either survive after taxpayers are forced to inject cash, the Treasury chief should be run out of town.

The "nationalization" has already happened. Paulson's clownish guarantee that's not a guarantee only solidified the notion that Fannie and Freddie have been made insolvent by the greedy, short-sighted gamblers running them. The stock would already be in the pennies if Paulson hadn't cooked up his pumping scheme with Daniel Mudd, and the bonds would have been dumped into the Pacific had they not sent a pacification team to Asia to reassure the bagholders there that American Taxpayers would compensate them for their foolhardy investments in the American Housing Ponzi Scheme of 200X.

Let a real nationalization happen for cryin' out loud. Wipe out existing equity. Force a haircut on bondholders in order to compensate the American taxpayers for the valuable (so far, unpaid) guarantee that Paulson has so unethically plastered onto Fannie's and Freddie's paper. Get rid of the clowns running the companies, replace them with trustees whose job it is to shore them up and get them ready to be chopped into pieces and sold back onto the market.

Get the government out of the wellspring position in the housing ponzi scheme once and for all, and let the risk takers out there -- instead of the taxpayers -- foot the bill for all the ignorance, greed, and idiocy that accompany periodic credit bubbles.

15 Comments – Post Your Own

#1) On August 19, 2008 at 7:30 PM, nuf2bdangrus (< 20) wrote:


Report this comment
#2) On August 19, 2008 at 8:17 PM, RVAspeculator (28.40) wrote:

Very well said my friend.....

Report this comment
#3) On August 19, 2008 at 8:24 PM, eldemonio (97.84) wrote:

What are my chances of getting back 1500 of my CAPS points after the energy sector took a huge dump last month? 

Report this comment
#4) On August 19, 2008 at 8:30 PM, jahbu (80.83) wrote:

Its the lazy new generation that do not save enough.  This isnt Wall Streets fault.  Those fine patriots tried hard to get everyone to own a home.  Quit blaming the rich for our nations problems.  If the middle class would ride bicycles or use roller skates to get to their job at Walmart instead of driving those big SUV's we wouldnt have these problems.  The middle class folks are wasteful and use to much energy.  The middle class should eat just bread and flouridated tap water for 5 years if that is what it takes to pay off their debts.  That is what real men do!  Pay off their usury fees even if it takes working 24 hours a day  7 days a week.  

Wall Street should sale all the middle class folks houses to the Chinese and the Middle East and sale off all the highways and put toll booths on them to really teach the middle class a lesson.   Wall Street will get revenge on the middle class for what they did to their banks.  Payback will be brutal.  No more social security or healthcare for the old folks thats for sure.  

Shame on the working man for not paying his usury fees,

Gotta go now, gotta hop a flight to DC.  Gotta lobby some politicians to provide aid to some poor country so that my companies can make a big profit off the American taxpayers.  Life is good!

Pay your usury fees and taxes, 

Petey Peterson.

Report this comment
#5) On August 19, 2008 at 9:01 PM, feiled (< 20) wrote:

Dead on Bent!!!

Report this comment
#6) On August 19, 2008 at 9:16 PM, TMFBent (99.24) wrote:

That is what real men do!  Pay off their usury fees even if it takes working 24 hours a day  7 days a week.  

You jest, but that's what most of the "hope now" crap amounts to. It's "immoral" for underwater homedebtors to run from their bad economic decisions and just leave jingle mail. But when underwater corporations (like the revolving-bankruptcy airlines) cry uncle and reorganize, welshing on many of their bets, then it's just business.

Too much of he loan modification schemes presented as "saving home ownership" are simply a less-bad set of payments for the banks, but a nearly-as-bad idea for the homedebtors stuck in their rapidly-depreciating McMansions.

I'm not trying to absolve the players in the Ponzi scheme of their responsibilities. All those "victims" were anything but. They were hoping to achieve the American Dream of getting a pile of wealth without doing anything but signing their name and watching American Idol.

But let's not pretend that loan mods keeping people underwater are doing them any favors. It's a last ditch attempt by the banks to curry favor with politicians and know-nothing voters, and if it locks homedebtors into their bubble traps instead of pushing them into the uglier but more rational option (leave the keys and walk) then you can bet no one on the money side of that bet will shed a tear.

Report this comment
#7) On August 19, 2008 at 9:18 PM, TMFBent (99.24) wrote:

"What are my chances of getting back 1500 of my CAPS points after the energy sector took a huge dump last month?"

If you were more entangled in the financial world, Paulson and Bernanke would refund them for you, via a withdrawal from the taxpayer hide. And it would be for the good of all, you can be sure.

Report this comment
#8) On August 19, 2008 at 9:23 PM, TMFBent (99.24) wrote:


One concern at Treasury is that market conditions can deteriorate quickly, necessitating a fast response. Mr. Paulson was heavily focused on the question during his long return flight home from the Beijing Olympics last week.

WTH is Paulson doing on vacation in Beijing when the entire financial structure of the U.S. is so precarious? Or was he glad-handing the Chinese in order to keep them from wrecking the dollar?

Report this comment
#9) On August 19, 2008 at 9:42 PM, Zeti (38.35) wrote:

Wow, truer word have never been said. Kudos, Bent.

Report this comment
#10) On August 19, 2008 at 10:21 PM, jahbu (80.83) wrote:

Calm down or I will tell congress to implement mandatory retirement accounts and you will all have to pay my companies commision fees!  Muahahahahaahaaa

Social securtiy bad, privatized mandatory retirement accounts good.

What joy it will be having not only taxpayer money to play with, but another 10% of their paycheck!

I love it when a plan comes together!


Report this comment
#11) On August 19, 2008 at 10:39 PM, wm052 (32.52) wrote:

Of course Mr. Paulson will save wall street - see wikipedia clip


Henry Merritt "Hank" Paulson Jr. (born March 28, 1946) is the United States Treasury Secretary and member of the International Monetary Fund Board of Governors. He previously served as the Chairman and Chief Executive Officer of Goldman Sachs, one of the world's largest and most successful investment banks.

Oil companies can suck gas - LOL

Housing can burn to the ground - not funny

But banks and GS are somehow sacred! Where is true capitalism? If I run a business into the ground where is uncle Sam!? reaching into my pocket to save fat cats.

bugger all - ride 'em ALL out of town on a rail! THESE ARE NOT ELECTED PEOPLE

jahbu - great - keep stealing what you can while you can - our elitists have been doing it for decades. just remember nothing lasts forever.


Report this comment
#12) On August 20, 2008 at 12:52 AM, lquadland10 (< 20) wrote:

Is the IMF Broke? Or could it be that Paulson doesn't want to be here when the country collaspes? The North American Union. THE AMERO    US Government Immorality Will Lead to Bankruptcy They did a clock of oil what is the clock for intress? 75 MILLION AN HOUR!!!!!!!!!!!!!!!!!!!!!!!!

Report this comment
#13) On August 20, 2008 at 9:49 AM, givmeabreak (29.00) wrote:

When will people get so pissed (like me) that a march on Washington/wall st occurs.

I am in. I have enough pitchforks for 5 people. Who's with me?

At some point enough is enough. How do these guys get away with the stuff they do? Oh, I know, b/c they have no fear of being physically harmed for the evil they do.

That must change...

Report this comment
#14) On August 20, 2008 at 10:15 AM, camistocks (58.27) wrote:

nice post, florida! I agree!

Never mind the current stock holders, as they will be whiped out . FNM and FRE will survive, IMO as they will be nationalized. Of course current stock holders will be not very happy... but bond holders and mortgage owners will be satisfied.

Report this comment
#15) On August 21, 2008 at 2:04 PM, XMFSinchiruna (26.56) wrote:

Great post, Bent!

Report this comment

Featured Broker Partners