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« The 2008 Financial Crisis Was NOT Caused By Terrorists Unless By Terrorist You Mean Hank Paulson | Main | Video: CFTC Chairman Gary Gensler Says More Resources Needed To Police $340 TRILLION Derivatives Market »
Thursday
Mar032011

Inside The Shiny Head Of A Financial Terrorist

Inside Paulson's Mind 

Originally published in Sep. 2009

Writer Todd Purdum and Vanity Fair have published an extremely interesting piece on former Goldman Sachs CEO, Treasury Secretary and TARP terrorist Henry Paulson.  Purdum had access to the Hammer for over 6 months and reveals it all to VF.  The juicy revelation seems to be the admission from Hank that he knew early on that capital injections would be required instead of an asset buy.  This should not be surprising.  The Hammer knew all along that an asset purchase program would be impossible to create and launch quickly.  But it sounded more palatable than asking for $700 billion to lend directly to the banks.  So he sold TARP under a false premise and then changed the wording of the final bill.  Except we knew this already.  Anyone remember the language change in the final TARP legislation?  I covered the story back in February but can't find it in the site archives.  Phrasing was inserted into the bill which would grant the Treasury Secretary "the authority to make direct investments in troubled banks."  No one noticed until a few weeks later when the policy shift toward direct investment was announced. 

 

 

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Reader Comments (18)

Sheila Bair from this morning:

http://www.cnbc.com/id/32651797
Sep 2, 2009 at 7:31 AM | Registered CommenterDailyBail
A mortgage-industry trade group is calling for Congress to transform Fannie Mae and Freddie Mac into several smaller privately held companies that would issue mortgage securities carrying an explicit government guarantee.

The proposed framework, to be released Wednesday by the Mortgage Bankers Association, would give successor entities to Fannie and Freddie the authority to create securities backed by certain types of mortgages. The new companies would guarantee the securities against defaults on the underlying mortgages.

The new companies would also pay fees into a federal insurance fund, which would guarantee interest and principal payments to bondholders if the companies were ...

http://online.wsj.com/article/SB125186013970178403.html
Sep 2, 2009 at 8:06 AM | Registered CommenterDailyBail
Investment Outlook
Bill Gross | September 2009
On the “Course” to a New Normal

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2009/Gross+Sept+On+the+Course+to+a+New+Normal.htm
Sep 2, 2009 at 8:07 AM | Registered CommenterDailyBail
Pualson is the main person to blame for this recession.
Sep 2, 2009 at 9:56 AM | Unregistered CommenterSell Short
I'm not really bothered by the "bait-and-switch" from asset purchases to direct injections, as the latter are simpler and generally safer. The former probably would have resembled the dreaded PPIP, which correctly set off all sorts of alarm bells in the blogosphere and some media. Paulson was clearly in over his head with this crisis, denying it until being panicked by it, but he made a turn for the wiser in this instance.

_Most_ of TARP seems to have been done with the idea of being paid back for our investments. The evil parts of it, a bazillion $ in gifts to reckless idiots through the AIG conduit and a ludicrous $300 billion guarantee for Citi, are what really frost me. I've seen somebody raise the point that if we wanted to prop up the investment bank counterparties to AIG, we should have TARP'ed them *directly*, lending them money rather than effectively giving it to them. I don't see why that wouldn't have worked.

To be sure, the bailouts overall still bother me, because they strengthen an already imposing banking oligarchy by rescuing big incompetents while letting small incompetents die. Industry consolidation will just cause the customer (i.e. the same taxpayer whose money is saving these giant clowns) to be reamed even more.

But I do look at TARP as stratified, and mentally break it down into "semi acceptable" money-making parts and "truly evil" money-losing parts. Likewise, I put much of TARP into a more preferential category than things like PPIP.
Sep 2, 2009 at 10:13 AM | Unregistered CommenterAssassin
^ slight clarification on "and 'truly evil' money-losing parts":

that includes *potentially* money-losing for the gigundo Citigroup guarantee.
Sep 2, 2009 at 10:14 AM | Unregistered CommenterAssassin
Sorry Assassin, I've got to totally disagree...Money taken under false pretenses is fraud, period.

It's like getting a bank to loan you money for a house, then at the last minute writing in "or whatever the fuck else I want to spend it on". Oh, and let's not forget why Paulson asked for $800 Billion (I just wanted a really big number). If this was not an orchestrated theft to save his buddies, this clown is one of the stupidest human being to ever walk the planet. Are we sure his thumbs are real? This guy has no business saying any member of congress asked idiotic questions.

http://www.youtube.com/watch?v=7nn8N0W903M

He called the bottom in housing, Q1 2007

Oh and Paulson didn't "inherit" the banking crisis, he created it by asking for 40 to one leverage:
"In addition, we and other global firms have, for many years, urged the SEC to reform its net capital rule to allow for more efficient use of capital. This is the single most important factor in driving significant parts of our business offshore, so that our firms can remain competitive with our foreign competitors risk-based capital standards must become the norm. The SEC has made it clear that risk-based capital rules can be implemented only when the Commission is confident that firms employing value-at-risk models have robust credit and risk management policies in place."

Risk management policy? Unless you count swindling taxpayers into bailing you out!

DB got it right in the headline "FINANCIAL TERRORIST", Hankenstein did more to destroy the fabric of America and Capitalism than Osama bin Laden could ever dream of. He should be hung for treason, or forced to wear a dunce cap the size of the Washington Monument. I will not stand by and let anybody spin him into anything else.
Sep 2, 2009 at 2:20 PM | Unregistered Commentermark mchugh
It's pretty disgusting to watch those shills fellate that demon of a human being.

Paulson started his work as Treasury Secretary by circumventing payment of capital gains tax on a 500m sale of Goldman Sachs stock. He effectively dodged 200m in taxes. That of course pales in comparison to what he did while in power.

If we can overturn the powers that be in this country this turkey may just end up on trial for his laundry list of treasonous activity. I hope that during that trial we can give new meaning to the phrase "forced liquidation".
Sep 2, 2009 at 2:21 PM | Unregistered CommenterWill
I agree that asset purchases (PPIP) are the worse of 2 evils...so I get your point assassin...but it's still lying to get what you want...

But as Mark pointed out, this is the main guy responsible for the SEC rule change on leverage....so it's hard for me to think of him positively in any way.

Without the leverage change, everything else would have been manageable...overnight the demand for securitized products tripled...

@Will

Though I hope like you that he is somehow forced to pay for his misdeeds, I'm afraid Paulson has gotten away free...so as retribution, we expose and ridicule him whenever possible...
Sep 2, 2009 at 3:34 PM | Registered CommenterDailyBail
I remember about a year ago today getting one of my last TIME magazines in the mail (canceled it due to its complete lack of journalistic integrity)--Paulson was the 'savior' and 'whiz kid'. I'd never heard of him before and was impressed by the article. Wow--was that article ever wrong! And remember how he was pushing for a very vague 2 paged bill?--for 'flexibility'? omg--the guy is one smooth SOB. Look in his eyes--he is utterly soulless. He has aged terribly, too--lol--the stress is really getting to him. Good.

DB--Your headline is WAY better.
Sep 2, 2009 at 8:12 PM | Unregistered CommenterSonic Ninja Kitty
"Nobody puts Baby in a corner."

Hey SNK.
Sep 2, 2009 at 11:13 PM | Unregistered CommenterGobias Bluth
I remember that Time issue...

The problem is that most financial reporters aren't skeptical enough by nature...when was the last time fraud has been discovered by a biz reporter...there are no investigative voices left in financial journalism...it's all about snagging the big interview, which skews objectivity...
Sep 3, 2009 at 2:08 AM | Unregistered CommenterDailyBail
Mark.

Here is the link for that Paulson quote...it's all the way at the bottom...

http://banking.senate.gov/00_02hrg/022900/paulson.htm
Sep 3, 2009 at 4:58 AM | Registered CommenterDailyBail
Download PDF report: FED "DEN OF THIEVES"

http://itsnotrealmoney.com/reports/

The Fraud Of The Federal Reserve Bank / Companies / Banking Stocks
The Fraud Of The Federal Reserve Bank / Companies / Banking Stocks

By: Captain_Hook

Far too many look for easy ways to get rich quick these days, only to be disappointed or shocked when reality bites in the end. Because of this there are no shortage of Ponzi like schemes characterizing the financial landscape, one by one being found out to be frauds, with Bernie Madoff at the top of the list in history thus far. The public was shocked when they discovered the size of the Ponzi scheme he was able to put together and perpetuate for so long, as usually, operations like this fall apart much quicker.
http://www.marketoracle.co.uk/Article12972.html
Sep 3, 2009 at 9:25 AM | Unregistered CommenterKen
When will you organize revolt, creative writers?

http://www.pushhamburger.com/

AND BAMBOOZLED GENERATION ON MESSAGE BOARDS..COWARDS;NO BALLS TO REVOLT

LOL

CDC H1N1 forced quarantine docs leak
Zero Hedge
September 2, 2009

Although the current H1N1 virus does not have lethal genes yet, we have been implicitly promised by the national and global health authorities that novel H1N1 will soon return with such genetic ‘upgrades’, just as it did in 1918. Here at ZeroHedge, we are expecting a flock of economic black swans soon, and a pandemic — whether real or hyped — may be part of this flock. An economic collapse will be no doubt be triggered soon , and it will be convenient for the political elites to blame the collapse on an external factor, such as a pandemic or a war. Furthermore, the fall H1N1 pandemic may be a convenient pretext by which dangerous levels of expanding social control can be established by elites which have proven themselves utterly corrupt and morally bankrupt.

On to the documents.

http://www.zerohedge.com/article/cdc-h1n1-forced-quarantine-docs-leak
Sep 3, 2009 at 11:29 AM | Unregistered CommenterKen
Paul Craig Roberts-- Facing Armageddon and the Hard Solutions It Will Take to Turn Things Around

http://www.opednews.com/Podcast/Paul-Craig-Roberts--Facin-by-Rob-Kall-110302-284.html

You can find a few more names here.....

in other financial news....

State Law Would Require Bicycle Licenses for All New Yorkers

http://gothamist.com/2011/02/28/state_law_would_require_bicycle_lic.php
Mar 3, 2011 at 2:26 PM | Unregistered Commenterjohn
eah, lets invent a whole new industry of non-producing drones to make the U.S. an impossible place to live. Lousy banks own over 50% of home equity and hi -velocity computer trades rape whatever profit margine that they can find for every penny. And non-productive hi-velocity computer trading is over 50% of all stock trades these days. And now with this shit, the brokers can collect yet another level of cash commssions and equity from the savings not yet pillaged. And don't forget the interest money needed to float the other existing levels of genetic slag who will never attain the level of primary producer and must rely on colonies and fools.

Take everyone espousing this crap and fix them to a wall with a screw-gun. I will not live my life having to ask permission to step on the ground. Nor will you. Take your queens and Hank Paulson and give them labor therapy at minimum wage and the company store. We SHALL overcome.
Mar 3, 2011 at 8:27 PM | Unregistered CommenterHoward T. Lewis III

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