Jonathan Ernst/Reuters
Henry Paulson, left, and Ben Bernanke at a House hearing. Under the plan, shares of Fannie Mae and Freddie Mac would be worth little or nothing, and any losses on mortgages they own or guarantee would be paid by taxpayers.
Sometimes it makes me sick and tired to see Bernanke and Paulson , especially when they sit in house hearings and have the right to lie in public or just remain pathetic snake-oil salespeople they are. Paulson standard answer he believes in the markets and a strong Dollar - why when is the FED having a negative interest rate setup if markets can handle themselves and without the special lending facility of the FED at least 3-4 Brokers more were already bust.
First of all lets see why he sits on his chair - he has two strong motives:
1. Due to a conflict of interest a secretary of the treasury has to sell his stockholdings - to reduce the harm to him he has not to pay any taxes on the sale of his Goldman shares - well that made him between 100-200 mil. profit in unpaid taxes.
2. He has the position of the best informed insider one can imagine since the famous PPT (Plunge Protection team) reports to him as one example
Lets see what he has achived serving his country:
- Houseprices are crashing
- Stockprices are crashing
- Dollar is crashing
- GSE are (almost) bankrupt
- America is heading for depression
etc. etc.
A comittee member was quite frank to the point by saying nobody believes inflation is at 4% and that there is no recession. Bernanke and Paulson were just stumbling around and no one should give them credit in there - these guys have done nothing they could be proud off. Rather the opposite claiming one year ago everthing is contained shows how poor their judgement was. In a single event failure a politician can pretend it never happened (which is not how it should be anyway) but a dynamic expanding problem asks for a different approach - problems do not go away by ignoring them. Well Paulson will be fired in six months but more important is that Bernanke and Geithner need to be replaced as well. Lets see how wise Obama will be - these are the most crucial positions for his presidency plus the Energy secretary and the vacant 3 FED govorners. Its a unlucky coincidence for America that Obama is unexperienced and already contaminated with a Clinton dependency and other people to make shrewd decisions. His economic advisor comes from a rather republican and mainstream mindset and has no experience - a protege of Rubin (Goldman).
McCain has no clue about economics and his economic suggestions do not carry the power to tun around this mess , since he is from the wrong party to begin with - they are responsible for most of this mess. That is the way history took its path for other superpowers on their way down as well. That is something which crossed my mind that they let win Obama since nobody can stop the mess in any 4 year term - so very likely the first black president will mark a huge downturn which was not his resposibility. Bush is cooking the numbers so he can walk out with a statistical positive score in economical terms. Midterm elections the Republicans can takeover the houses with a frustrated public and the Presidency in 4 years is probably their calculation.
Goldman has a new member in the game undersecretary Steel becomes CEO of Wachovia.
They are now in control of the FED (head of capital markets at FED former Goldman), Citigroup (Rubin) , Merill (Thain and two other guys) and now Wachovia. When those guys meet in the country club they or in an obscure place (where Soprano's would gather) they have the power to make markets go their way - just kidding. There cannot be a conspiracy going on, can it??
Finally as I mentioned earlier Fuld the CEO from Lehman is running out of time - actually no time left. As Cramer made a good suggestion yesterday Fuld should buy with his own money 1 mio. shares or a few mo. shares rather to show his faith in his company. Otherwise he will soon be forced to stepdown - probably senator Corzine (ex Goldman CEO ) can take over his position.
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