'Goldman Sachs Guys' Messed Up Bailout: Hovde

Well, that says what I would say about this scandal and President Bush's incompetence. What is the reason he lets Goldman run the country with their most incompetent people? What do investment bankers understand about derivatives? Congress should have never allowed Paulson to carry out this project. This guy has a 100% negative track record as Secretary - he has not accomplished one single goal. On the contrary, he has had a negative impact on the marketplace as he produced mixed signals and no leadership at all.

Excerpt:
http://www.cnbc.com/id/27696791

The Treasury Department made a big mistake with the initial plan to price toxic assets in the financial system and is now bungling the recapitalization of banks, Eric Hovde, CEO and portfolio manager at Hovde Capital Advisors, said Thursday.

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"There was no way they could properly value the assets without wiping out the capital in the banking system," Hovde told "Squawk Box." "There was no way to properly manage the assets (and) there was no way to dispose of the assets, without cratering the real-estate markets any further."

(The Treasury is a) "bunch of Goldman Sachs guys," he said. "We have a 35-year-old technology investment banker running the TARP that has no background in financials or in real estate or was around during the last banking crisis."

"Then they switch and change to what should have been done and that's injecting capital into the banks," Hovde said. "However, they've even messed that up."

Confusion in DC - or do we know now why Paulson wanted immunity in his first draft for the TARP program? It is strange that Goldman with no losses so far received taxpayers money from TARP, which never made sense to me. Wells Fargo rejected the money as Goldman should have done as well. The way how the Treasury deals with AIG is a scandal anyway, as they have to renegotiate the deal a third time now - that does not make any sense to me either.

Frank Vs. Paulson: Just Who Has It Right On Mortgage Defaults?

Posted By:Diana Olick

AP Barney Frank

So here I am on Capitol Hill covering a hearing at the House Financial Services Committee (starring Chairman Barney Frank D-MA), entitled Private Sector Cooperation with Mortgage Modifications—Ensuring That Investors, Servicers, and Lenders Provide Real Help for Troubled Homeowners.

I'm thinking that it's just going to be a private-sector bashing by Barney for all that the private sector is not doing to save troubled borrowers. Instead, I hear the Chairman open his remarks with a plea to Treasury to use some of that TARP money to buy troubled loans:

"I believe that we still have a need for that funding to be used to put the federal government in the position of being the owner, so we can do the kind of sensible write-down of mortgage payments to avoid foreclosure that is in the interest of the economy as a whole."

Imagine my surprise when I learn that at the very same time the Chairman is speaking those words, the Treasury Secretary is saying just the opposite, just about a mile down Pennsylvania Avenue:

"Purchasing troubled assets—our initial focus—would take time to implement and would not be sufficient given the severity of the problem."

So no more dreams of TARP money in the mortgage investors' Christmas stockings. This as those very same private sector investors are telling the Chairman of the Financial Services Committee that while they would really like to modify as many loans as possible, they don't always have the legal authority to do that.