Tuesday, January 13, 2009
Hank Paulson - Not Stupid, Evil
MARIA BARTIROMO: The fed increasing its balance sheet by one and a third trillion dollars in a couple of months time. The fe-- the treasury injecting money from tarp, taking stakes in bank. Can we afford this as a country?
HANK PAULSON: Maria, we can afford it as a country. We're a rich country. And (COUGHING) if history teaches us any lesson, it is that when you have an historical problem like this, if we don't react to it quickly, and react to it with force quickly, the long-term economic clock-- consequences will be much more severe. Now, again, a good deal of this treasury issuance is going to be the fund investment programs that really aren't expenditures. For instance, the $250 billion bank capital investment program. This-- this is money that will come back into the treasury. And it will come back into the treasury with a profit. So all of it won't be spending. And again, I-- I think a big part of this success will be the-- the focus that the-- and the policy choices that the next administration makes, as it relates to their stimulus program. And I'm hoping that it will be-- relatively short-term, because, as you pointed out, we have long-term fiscal challenges. And one of the things that I started working on as soon as I came down here were the long-term fiscal challenges-- social security and health care challenges. And I think that if, in the first year, the next team in Congress starts to address some of these fundamental long-term problems, it will make investors and others around the world much more comfortable with some of the things we need to do in the short-term, to deal with a very-- present and real-- you know, ec-- economic-- downturn we have in this country.
MARIA BARTIROMO: But do you worry about foreigners becoming unwilling to lend? I mean, how do we know that they're continue buying our-- our debt? Who is gonna finance, and at what interest rates-- what we have right now?
HANK PAULSON: Well, Maria, right now, there's great demand for our treasury securities. And at very low interest rates. I've spent a great deal of time personally talking with investors overseas, talking with investors in the Middle East-- China, Japan. And I will say to you that everything they indicate to me is they feel comfortable with the things we're doing. They like the fact that we're dealing forcefully and stepping up to meet the challenges and to stabilize our financial system. And to protect-- their interests, and that we-- we as-- as a nation respect property rights and respect foreign investments.
You young'uns aren't going to believe this but Maria Bartiromo used to be considered a real babe about 10-12 years ago.
I remember once, when CNBC condescended to report from the floor of the Philadelphia Stock Exchange, all the horned neanderthals from the Home Depot option pit hooting and hollering at her while she gave a live report. The *money honey* scooted out of there plenty fast and probably never returned. What class we had!
This is a to-be-continued post.
I just wanted to highlight a couple of lines:
Maria, we can afford it as a country.....
This-- this is money that will come back into the treasury. And it will come back into the treasury with a profit.
Well, Maria, right now, there's great demand for our treasury securities.
Yeah, there was *great demand* from Miami condos in 2005 as well!
This post will be revisited, as our national debt spirals out of control, the treasury's *profits* fail to materialize, and the Treasury market crashes.
Hank Paulson is a crook of the highest order; the Maria Bartiromo's of the world (and I'm not deprecating her) simply aren't Captious enough to call his BS.
CaptiousMaria - WAIT Hank! HISTORY TELLS US lot of things. It's tells us that fiat currencies have a failure rate of 100%, that governments since the beginning of time have debased their coinage, that the solution to debt has never been more debt, that statism is a national death sentence, that propping up *zombie banks* (Japan) only prolongs economic agony, and that great civilizations have always died when the mercantilists ran the show.
FURTHERMORE, RECENT HISTORY TELLS US that when you ran Goldman Sachs you petitioned the government for increased leverage (From 10-1 to 40-1 for investment banks) and then when the party ended, you and the Goldman Sachs cabal co-opted the Federal government to bail yourselves out.