Archive for the ‘Paulson’ Category

The Times Are not Right For a Liberal Agenda

November 28, 2008

In the old days — from the Venetian Republic to, oh, the Bear Stearns rescue — if you wanted to get rich, you did it the Warren Buffett way: You learned to read balance sheets. Today you learn to read political tea leaves. If you want to make money on Wall Street (or keep from losing your shirt), you do it not by anticipating Intel’s third-quarter earnings but by guessing instead what side of the bed Henry Paulson will wake up on tomorrow.

By Charles Krauthammer
The Washington Post

Today’s extreme stock market volatility is not just a symptom of fear — fear cannot account for days of wild market swings upward — but a reaction to meta-economic events: political decisions that have vast economic effects.

As economist Irwin Stelzer argues, we have gone from a market-driven economy to a politically driven economy. Consider seven days in November. On Tuesday, Nov. 18, Paulson broadly implies that he’s using only half the $700 billion bailout money. Having already spent most of his $350 billion, he’s going to leave the rest to his successor. The message received on Wall Street — I’m done, I’m gone.

Facing the prospect of two months of political limbo, the market craters. Led by the banks (whose balance sheets did not change between Tuesday and Wednesday), the market sees the largest two-day drop in the S&P since 1933, not a very good year.

Read the rest:
http://www.washingtonpost.com/w
p-dyn/content/article/2008/11/2
7/AR2008112702052.html?hpid=
opinionsbox1

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Fighting the Financial Crisis, One Challenge at a Time

November 18, 2008

WE are going through a financial crisis more severe and unpredictable than any in our lifetimes. We have seen the failures, or the equivalent of failures, of Bear Stearns, IndyMac, Lehman Brothers, Washington Mutual, Wachovia, Fannie Mae, Freddie Mac and the American International Group. Each of these failures would be tremendously consequential in its own right. But we faced them in succession, as our financial system seized up and severely damaged the economy.

By Henry M. Paulson, Jr.
Treasury Secretary
Op-Ed, The New York Times

Treasury Secretary Henry Paulson addresses a gathering of corporate ...
Treasury Secretary Henry Paulson addresses a gathering of corporate CEOs, Monday, Nov. 17, 2008. (AP Photo/J. Scott Applewhite)

By September, the government faced a systemwide crisis. After months of making the most of the authority we already had, we asked Congress for a comprehensive rescue package so we could stabilize our financial system and minimize further damage to our economy.

By the time the legislation had passed on Oct. 3, the global market crisis was so broad and so severe that we needed to move quickly and take powerful steps to stabilize our financial system and to get credit flowing again. Our initial intent was to strengthen the banking system by purchasing illiquid mortgages and mortgage-related securities. But the severity and magnitude of the situation had worsened to such an extent that an asset purchase program would not be effective enough, quickly enough. Therefore, exercising the authority granted by Congress in this legislation, we quickly deployed a $250 billion capital injection program, fully anticipating we would follow that with a program for buying troubled assets.

There is no playbook for responding to turmoil we have never faced. We adjusted our strategy to reflect the facts of a severe market crisis, always keeping focused on our goal: to stabilize a financial system that is integral to the everyday lives of all Americans. By mid-October, our actions, in combination with the Federal Deposit Insurance Corporation’s guarantee of certain debt issued by financial institutions, helped us to accomplish the first major priority, which was to immediately stabilize the financial system.

Read the rest:
http://www.nytimes.com/2008/11/18/opinion
/18paulson.html?_r=1

Chances Dwindle on Bailout Plan for Automakers

November 14, 2008

The prospects of a government rescue for the foundering American automakers dwindled Thursday as Democratic Congressional leaders conceded that they would face potentially insurmountable Republican opposition during a lame-duck session next week.

By David M. Herszenhorn  
The New York Times
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At the same time, hope among many Democrats on Capitol Hill for an aggressive economic stimulus measure all but evaporated. Democratic leaders have been calling for a package that would include help for the auto companies as well as new spending on public works projects, an extension of jobless benefits, increased food stamps and aid to states for rising Medicaid expenses.

But while Democrats said the stimulus measure would wait until President-elect Barack Obama takes office in January, some industry experts fear that one of the Big Three automakers will collapse before then, with potentially devastating consequences.

Despite hardening opposition at the White House and among Republicans on Capitol Hill, the Democrats said they would press ahead with efforts to provide $25 billion in emergency aid for the automakers. But they said the bill would need to be approved first in the Senate, which some Democrats said was highly unlikely.

Read the rest:
http://www.nytimes.com/2008/11/14/business/
14auto.html?_r=1&hp=&adxnnl=1&oref=slogin&a
dxnnlx=1226649694-VV22vNLQxrIE1qxIf8tqEQ

A Lemon of a Bailout

November 14, 2008

When you get gemons, “make lemonaide” the saying goes.  But when spending taxpayer billions for a fiscal and economic recovery plan or “bailout” that almost nobody likes, a lemon can get in the way….

By Charles Krauthammer
The Washington Post
Friday, November 14, 2008; Page A19

Finally, the outlines of a coherent debate on the federal bailout. This comes as welcome relief from a campaign season that gave us the House Republicans’ know-nothing rejectionism, John McCain‘s mindless railing against “greed and corruption,” and Barack Obama‘s detached enunciation of vacuous bailout “principles” that allowed him to be all things to all people.

Now clarity is emerging. The fault line is the auto industry bailout. The Democrats are pushing hard for it. The White House is resisting.

Underlying the policy differences is a philosophical divide. The Bush administration sees the $700 billion rescue as an emergency measure to save the financial sector on the grounds that finance is a utility. No government would let the electric companies go under and leave the country without power. By the same token, government must save the financial sector lest credit dry up and strangle the rest of the economy.

Treasury Secretary Henry Paulson is willing to stretch the meaning of “bank” by extending protection to such entities as American Express. But fundamentally, he sees government as saving institutions that deal in money, not other stuff.

Democrats have a larger canvas, with government intervening in other sectors of the economy to prevent the cascade effect of mass unemployment leading to more mortgage defaults and business failures (as consumer spending plummets), in turn dragging down more businesses and financial institutions, producing more unemployment, etc. — the death spiral of the 1930s.

Read the rest:
 http://www.washingtonpost.com/w
p-dyn/content/article/2008/11/13
/AR2008111303348.html?hpid=opinionsbox1

U.S. Is Investing $250 Billion in Banks: Bush Addresses Financial Crisis

October 14, 2008
WASHINGTON — President Bush, speaking from the Rose Garden Tuesday before the markets opened in New York, called the government plan to invest up to $250 billion in banks essential to help assure stability in the nation’s financial system.

Under the proposal that is similar to those initiated by European governments on Monday, President Bush said the Treasury Department would invest up to $250 billion in banks, receiving an equity stake in return.

“This is an essential short-term measure to ensure the viability of the American banking system,” Mr. Bush said.

The United States would also guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

The Federal Deposit Insurance Corporation would also offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

In addition, Mr. Bush said the Federal Reserve would start a program to become the buyer of last resort for commercial paper, a move intended to help businesses get the money they need for day-to-day operations.

Mr. Bush’s comments were the latest in series by administration officials and government leaders around the world to try to calm the financial turmoil and help stave off a deep recession. And markets around the world have rebounded on news of the coordinated efforts by various governments. The Dow Jones industrial average gained 936 points, or 11 percent, the largest single-day gain in the American stock market since the 1930s and future indexes were substantially higher. European markets were up at least 5 percent on Tuesday after rising nearing 10 percent Monday.

The president described the four measures as “unprecedented and aggressive.” Each of the new programs protects taxpayers and is “limited and temporary,” Mr. Bush said.

“These measures are not intended to take over the free market,” he said, but to safeguard it.

It will take time for our efforts to have their full impact,” Mr. Bush said, “but the American people can have confidence about our long-term economic future.

As the White House has done since the House rejected the initial bailout legislation, Mr. Bush sought to assure Americans that the efforts were necessary to protect their savings and retirement.

“I recognize that the action leaders are taking here in Washington and in European capitals can seem distant from those concerns,” he said. “But these efforts are designed to directly benefit the American people by stabilizing our overall financial system and helping our economy recover.”

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at a meeting Monday afternoon d. He essentially told the participants that they would have to accept government investment for the good of the American financial system, according to officials.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

Read the rest:
http://www.nytimes.com/2008/10/15/business/economy/15bailout.
html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1223989371-GE
1byNeb0SM8dBDEOs0rOg

U.S. Investing $250 Billion in Banks: Financial ‘Bailout’ Continues to Intill Hope

October 14, 2008

By Mark Landler
The New York Times

WASHINGTON — The Treasury Department, in its boldest move yet, is expected to announce a plan on Tuesday to invest up to $250 billion in banks, according to officials. The United States is also expected to guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

A euro coin and one US dollar bill. The dollar has dipped against ... 

And the Federal Deposit Insurance Corporation will offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

The Dow Jones industrial average gained 936 points, or 11 percent, the largest single-day gain in the American stock market since the 1930s. The surge stretched around the globe: in Paris and Frankfurt, stocks had their biggest one-day gains ever, responding to news of similar multibillion-dollar rescue packages by the French and German governments.

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at an afternoon meeting, officials said. He essentially told the participants that they would have to accept government investment for the good of the American financial system.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

President Bush plans to announce….

Read the rest:
http://www.nytimes.com/2008/10/14/business
/economy/14treasury.html?_r=1&hp&oref=slogin

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Asian Markets Soar On Signs of Renewed Hope

By JEREMIAH MARQUEZ, AP Business Writer 18 minutes ago

HONG KONG – Asian markets soared for a second day Tuesday, led by a record 14 percent jump in Tokyo, after Wall Street rallied from its worst week ever on optimism that government rescue efforts will heal the crippled global financial system.

Read the rest:
http://news.yahoo.com/s/ap/20081014/ap_on_bi_ge/world_
markets;_ylt=AhU9ssfZ2fvgiOjAnyoc0oSs0NUE

A businessman walks past an electonic board showing the Hang ...
A businessman walks past an electonic board showing the Hang Seng Index. Global stock markets staged spectacular gains Monday as governments pumped hundreds of billions of dollars into banks crippled by the credit crunch, coaxing newly confident investors to buy shares.(AFP/Mike Clarke)

A South Korean woman passes a foreign exchange facility in Seoul. ... 
A South Korean woman passes a foreign exchange facility in Seoul.(AFP/File/Jung Yeon-Je)

Global Economic Meltdown Gives Developing Nations Upper Hand: U.S. and NATO Eclipsed?

October 12, 2008

“In a very bizarre way, roles have been reversed in the global economy. The typical troublemakers of the global economy, the emerging markets, are actually now the world’s creditors…”

By David R. Sands
The Washington Times

As shell-shocked central bankers and finance ministers gather in Washington to confront the world’s financial meltdown this weekend, that grinding noise in the background is the sound of the global balance of power shifting.

In sharp contrast to past crises — from the Latin American debt problems of the 1980s to the Asian and Russian currency collapses of the 1990s — the emerging markets of the developing world boast the strong balance sheets and deep financial pockets while the United States and Western Europe lurch from crisis to crisis.

Read the rest:
http://www.washingtontimes.com/news/2008/oct/
12/financial-crisis-reshapes-world-order/

 

 

Treasury’s Paulson unveils financial plan

March 31, 2008
By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON – The Bush administration is proposing the most sweeping overhaul of the financial regulatory system since the Great Depression.

The plan would change how the government regulates thousands of businesses from the nation’s biggest banks and investment houses down to the local insurance agent and mortgage broker.

Treasury Secretary Henry Paulson unveiled the 218-page plan in a speech in Treasury’s ornate Cash Room. He declared that a strong financial system was important not just for Wall Street but also for working Americans.

The administration’s plan was already drawing criticism from Democrats that it does not go far enough….

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http://news.yahoo.com/s/ap/20080331/ap_on_go_ca_st_pe/fed_overhaul;_
ylt=AkgOZSBc1zePyHV7bypb6tus0NUE

US slaps broad new sanctions on Iran

October 25, 2007

By MATTHEW LEE, Associated Press Writer 

WASHINGTON – The Bush administration imposed sweeping new sanctions against Iran Thursday — the harshest in nearly three decades — cutting off key Iranian military and banking institutions from the American financial system for Tehran’s alleged support for terrorism and nuclear weapons ambitions.

In the broadest U.S. unilateral penalties on Iran since the takeover of the U.S. Embassy in 1979, the administration slapped sanctions on Iran’s Revolutionary Guard Corps, a main unit of its defense ministry, three of its largest banks and eight people that it said are engaged in missile trade and back extremist groups throughout the Middle East.

Secretary of State Condoleezza Rice and Treasury Secretary Henry Paulson said the moves would further isolate the Islamic republic’s government by further distancing it from …..

Read the rest at:
http://news.yahoo.com/s/ap/
20071025/ap_on_go_ca_
st_pe/us_iran;_ylt=
AuVOzl7HHg.YDm
AAOSUP.o.s0NUE
 

Bush Again Proves Soft on China

September 7, 2007

By John E. Carey
Peace and Freedom
September 7, 2007

President Bush again showed himself to be soft on China at this week’s Asia Pacific Economic Cooperation (APEC) summit in Australia.

For good or bad, this American administration is following a conciliatory, pro-business policy line toward China.  Some believe this leaves human rights issues at best marginalized and perhaps totally forgotten.

During this week, western newspapers were alive with reports of Chinese government computer hacking — including into private Pentagon files.

President Bush was asked if he intended to discuss China’s hacking with president Hu Jintao of China.  The president said, “I may.”

In fact, he did not.  The president emerged from the meeting with the Chinese President to say, “He’s an easy man to talk to. I’m very comfortable in my discussions with President Hu.”

This strikes us as reminiscent of the president’s first term reflection on Russia’s President Vladimir Putin: “I looked into Putin’s soul and saw a man I could do business with.”

Since late last year, a Chinese ship-attack submarine surfaced within sight of a U.S. aircraft carrier before being detected for the first time in history, China demonstrated an anti-satellite missile capability the first time in history, China has continued to verbally bully Taiwan, and Human Rights Watch and other advocacy groups have given China their lowest ratings for lawful behavior in the international community.

American allies including Japan, South Korea, Taiwan and Australia have expressed concern over China’s military investment and build up.  Prime Minister Howard of Australia has called China’s build up “destabilizing.”

China teamed with Russia a few weeks ago to conduct their largest combined military exercises ever.  And China, along with Russia, has blocked almost all U.S. initiatives in the U.N., including sanctions against Iran for its nuclear program.

China has joined Russia in denouncing U.S. and NATO plans for missile defense in Europe.

U.S. military leaders believe China is supplying arms to the insurgents in Iraq and to Hezbollah in Lebanon, among other places.

China has been complicit in genocide in Darfur, Sudan.

China has failed to meet U.N. environmental goals and China lied repeatedly about poisoned food and other unsafe products it exports around the world.

China has the highest rate of death by execution in the world.

President Bush has looked the other way.

When President Hu invited President Bush to the 2008 Olympics in Beijing, Bush immediately agree — then said he was only interested in the sports at the Olympics and not the politics.  Yet we have historic precedent that leaders like Adolph Hitler worked hard to get the Olympics in their homeland because the political facet of this showcase cannot be discounted.

Washington Times analyst Bill Gertz reported in today’s editions that, “The president repeatedly has called relations with China ‘complex’ but has avoided all criticism of China’s military activities, including the provocative anti-satellite missile test in January, and growing Chinese information warfare capabilities. He has limited criticism of China’s repressive political system to its lack of religious freedom.”

“It’s the Goldman Sachs China policy,” said one defense official, referring to former Goldman Sachs executives Henry M. Paulson Jr., now Treasury secretary, and Joshua B. Bolten, White House chief of staff.

The bottom line: America has put money and deals before human rights.

Related:

Bill Gertz, “Inside the Ring”
http://washingtontimes.com/apps/pbcs.dll/article?AID=/20070907/NATION04/109070053/1008

China sees ‘danger’ in Taiwan’s U.N. intent

China repeats denial of military hacking

China: ‘Trust but verify’ needed

As China Roars, Pollution Reaches Deadly Extremes

Permanent President Putin?

Cold War Redux?

Distrustful of China’s Government at Almost Every Turn

If China Has Nothing to Hide, Why Do They Hide So Much So Often?

Japan Worried By North Korea, China

Australia PM: China military rise risks instability