Results tagged “henrypaulson”

The NY Times looks at how Lehman Brothers head Dick Fuld tried to save the firm, with the help of government officials, based on reporter Andrew Ross Sorkin's book, Too Big To Fail. A choice quote: Then-Treasury Secretary Hank Paulson telling Fuld he won't call Bank of America's CEO, "I think it’s a hard sell, but I think the only way you’re going to do it is go to him directly. I’m not going to call Ken Lewis and tell him to buy Lehman Brothers." Of course, Paulson did pressure BoA to buy Merrill Lynch—and now Lewis is on his way out.

The NY Times has an interesting article wondering about Henry Paulson's many calls to his former company, Goldman Sachs, while he was Treasury Secretary and overseeing bailouts. Sure, Paulson had sold his shares and obtained ethics waivers, but the Times reports, "During the week of the A.I.G. bailout alone, Mr. Paulson and Mr. Blankfein spoke two dozen times, the calendars show, far more frequently than Mr. Paulson did with other Wall Street executives. On Sept. 17, the day Mr. Paulson secured his waivers, he and Mr. Blankfein spoke five times. Two of the calls occurred before Mr. Paulson’s [ethics] waivers were granted." Lawyer and former executive director of the NY State Commission on Government integrity Peter Bienstock said, "If it can happen on a phone call and can happen without public scrutiny, it destroys the standard because then anything can happen in that fashion and any waiver can happen." Paulson's apparently busy writing a memoir, so he didn't comment.

Despite falling into a heap of controversy over the summer that led to a congressional investigation at his own request, Congressman Charles Rangel will hold onto his prestigious position as Chairman of the Ways and Means Committee. Despite GOP Leader John Boehner calling for his removal, Speaker Nancy Pelosi and other House Democrats unanimously voted to keep him as chair. Rangel said that he would like to see the alternative minimum tax eliminated, but generally supports the Obama tax plan--something he will have sway over within the committee that oversees tax regulation. And when asked what Rangel would like from whomever Obama chooses as the next Secretary of the Treasury, Rangel responded, “Him sharing with me whether [Henry] Paulson makes any sense at all," saying that Americans losing their jobs and health benefits were not on Paulson's agenda whatsoever.

The Dow tumbled 411 points (down 4.73%) while the Nasdaq fell 5.17% and S&P 500 fell 5.19%. According to the NY Times, "Wall Street spent the day looking at Washington for guidance, and investors did not like what they saw, analysts said."

Bloomberg News reports that Treasury Secretary Henry Paulson wants to use part of the $700 billion bailout "to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets." Paulson said earlier today, "Illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards. This is creating a heavy burden on the American people and reducing the number of jobs in our economy" and acknowledged buying the troubled assets of financial institutions was "not the most effective" use of bailout money. In other news, the Dow, Nasdaq and S&P 500 are down about 3% due to, according to CNBC, "doubt about the effectiveness of government intervention seeped deeper into the market." (AmEx has lost more than 8%.)

After key lawmakers felt a bailout plan agreement would be reached, talks "imploded" as the day progressed. Here's how the NY Times reports what happened:

The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.

Continue reading "Bailout Talks Stall, Market Looks to Decline ... Or as Bush Says, "If Money Isn’t Loosened Up, This Sucker Could Go Down""

Yesterday was a mixed day for the financial sector. Congress still had questions about the government's proposed $700 billion bailout plan for financial firms, sending the market down. But the after-market close announcement that Warren Buffett would invest $5 billion in Goldman Sachs has sent stock futures higher. But now there's word that the FBI is searching for possible fraud at Fannie Mae, Freddie Mac, Lehman Brothers and AIG.

Sure, as the NY Times reports, "Bailout Talks Advance" between Congress and the Bush administration over the $700 billion financial institutions bailout. But the two sides have differences of opinions on things like executive pay, reducing "mortgage payments of borrowers facing foreclosure," and whether the taxpayers should get a stake in companies the U.S. bails out. The Wall Street Journal also details some of the issues with the plan, from both Republicans and Democrats.

Mayor Bloomberg appeared on Meet the Press to talk the economy, and he said Treasury Secretary Henry Paulson was the right man for the job (for right now). Bloomberg also touted more transparency, "The first thing we need is more disclosure, visibility. The problem is that nobody knows what any institution owns and what the terms of the securities they own are and what they are worth. If that was out in the public domain then there wouldn't be this crisis of confidence."

Treasury Secretary (and former Goldman Sachs chairman and CEO) Henry Paulson is on Meet the Press right now (and other programs), but in the mean time, he told ABC News' George Stephanopoulos that the White House will try to have foreign firms included in the $700 billion bailout. Paulson said, "We are talking very aggressively with other countries around the world. If a financial institution has business operations in the United States, hires people in the United States...they have the same impact on the American people as any other institution." Well, Senator Chuck Schumer is telling Congress to pass the bailout, saying it needs to be passed soon. Paulson just told MTP's Tom Brokaw this is a "humbling" experience. Mayor Bloomberg will be up next.

Last night, the Federal Reserve Bank of New York "held an emergency meeting" between heads of Wall Street banks and officials including Treasury Secretary Henry Paulson, NY Fed President Timothy Geithner, and SEC Chairman Christopher Cox. The officials want a plan to discuss the faltering markets as it continues to batter financial institutions, and, per the NY TImes, "Geithner told the participants that an industry solution was needed, no matter what, and that it was not about any individual bank." This comes as a deal to save Lehman Brothers might not happen this weekend. One financial services firms labeled the big banks "toxic."

With conservatives wondering about the Bush administration's decision to bail out mortgage companies Freddie Mac and Fannie Mae, White House press secretary Dana Perino shifted blame on Congress, "President Bush initiated a call years ago to try to reform this system because he did not want the status quo to continue. Unfortunately, Congress didn't act on that." She added that Bush decided to act now because of Fannie and Freddie's impact on the economy. The NY Times' first sentence notes that while Bush is the "nation's first MBA president," it was Treasury Secretary Henry Paulson who was in charge--a deputy press secretary said Bush wanted Paulson "in the driver's seat." As for the next president, Bloomberg reports that John McCain "may privatize" the institutions while Obama "sees a federal role in housing."

Treasury Secretary--and former Goldman Sachs head--Henry Paulson said he agreed with President Bush's off-the-record remarks that Wall Street "got drunk." At a fund-raiser, Bush said of the financial sector, "It got drunk and now it's got a hangover. The question is how long will it sober up and not try to do all these fancy financial instruments." Yesterday on Meet the Press, Paulson broke down the problem, "In terms of Wall Street, there was too much leverage in the system and more leverage than was appropriate and more than people recognized, because the leverage came into the system in the form of highly complex, structured products, which were difficult to understand. So there was excess leverage, excess complexity." Oh, and Paulson doesn't want to serve in the next administration.

Today, Treasury Secretary Henry Paulson is making remarks at the New York Public Library about the economy, and, according to text of the speech, he'll say he believes Congress will pass a bill to "boost confidence" in failing government-sponsored Fannie Mae and Freddie Mac, which, as Bloomber News puts it, "account for almost half of the $12 trillion mortgage market." Paulson has also been making a number of public appearances recently--Face the Nation, CNBC, various Times reporters and editors-- to boost confidence in the bill itself. In other financial news, with new CEO Robert Steel (former Treasury Undersecretary), Wachovia is announcing $8.9 billion in losses; the bank said it was leaving the wholesale mortgage business yesterday.