Henry’s Paulsons Newest 700 Billion Defensive Comments

Henry’s Paulsons Newest 700 Billion Defensive Comments
November 15, 2008 · 4 Comments>
Today, I wanted to take a moment to touch on excerpts of this weeks interview with Treasury Secretary Henry Paulson’s interview defending his decision to change how the $700 billion financial bailout fund is used, telling CNBC that the spreading credit crisis forced the government to focus on injecting capital directly into banks instead of buying up toxic mortgage assets. ( I will share at a later date, my personal thoughts on the mortgage shake up - Robin Weirich, e-Propertylinks.)
Paulson stated in his interview. “We have this limited pool of resources—big, but limited, $700 billion; how do we use that, to gain maximum impact, is by putting capital in (banks).” He also said the money could be used to shore up markets for scrutinized consumer debt such as car loans, student loans and credit cards, which could help restore credit flows to U.S. households. What changed was when we saw the commercial paper markets freeze up altogether, so good, mainstream corporations weren’t able to raise money. For more on this statement, click:
Paulson told a news conference on Wednesday .
Setting up a system to buy up the bad mortgage debt from financial institutions also had become cumbersome, and Paulson said the Treasury needed to act quickly to stabilize the credit markets. As a result, the Treasury began to use the fund—known as the Troubled Asset Relief Program, or TARP—to inject capital directly into banks.
“The major purpose of the TARPwas to stabilize the financial system, first and foremost, and the number two, to get lending going,” Paulson added. “I think the system has been stabilized. I don’t think people are going to bed at night wondering which major financial institution might have a problem.” ( Itotally disagree! - Robin Weirich )
Still, the change in strategy has been sharply criticized in Congress and Wall Street. Earlier Friday, a House committee took one of Paulson’s deputies, Neel Kashkari, to task for what one member said was “a bait and switch.” Paulson again deflected such criticism, saying he was obligated to change strategies as the situation changed. “You’re never going to get me to apologize for being so prudent as to change a strategy when the facts change, and to do it in a way that protects the taxpayer,” he said
( We have all figured out, he isn’t going to admit that his administration made any errors in Judgement in the moves they took or that the knee jerk reactions they took daily enabled this crisis to escalate to the levels it is today - Robin Weirich, e-PropertyLinks ) Please either post your comments on this bailout plan or e-mail me directly at Robin Weirich
Robin Weirich CBW
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