Posts filed under “Bailouts”

Picking Apart the Plan

If you missed my boy Chris Whalen of Institutional Risk Analytics on SquawkBox, you missed some seriously straight talk:



on the $700B bailout, with Chris Whalen, Institutional Risk Analytics and CNBC’s
Steve Liesman

See also: Chris Whalen of the The Institutional Risk Analyst:

Good stuff . . .

Category: Bailouts, Credit, Taxes and Policy, Video

Mayor Mike Bloomberg for Treasury Secretary

This morning on SquawkBox, my fishing pal Chris Whalen of Institutional Risk Analytics called for Paulson’s and Bernanke’s heads.

That is the perfect opening for Marion Maneker, who presents us with this guest essay. Marion is the Managing Partner at Colle, Hochberg and Grey, publishers of the Art Market Monitor. He is a former editor at New York Magazine and the Publisher at the HarperCollins business imprint. Marion has been observing the political and economic scene from a vantage point within the financial press for many years. His take is wry, sharp, and unique. I would not bet against his perspectives.


It isn’t easy being Secretary of Treasury these days. One minute you’re down on your knees begging the Congressional leadership not to blow up the world’s banking system; the next you’re fielding calls from the Chinese threatening god-knows-what if you don’t make them whole on the GSEs. Just look at the month Hank Paulson has had.

One of the effects of the market shock and bailout plan has been a renewed focus on the Secretary of the Treasury. Once a role for a worthy business figure whose job amounted to repeating the mantra “a strong dollar is in America’s interest”– usually as the dollar is sinking–the job has become something very different now and for the forseeable future. If Hank Paulson gets his way and Congress declares martial law over the financial community, the Treasury Secretary is going to be more Proconsul than cabinet functionary.

First, Paulson received nothing but praise for the way he handled the crisis; then he unveild his bailout plan. Suddenly it seemed like everyone turned against him — though Anatole Kaletsky had questioned his moves already. No matter what happens to the bailout, Paulson isn’t likely to be asked to stay on after the transition. So we have to start asking the question: who is going to be riding this tiger next?

This isn’t a question like, who would the new president appoint to the Supreme Court? Where the Treasury Secretary was once a high level consiglieri, the position is rapidly becoming a much more complex and intense job with no natural constituency . . . and little margin for error. Congress hates you; main street hates you; and pretty soon — with all that bickering as a distraction from its own misdeeds — Wall Street is going to start complaining again. As a cabinet position, it may soon overshadow the Secretary of State in political importance and be no more satisfying for the office holder than trying to make progress with the Israelis and Palestinians.

Having said that, the job is still a career capstone or a stepping stone to greatness. The speculation about the possible nominees under the next administration began a few weeks ago when the Wall Street Journal baldy asked if the Fed’s Timothy Geithner and FDIC’s Sheila Bair were leading candidates.

No disrespect to either Geithner nor Bair, both of whom look to have big careers ahead of them on either side of the public/private divide, but even a traditionalist’s view of the job would put it beyond their reach. The media focus requires some star-power, which Geithner still hasn’t got, and international experience. The GSE bailout revealed one half of the Treasury Secretary’s job: dealing with pressure from abroad. From news reports, we know that the holders of American debt–namely, government agencies for economic powerhouses like China who Daniel Gross points out currently hold mearly $1 trillion or 21.4% of the GSE debt–were on the phone with Paulson a few seeks ago demanding reassurances. Next thing we got was the Fannie/Freddie takeover.

Holding off our creditors abroad is going to take someone with real international stature and visibility. That’s why everyone is so relieved that Paulson is currently in the job. But being the former head of Goldman wasn’t always credential enough. Remember that Robert Rubin had to serve an apprenticeship in the White House while the grand old man of the Senate Finance committee, Lloyd Bentsen, kept the seat warm.

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Category: Bailouts, Credit, Politics

Shiller on the Bailout

Professor and "Irrational Exuberance" author nevertheless says he’s a fan of Henry Paulson, just not of his proposal:

Category: Bailouts, Credit, Video

OTS Puts WaMu into Recievership; JPM Buys Assets

WaMu is now toast, forced into the waiting arms of JPM.

Here are the specifics from the Office of Thrift Supervision:

Receivership – With insufficient liquidity to meet its obligations, WMB was in an unsafe and unsound condition to transact business.  OTS placed WMB into receivership on September 25, 2008.  WMB was acquired today by JPMorgan Chase.  The change will have no impact on the bank’s depositors or other customers. Business will proceed uninterrupted and bank branches will open on Friday morning as usual. 



See also:
WaMu Fails, Is Sold Off to J.P. Morgan
Biggest Banking Collapse in U.S. History; Government Arranges a Deal to Safeguard Huge Thrift’s Deposits Branches

JPMorgan Buys WaMu’s Deposits as Thrift Is Seized
Ari Levy and Elizabeth Hester
Bloomberg, Sept. 25 2008

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Category: Bailouts, Credit, Derivatives, Finance

Bloomberg: Blame the Ratings Agencies (Part II)

Category: Bailouts, Credit, Derivatives

Media Appearance: CNBC’s Fast Money (9/25/08)

Category: Bailouts, Media

We should toss him a couple of bucks…

The Congressional Bailout attitude:





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Category: Bailouts

WSJ: Bailout Discussion

Here’s the video I did for the WSJ on Tuesday — it was the #2 video on the site yesterday:

“Barry Ritholtz, the writer behind the popular economics blog “The Big Picture,” discusses his soon-to-be-published book, “Bailout Nation.” He tells WSJ’s Christina Jeng the government might be too quick to come to the rescue and it might not even benefit the economy. (Sept. 23)

Category: Bailout Nation, Bailouts, Books, Video

Alternative Ideas for Rescue Plans

Category: Bailouts, Credit, Derivatives, Real Estate, Taxes and Policy

Quote of the Day: Jim Welsh, on the Bailout

Category: Bailouts, Credit, Taxes and Policy