Soros on Paulson
Paulson cannot be allowed a blank cheque by George Soros
Mr Paulson’s record does not inspire the confidence necessary to give him discretion over $700bn. His actions last week brought on the crisis that makes rescue necessary. On Monday he allowed Lehman Brothers to fail and refused to make government funds available to save AIG. By Tuesday he had to reverse himself and provide an $85bn loan to AIG on punitive terms. The demise of Lehman disrupted the commercial paper market. A large money market fund “broke the buck” and investment banks that relied on the commercial paper market had difficulty financing their operations. By Thursday a run on money market funds was in full swing and we came as close to a meltdown as at any time since the 1930s. Mr Paulson reversed again and proposed a systemic rescue.
September 24th, 2008 at 10:13 pm
your blog is awesome. keep it up.
September 25th, 2008 at 2:55 am
I am no swashbuckling financier, but isn’t it to Paulson’s credit (no pun intended) that he imposed “punitive” conditions on the $85b loan to AIG? I think he has made it pretty clear that he himself won’t be doing due dilligence and valuation work on these securities, he is a deal maker with a lot of really good contacts. Granted he isn’t Warren Buffett or Jck, but I think we could do a lot worse.
September 25th, 2008 at 7:12 am
Sam,
A cynic might respond that Paulson is willing to punish anyone and everything to protect his ‘good contacts’ at GS and JPM. Shareholders at BS, FRE, FNM, LEH all seem to have been sacrificed so GS can keep prattling about how they make money 255 days of the year.
What was that $138 billion advanced by JPM to LEH and then paid back to JPM by the FED? Surely nothing untoward there!
And Paulson sycophants will laugh all the way to bank.
September 25th, 2008 at 3:22 pm
Looks like we have a $250B deal with equity, price transparency, and no mechanism for determining fair value. My big hope is that it takes them a month or more to work through the details and then another month to get is set up properly. If we’re lucky no tranche gets funded. If we’re unlucky probably only one tranche — unless McCain gets elected and then UBS Phil will screw the taxpayer to the wall…
September 30th, 2008 at 10:31 pm
WHY don’t y’all math brahmins KNOW??? Toxic waste is gonna come back in fashio …
just you wait an’ see…the guvernment will make a profit…from sea to shinin sea!
Then yall can dust off yer stochastic markov models an stuff yer pockets wit real moneee…
programming in VB, or C…
y’all are d best mathematicians … better than rating agensees.