Tuesday, September 23, 2008
Full court press.
Emperor Paulson is testifying in front of the Senate as I write this piece, but I have some preliminary observations. It is obvious that he is using this moment of crisis (or as the Chinese would say moment of opportunity) to push forward on his Wall Street debt reduction plan. He very well knows that neither party wants to be viewed as anti helping America so close to the elections. So he is taking away space and time from Congress, in order that they make a costly (700 billion) turnover. His argument is oddly amusing. He is saying that these "various assets and instruments" are very complicated. So complicated are they that only experts from Goldman and Morgan understand them. Thus, he needs a clean and simple plan to have a resolution. Funny guy! The next amusing area is in the logic behind this bailout. He's saying that Main Street needs to give money to Wall Street so they can turn around and lend it back to Main Street. Well if Main Steet needs the money, why don't they just keep it in the first place. The reason is simple. This is your classic bait and switch routine where we talk about house prices and complex derivatives, but in point of fact are just covering Wall Street's bad bets. I hope the Senate has the courage to stand up to Caesar, but I highly doubt it.