Podcast: Henry Paulson, contained

Exclusive—New PWG, new market paradigm

Welcome to today’s edition of Global Megabank NA’s Consistent Inconsistencies, coming to you from the banks of the Potomac. Here with me today, perhaps the most important person in the world’s financial markets—outside China anyway!—Treasury secretary, and chairman of the President’s Working Group on Financial Markets, Henry Paulson. Mr Secretary, how are you today?

Very contained. Call me Hank. Wait…come to think of it, you can call me Sir.

Thank you sir. And if I may, I’d just to take off my journalism hat for a moment and, as a friend, maybe slobber appealingly, perhaps nuzzle up to your knee a little bit, and drool while I watch your every move with my best worshipful doe-eyed look. Is that all right?

If you must; I guess you saw Maria at Pete Pete’s party a couple of weeks ago.  Oh all right. Hang on. Excuse me. Ben. Ben. Come here. We’re going up when I’m done here. Sit. SIT. Good boy. Sorry, he gets like that when he sees a helicopter. Anyway. Sorry.

You said that you’d have an important announcement for us today.

Yes, I’m pleased to announce that the President’s Working Group on the Financial Markets—Ben, sit!—has today approved the implementation of new market paradigm. We call it MMM, or Marketing Markets to a Model. Instead of buying and selling securities, everything’s going to be marked to a model. Of course, it was thoroughly tested in the complex leveraged mostly-mortgage derivatives markets, without all those tiresome regulators watching, so we know it’s flawless.

Wow. That sounds really great. Where did you get the idea?

Smart lad by the name of Byrne. Impressed the hell out of Cox. His dad used to be in the insurance business with Buffett. Actually the really clever part that he came up with is that nobody will ever have to sell a security—after all, that’s just the same as shorting. Everything will just go up, 10-12 percent a year, forever.

Do you think that will help contain market volatility?

It contains volatility. Contains credit risk. Contains inflation. Contains contagion. Contains all kinds of stuff. It’s a fabulous container. Even Moody’s cheered right up and said they’d put MMM raaattings on everything, one step up from AAA. With everything contained, my work is done. That helicopter’s taking Ben and me back to Illinois, so I can fold mindle and stipulate the ethanol subsidence checks in piece. Had a nice farewell party with the President last night. Can you tell?

Sir, I was just going to ask...

Anyway, sorry, gotta fly. Ben. BEN. Come here. Good boy. Stupid dog. Cox never gives me this trouble. Although it’s funny, everytime I walk Cox past the Investment Company Institute building, he always pees on a retail guy. It’s almost as though he knows somebody’s watching to make sure he’s following orders. Never fails. Anyway, thanks for your time and interest.

Thank you for your time, Mr Sec—Sir, sorry—it’s been an honor. Well we’re supposed to be talking to NakedShorts now but I’ve just got an IM here:

NS: Stbg rd ht pkr i.
NS: Stbg rd ht pkr othr i.

Stabbing a red-hot poker in the eye? Stabbing a red hot poker in the other eye? I wonder what that’s all about?

Well, our time’s up anyway. As always, you can check out our detailed transcript below. Now we’re not sure where Global Megabank NA’s Consistent Inconsistencies will come from. But you know, MMM or not, those creative little scamps will come up with something that we’ll call Global Megabank NA’s Consistent Inconsistencies!  Now back to the studio…Ben, get down. Ah, Mr Sec—Sir. SIR! Henry…HANK!

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