Parsing Paulsonspeak
The Hank and Ben Show went before Congress yesterday, ostensibly to talk about plans for the alleged modernized financial regulatory structure. But with former Federal Reserve Board governor Bill Poole having so recently thrown around the insolvency word, the evil twins Phony and Fraudy (© Barry Ritholtz) got their share of their attention:
Fannie Mae and Freddie Mac are also working through this challenging period...Their regulator has made clear that they are adequately capitalized.
Oral Statement by Secretary Henry M. Paulson Jr
House Committee on Financial Services
Jul. 10 2008
The regulator? That would be Orifice of Federal Housing Enterprise Oversight, or OFHEO, James B. Lockhart III, prop. Or, as Paulson has said repeatedly over recent months:
I think it is so important that we have a strong, credible, independent regulator for Fannie Mae and Freddie Mac. . .A strong regulator will really add to the confidence surrounding these organizations and the secondary mortgage market.
Paulson: oil demand/supply cause for price rise<
Reuters May 22 2008
Two things:
- None of the knuckle-dragging camera-mugging representatives addressed the question of why Paulson, or anybody else, should believe anything said by a regulator that makes the Commodity Futures Trading Commission look effective.
- Paulson was, however, careful to say that “Their regulator has made clear...,” and not “I believe that they are adequately capitalized.”
How much money is linked to Paulson's former GS commodity index? If I recall, that index is heavily weighted to the energy sector. So who is really the evil speculator, and who has been collecting all fees? Maybe yet another Congressional hearing on this matter should convened...
Posted by: KP | July 13, 2008 at 17:22