For those who still want to hear from Henry Paulson, he now came up with a new reason why Fannie and Freddie had to be bailed out. Believe it or not, the Russians made him do it!
Jan. 29 (Bloomberg) -- Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.
Paulson learned of the “disruptive scheme” while attending the Beijing Summer Olympics, according to his memoir, “On The Brink.”
The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities. The Chinese declined, he said.
[...]
“The report was deeply troubling -- heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets,” Paulson wrote. “I waited till I was back home and in a secure environment to inform the president.”
Russia never approached China about dumping U.S. bonds, Peskov said today. “This is not the case,” he said by phone.
Russia sold all of its Fannie and Freddie debt in 2008, after holding $65.6 billion of the notes at the start of that year, according to central bank data. Fannie and Freddie were seized by regulators on Sept. 6, 2008, amid the worst U.S. housing slump since the Great Depression.
The Russians did the right thing: sell the junk assets at inflated prices back to the US government. But can we say that Paulson restored confidence in Freddie and Fannie? The masquarade has been going on for too long. It's time to arrest both him and Geithner, and all the persons having any responsibility in the diverting trillions of dollars of wealth from the people to the happy few.
No comments:
Post a Comment