Paulson Just Did Complete 180 - 2nd 1/2 of Bailout $$ Won't Be Used to Buy Mortgages

Discussion in 'Wall St. News' started by ByLoSellHi, Nov 12, 2008.


    Who am I? Why am I here?

    Paulson Shifts Focus of Rescue to Consumer Lending (Update1)

    By John Brinsley and Robert Schmidt

    Nov. 12 (Bloomberg) --
    U.S. Secretary Henry Paulson plans to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets.

    ``Illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards,'' Paulson said today in a speech at the Treasury in Washington. ``This is creating a heavy burden on the American people and reducing the number of jobs in our economy.''

    Treasury and Federal Reserve officials are exploring a new ``facility'' to bolster the market for securities backed by assets, Paulson said. Officials are considering using a portion of the bailout money to ``encourage private investors to come back to this troubled market,'' he said.

    The Treasury chief said the department is also considering having companies that accept new taxpayer funding get matching private capital.

    Buying ``illiquid'' mortgage-related assets -- the reason the Troubled Asset Relief Program was established a month ago -- is no longer being considered, he said.

    ``Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether targeted forms of asset purchase can play a useful role,'' he said.

    Paulson has committed all but $60 billion of the initial $350 billion allocated by Congress to take equity stakes in banks and in insurer American International Group Inc. Lawmakers, who could reject Treasury requests for the remaining $350 billion, are pushing for aid to automakers including General Motors Corp. Paulson is resisting.

    With less than three months left in the Bush administration, demands for assistance from foundering companies will likely escalate. The Treasury two days ago took a $40 billion stake in AIG. American Express Co. this week converted into a bank-holding company, making it eligible for funds.

    Democrat Barack Obama assumes the U.S. presidency on Jan. 20. Obama last week said his economic team will ``review the implementation'' of the rescue plan, suggesting he may have different priorities for its use.

    In his remarks today, Paulson said that the Bush administration ``has taken the necessary steps to prevent a broad systemic event.''

    Still, the secretary said that conditions remain ``fragile'' and that the stability of the financial system continues to be his highest priority.

    Paulson also said that the Treasury will continue to look for strategies to help homeowners avoid foreclosure.
  2. Gee, I wonder if the Freedom of Information Act lawsuit Bloomberg News LP filed against the Federal Reserve & Treasury Dep't (where they're seeking disclosure of the borrowers and types of assets being accepted in exchange for taxpayer money) has anything to do with Hank 'the Tanker' Paulson's 180 degree change in position?
  3. jprad


    Doubt it.

    The whole thing was a smokescreen so that his Wall Street buds got their exit packages topped off.

    I wouldn't doubt them all having tee time the morning of 1/21/09 on their newly finished golf course on some obscure south pacific island that they all purchased so they can hack away at their golf game while the rest of the world goes down the shitter.
  4. MattF


    your loans are so bad, even the government won't buy them....
  5. Looks like we are heading for the 500 SP level. INDU 7000 or lower.

    Paulson's reversal signals fear. Expecting a 1000 point to be shead with in the next week.

    Finally we may get the panic selling, capitulation, one Day Crash to put in a bottom....or send us into a depression.
  6. Well it's about time... I've been spouting 7000 for months now and I wish we would just get down there so we could then look up and try for a new bull market.
  7. poyayan


    As someone said before, US always does the right thing after she tries everything else.

    This is just following European's lead on how to save banks. It was ridiculous to try to do price fixing on mortgage.
  8. This administration is like watching monkeys trying to fuck a football. These dopes aren't qualified to run a hot dog stand.
  9. W4rl0ck


    So what's the plan?

    Buy up credit cards loans?

    These f*ckers need to let something go BK.
  10. When I stopped laughing I realized the same can be said of Hussein's gang.
    #10     Nov 12, 2008