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In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the "centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly."
Harry Reid says:
"One of the individuals in the caucus today talked about a major insurance company - a major insurance company - one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about."
Result... Hartford Financial Services (HIG | Quote | Chart | News | PowerRating) down 12.20 to 25.91... MetLife, Inc. MET down 7.19 to 40.96... Prudential Financial, Inc. (PRU | Quote | Chart | News | PowerRating) down 7.15 to 57.65.
Pete Dominici says:
"We're not talking recession but depression!"
GOP Rep. Zach Wamp of Tennessee says:
"If some of us don't change our vote, tomorrow's going to be a real ugly day in America, and I don't want to be a part of that."
John McCain says:
"If we fail to act, the gears of our economy will ground to a halt."
The Bush administration, Ben Bernanke and a bunch of politicians continue to talk everything down in order to get a bad bill passed. Why? Are they short the market? I ask why do they trust Hank Paulson's judgement so much? The same Hank Paulson that ran Goldman Sachs... ground zero for this leverage that caused all this. Anyone who has ever bet on horses knows you bet on past performance. So... what does Hank Paulson's past performance look like? Why does he get the benefit of the doubt and the keys to the kingdom? The following:
March 13th, 2007 - Henry Paulson: "the fallout in subprime mortgages is going to be painful to some lenders, but it is largely contained."
April 20th, 2007 - Paulson: "I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained." , "All the signs I look at" show "the housing market is at or near the bottom,"
July 12th, 2007 - Paulson: "This is far and away the strongest global economy I've seen in my business lifetime."
August 1st, 2007 - Paulson: "I see the underlying economy as being very healthy,"
February 14th, 2008 - Paulson: The economy "is fundamentally strong, diverse and resilient."
February 28th, 2008 - Paulson: "I'm seeing a series of ideas suggested involving major government intervention in the housing market, and these things are usually presented or sold as a way of helping homeowners stay in their homes. Then when you look at them more carefully what they really amount to is a bailout for financial institutions or Wall Street."
March 16th, 2008 - Paulson: "We've got strong financial institutions... Our markets are the envy of the world. They're resilient, they're... innovative, they're flexible. I think we move very quickly to address situations in this country, and, as I said, our financial institutions are strong."
May 7, 2008 - Paulson: 'The worst is likely to be behind us,"
May 16th, 2008 - Paulson: "In my judgment, we are closer to the end of the market turmoil than the beginning," he said.
July 20th, 2008 - Paulson: "it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation."
August 10th, 2008 - Paulson: "We have no plans to insert money into either of those two institutions." (Fannie Mae and Freddie Mac)
September 19th, 2008 - Paulson: "We're talking hundreds of billions of dollars - this needs to be big enough to make a real difference and get at the heart of the problem," he said. "This is the way we stabilize the system."
September 21st, 2008 - Paulson: "The credit markets are still very fragile right now and frozen", "We need to deal with this and deal with it quickly." "The financial security of all Americans... depends on our ability to restore our financial institutions to a sound footing."
September 23rd, 2008 - Paulson: "We must (enact a program quickly) in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families' financial well-being, the viability of businesses, both small and large, and the very health of our economy,"
I ask again... Why are we trusting this man's judgement? The markets get it. I wish the politicians did.
Disclaimer: The opinions expressed herein are those of the writer and may not reflect those of Wunderlich Securities, Inc. or any of its affiliates. The information herein has been obtained from sources believed to be reliable, but we can not assure its accuracy or completeness. Neither the information or any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.
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