UPDATE -
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Oh this one is good.
It's nothing new to us. We have been writing about Paulson's abuses of taxpayers and the Treasury since our first few days. But we love it when others join the party. Luckily, Matt Taibbi seems to have a well-nourished distaste for the Hammer.
First some background. Last week the WSJ's Evan Newmark wrote a dithering piece of refuse in which he hailed former Treasury Secretary Hank Paulson as a "National Hero." (Try not to vomit while you follow.)
Newmark's thesis is that since the VIX is lower (reflecting calm and peace) and since a few banks are lining up to repay TARP funds (but NOT rid themselves of FDIC debt), that everything is wonderful again and therefore Henry Paulson should be lauded as a hero.
We have seen this coming for a few weeks. The Hammer is on a reputation-restoration tour, eager to gloss over the ugly in favor of the untrue. While Newmark fails to mention that he is a former employee of Goldman Sachs and is therefore biased, the more striking omission is the non-mention of the hundreds of billions in FDIC-backed bank bonds still floating around with the full faith and credit of the U. S. Treasury. Ask Ford this morning, how it feels competing with GMAC's FDIC-backed debt. (Ford has to pay investors an 8.5% coupon while GMAC slides by with a 2.5% coupon of FDIC sugar.)
Originally it was proposed as a condition of TARP repayment that any institution must first demonstrate the ability to raise private debt without FDIC backing, but this suggestion seems to have been forgotten in all the orgasmic talk of banking green shoots. So today's announcement of TARP repayment from 10 banks rings rather hollow when this FDIC debt issue is considered.
Something else just slightly pertinent goes unmentioned in Newmark's public Paulson fellatio: the leading role Paulson played in creating this crisis as CEO of Goldman. Never forget that it was the Hammer who led the charge TWICE to have the SEC grant an exemption to those pesky leverage limits. As I have written on multiple occasions, this exemption is the single most important factor in understanding how this particular financial and banking crisis became so acute.
Taibbi skewers Newmark, calling him a craven, bumlicking ass-goblin.
Here are some of the gems:
- "...but you don’t need to disclose anything if all you’re doing is kissing your former boss’s ass."
- "Behavior like this, you usually don’t see it outside prison trusties who spend their evenings shining the guards’ boots. I can’t even think of a political press secretary who would sink that low. Hank Paulson, a hero? Are you fucking kidding us?"
- "But thanks to Hank Paulson, who heroically stepped in and gave AIG $80 billion the same weekend he allowed one of Goldman’s last key competitors, Lehman, to collapse, Goldman didn’t have to go without that money; $13 billion of the AIG bailout went straight to Goldman. So I guess we have Paulson to thank for the fact that he used about $13 billion of our taxpayer money to essentially bail out his own fuckups. I mean, that’s heroism if I’ve ever seen it. Audie Murphy has nothing on that. Sit your asses back down, Harriet Tubman, Thomas More, Gandhi and Jesus Christ. Hank Paulson is in the house!"
Maybe it was that. Or maybe it was the way Paulson got a $200 million tax deferral thanks to an obscure rule that allows executives who join the government to defer taxes on their holdings. That means that not only did Paulson use billions of our money to bail out his own mistakes, he managed to use a loophole to get out of paying his fair share of that same bailout."
Read Taibbi's entire piece HERE.
