The credit crisis and its evolution can be roughly tracked by the analogies Golden Boy uses for his power.
(Click for larger image)So in the course of 7 months Golden Boy and the Helicopter have gone from being able to provide backstop loans and treasury notes to brokerages in exchange for questionable paper assets, to assuming Fannie Mae and Freddie Mac's debt and placing them under conservatorship, and (if Congress approves) will now be able to reduce small planets to ash and buy 700 Billion of difficult to price paper.
Admirably, the proposal came in at 3 pages, rather than the normal 1000 pages of legal jargon. But in all fairness I can cut the whole thing down to 2 sentences without losing any meaning :
"We'll do whatever the fuck we feel like and you'll thank us. We'll start with 700 billion and see how that works out."
The questionable sections are :
"(2) entering into contracts... without regard to any other provision of law regarding public contracts;"
" Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency"
Now I understand that this is a monumental undertaking, and that Golden Boy doesn't want politicians scapegoating him for an already bad situation. However, he was head of Goldman from 1999-2006, when all the questionable activity was occurring. Just because Goldman is faring better than its industry doesn't convince me that they weren't heavily involved. Just that they were smart enough to pass it on to others and not hold it on their own books. I don't care what he says about having divested his stock. He's still got massive conflicts of interest.
For whatever its worth Buffett believes in Paulson, and thinks the plan can generate a profit if done properly.
I don't have his financial acumen, but I don't think this is necessary and don't think it can restore the credit markets.
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