Great CEO of Goldman… But THE worst Treasury Secretary ever. Reason: saving Bear but let Lehman go, sent fatally mixed message to the market, drove away confidence, created such a mess that no amount of bailout will cure… The left hate him as he represents the haves, The right hate him for his lack of fiscal conservatism. The middle (if there is any) don’t care about him THE worst Treasury Secretary… .
I wouldn’t go that far…we can argue about the mixed signals he has send to the market. However, give the sh*t mess he inherited, Hank didn’t really have much choice; I don’t think other person can handle this much better.
Bear and Lehman were 2 very different cases. Bear completely blindsided the market, but by the time Lehman went bust, they (and the market) had ample time to prepare for this event. Moreover, Fuld completely dropped the ball…he had opportunities to raise capital/sell to a strategic buyer and did not act.
Not close. George Campbell (1814) : Couldn’t convince anybody to buy bonds to finance war of 1812. Paid usurious rates to extortionist bankers and bankrupted the country. Left office after 8 months in disgrace. William Duane (1833): Actually not that bad, but Jackson on dismissing him said: “He is either the weakest mortal, or the most strange composition I have ever met with.” Philip Thomas (1860-1861): A Southerner who couldn’t borrow any money (not a dime) because nobody wanted to give a Southern guy a loan when we were about to go to war. Edit: Actually, this is about “the worst Treasury Secretary ever” not failure of the century (which would certainly be GWB). Edit 2: Or maybe the 2008 Yankees…
He has had to make some tough decisions. I think he has done as good as anyone could have been. Would you rather have some GWB hack as the Trez right now?
Had Paulson let Bear fail, LEH and its “Dick” will learn the lesson and find a buyer much earlier. Or had Paulson saved LEH like he did in Bear, the market would have been much calmer. Granted Bear and Lehman f&$#ed themselves up. But it’s Paulson’s mixed message and different treatment that cause the market panic, guessing. He is a great CEO running a ibank. He just doesn’t have the caliber of Bob Rubin or Greenspan to run the fiscal or monetary policy…
I have heard this I dont know how many times now, but I really am not buying it, in fact I’d argue the opposite. "Reason: saving Bear but let Lehman go, sent fatally mixed message to the market, drove away confidence, created such a mess that no amount of bailout will cure… " Paulson drove away confidence? He created a mess? Bear came way before, and at that time was thought of as a bad apple which would impact the whole system. The stockholders lost their shirts, the only ppl who were saved were the employees (as many) and the bondholders (which I agree is not ideal, but ideal in these markets?) The reason they saved Bear was so that they could restore confidence and be like there there, its been taken care of, get on with your business… Now when it started happening left and right, then the issue for moral hazard really comes in (if you start saving everyone). FRE/FNM bondholders HAD to be protected, what did the stockholders get? He might be able to make the taxpayer money on that too, cuz he has the holding power! He did exactly the right thing with LEH, making sure the moral hazard side of the equation is being taken care of. The stockholders and bondholders going forward will demand more from their companies, expect better disclosure and not just expect a government put. It is a shame that LEH had to go, but now going forward firms will know, investors would know the downside is zero. I think it is good to create uncertainty in investors mind in terms of the government! Akin to a prof who only asks 2 big questions on a final exam, so you have to study everything…Its good that people are aware of the word RISK AIG. Wow what a deal! Paulson is bad? Paulson is a loan shark!! Warren Buffet last night I wanna know who made the deal, that person would be good at Berkshire… And now the ‘bailout’, again I might not know too much about these things. But Warren Buffet, Bill Gross and Larry Fink have all come out and said it will be a fantastic deal for the government IF the securities are bought at market. Warren Buffet said he’l personally buy 1% of what the government buys (and he does not swing unless he sees a really fat pitch) Paulson is an investment banker, a really top notch investment banker and the US taxpayer is his client. He is doing exactly what he should be doing. Is the process imperfect, hell yea! Think bout sleeping maybe 3-4 hours a night and have so many important decisions in such a short time. He is absolutely doing the best with the cards hes been dealt!
Paulson doesn’t have the vision and calcuation to run a country’s fiscal policy. Lawmakers support him in public, but, behind closed doors, they take shots and yell at him like he is a big dumbass. (Read WSJ’s story on Lehman on the 29th) Nobody doubts Paulson is a top notch i-banker. But his talents stops there…
are you saying that you take the lawmakers over Paulson? that my friend is the travesty with the US and A…there are ppl like warren buffett, bill gates, robert rubin, google founders and many many more who are like the smartest guys but they r not in politics, and then theres bubba!! also, you don’t do vision when you are fighting in the trenches! Joey, do you really think Paulson is doing a bad job? What could he have done different (even with the adv. of hindsite) ?
Wait - I said “not close”. To be honest - it’s too early to tell. I’m going to judge Paulson in hindsight in three years and then tell everyone this is what I thought when he was doing it. Edit: Also, Treasury Secretaries have often been outstanding men (no women yet). The competition and ranking of Treasury secs is tough competition.
Alphaseeker, you’re like the people who claims that Sara Palin has the right foreign diplomatic experience. Could you have done better than Paulson? Could you have run GS better? Could you have saved the market from crashing? If you are so knowledgable, perhaps you should run your own gig playing against Paulson and Co.
Well, he’s certainly no Alexander Hamilton.
In my view, the problems with Paulson are: a) He didn’t do anything about this before it happened. The guy has been Secretary for a couple of years and didn’t do much to fix the problem. b) His initial proposal to the House was autocratic as heck. c) He still hasn’t laid out the case for why Americans need to bailout WS. If I’m going to ante up $700B I would like to see the due diligence. d) He did a lousy job selling it to the House. e) He seems to easily revert to something he is good at - being an IB. This means that he is leading Treasury down the road of making money off distressed businesses. I hate that precedent because I don’t want the gov’t deciding that it’s a rough tax year so we are going to extort money from businesses by sending The Hammer after them (or whoever takes over later).
Ancientmtk, no need to get personal. I am just exercising my 1st amendment right to voice my opinion of elected officials… If you continue to be a jerk, I will pray for God to punish you when I go to church this Saturday.
equity_analyst Wrote: ------------------------------------------------------- > Well, he’s certainly no Alexander Hamilton. and I agree with that too. Although what would be really cool is if he tried to be Alexander Hamilton which meant he had to have a duel with the next Vice President. That might be a duel with Sarah Palin who actually might be good at it. Edit: For the rest of his life, Burr called Hamilton “my friend whom I shot”.
JoeyDVivre Wrote: ------------------------------------------------------- > In my view, the problems with Paulson are: > > a) He didn’t do anything about this before it > happened. The guy has been Secretary for a couple > of years and didn’t do much to fix the problem. > > b) His initial proposal to the House was > autocratic as heck. > > c) He still hasn’t laid out the case for why > Americans need to bailout WS. If I’m going to > ante up $700B I would like to see the due > diligence. > > d) He did a lousy job selling it to the House. > > e) He seems to easily revert to something he is > good at - being an IB. This means that he is > leading Treasury down the road of making money off > distressed businesses. I hate that precedent > because I don’t want the gov’t deciding that it’s > a rough tax year so we are going to extort money > from businesses by sending The Hammer after them > (or whoever takes over later). Good points, his salesmanship…uhhh, well, forget it, he doesn’t have any.
He’s pretty good at selling. He even used the future administration as part of his sales package to congress.
Of all the Goldman guys that had a stint in the government, Bob Rubin is the guy to beat… Specially considering that Rubin, a dem, had to work with Republica Greenspan. Now Paulson and Bernenke are from the same party and they couldn’t even get things done… Paulson has to go…