Vote of no-confidence to Hank Paulson

Mkt tumbled 450 points after the Paulson’s $ 85 billion bailout for AIG. One the monetary side, the Fed has only 200 bps of rate cut in her tool box. Investors dished equities and rushed into bonds, which pushed the 3-month T-bills to par-pricing for a brief moment. Clearly, the markets are balking no-confidence against Paulson and Bernenke’s on their capital market policy.

I wonder if there is anything these guys could have done in the past few months that would have stopped this. There probably was no way of playing the AIG thing that would restore investor confidence. I hate this whole thing, but honestly I don’t have a better solution given the situation.

Paulson was too indecisive and sending mixed message from the get go, pre Bear Sterns days. He said no-government bailout in one hour and arranged big fed-loans in another. Mkt didn’t know what to believe and make of him, that creates uncertainties, uncertainties drives down value… There you go 800 points and 2 investments gone in just three days.

the only way to really tell if this was a good move would be to compare to what would have happened if he had let AIG file. that is impossible, but i think the red on my screen would be a lot worse if AIG was in Ch 11.

Bernanke is going to go down as the worst fed chair ever!

Do away with Fair Value Accounting (?) and the problem will be solved in an ordinary fashion.

You really think he’s worse than Roy Young?? IronMan Wrote: ------------------------------------------------------- > Bernanke is going to go down as the worst fed > chair ever!

IronMan Wrote: ------------------------------------------------------- > Bernanke is going to go down as the worst fed > chair ever! Many haven’t been the biggest supporters of some of his moves, but the guy has really been put between a rock and a hard place. I think we should state our solutions to the problems before passing judgement on others.

He is working hard, no doubt. But I dont think he is effectively communicating his message. Right from the China currency, strong dollar, Bear stock reversal from 2 to 10, Flip flop on Freddie and Fannie’s equity structure, let Lehman drowning but AIG swim… The list is long. He seems to be putting his finger in the air & making decisions.

I’m with Big Babbu on this one - the difficulty is that the solution to the problem is to do things differently 5 years ago. The losses are there and there is nobody to give them back (except OJ, Eliot Spitzer, and France) and it’s just a matter of figuring out who gets to bear the loss trying to balance equity (the “fairness” type) and loss minimization.