Knowledge is Power Not ‘Magic’ Hank!
Been thinking quite a bit about Secretary Paulson’s repeated assertion to me yesterday in his morning news conference, that I was ‘naive’ to believe, doing what TARP was intended to do, things would ‘magically’ change! What also struck me, was he seemed to say non-agency MBS’s (like non-prime securities) were not called MBS’s but actually ABS’s as he described, they’re gonna buy up ABS’s of credit cards, auto loans, business loans, student loans (and sorta under his breath ‘non-prime securitizations’ as well).
Later in the day Fox Business News reported: "Without fanfare, the Treasury Department posted to its Web site Tuesday details of a new program to rescue struggling financial institutions – the “Systemically Significant Failing Institutions Program” — then disclosed it also has created a third, unnamed program to provide them with government cash." Yet another indication to me, they’re confused and making this stuff up as they go along, Ready, Fire, Aim!
But the REAL funny thing was when they pledged to buy up hundreds of billions of ‘agency’ MBS’s and MAGICALLY (that’s right HANK) MAGICALLY residential mortgage interest rates U.S. mortgage rates dropped by the most in at least seven years … ya see Hank fixing this mortgage stuff isn’t mysterous or magical, just foreign to you Mr. Secretary ’cause YOU don’t understand how this mortgage thingy works!! (and frankly as the former CEO of Goldman that does surprise me somewhat).
PLEASE buy up a bunch of what you call ABS’s of non-prime residential mortgage paper, so our industry can turn around on a dime, just like Fannie & Freddie did YESTERDAY in a matter of HOURS!!!
