Paulson on bailout: "Absolutely not"

News item: In an interview today with CNBC, Treasury Secretary Paulson said a big bailout for banks is "absolutely not" needed.

From The Wall Street Journal: "Following the U.K.’s surprise move to nationalize mortgage lender Northern Rock, will the U.S. need to make similar moves?

"'Absolutely not,' U.S. Treasury Secretary Henry Paulson told CNBC, dismissing talk that the Bush administration needs to initiate a widespread bailout program to assist the financial industry and restore investor confidence."

Reuters: "Asked if a broader government bailout was necessary to restore confidence to U.S. credit and equity markets, Paulson replied, 'Absolutely not. We're seeing real progress.'"

Well, that settles that. To borrow from Dan Rather, you can pretty much take it to the bank, book it, it's true.

Your thoughts? Comments? Email story tips to peter.viles@latimes.com.
Photo Credit: AP

Comments

[Cal]

In the political realm..

I thought Obamas speech referencing the loan problem was much more conservative and balanced than Clintons pandering and dangerous overspending proposals.

Quote from his speech:
“Senator Clinton and I don’t totally agree on the best way to solve this problem,” Obama said. “She says we need to freeze the monthly rate on existing adjustable rate mortgages for at least five years. But here’s the problem. That will reward folks who made this problem worse and it will also reward folks who are wealthy and don’t need it – but it won’t just target the struggling homeowners who need help most. And on top of that, a blanket freeze like this will drive rates through the roof on people who are trying to get new mortgages to buy or refinance a home.”

His position paper:
http://tinyurl.com/2fcmrd

[Curious]

Is this the same guy who said, back in June or July, that the subprime crisis was "largely contained?"

[Anonymous]

The bottom line is our country's financiers have not put any significant capitial into our manufacturing base in decades. They've speculated, stuff their pockets, and stripped our economy bare.

Take a look at the Fortune Top 10, then reflect upon what our "M&A" geniuses have done to our economy.

[pr]

Sure there's a government bailout - it's going on right now. It's just that it's the governments of Dubai, Qatar, Saudi Arabia, China and Singapore who are doing the bailing. Thanks guys!

[CD]

Is it the same Paulson that told us last August that everything was fine with the banking industry? Again, who were the journalists in the room asking questions
Couldn't someone say: Hey, Pauly is your word good on this one, because so fare it has been one lie after another....Why are the journalists there, just to hang out, which papers are they representing? Vogue Magazine?
Citizen reporters are doing a better job than the so called "professional journalists" We all know there is no money left and that interest rate will go up to 10% and more . Bond market is crumbling, banks have to back to the confessional again. Pauly the Parrot.I am so pissed off....

[MyLessThanPrimeBeef]

I am shocked, shocked to hear Paulson's denial here.

You must remember this
A bubble is still a bubble, a default is still a default
The fundamental things apply
As time goes by...

[Michael Snyder]

Why does Paulson's statement sound like, "Read my lips..."? There is no mechanism in place to "nationalize" institutional resources that I'm aware of under the Constitution; not that the Constitution has ever been a consideration for this administration.
After Warren Buffet kicked the legs out from underneath the bond insurance market last week, MBIA & the other bond insurers are being forced to restructure their businesses and reconsider their practices. While all of the fallout from this won't be apparent for a few months, I'm sure his move will force the final collapse of the CDO / SIV Ponzi scheme that's buggered the market for packaged securities. You can be sure legislators are under tremendous pressure from their major contributers to find a way for the Fed to pull their stones from the fire. Faced with trillions of dollars in structurally flawed securities poised to loose 80%+ in value when they loose their AAA rating and fall to their proper junk bond status; the proverbial back rooms are presently filled with panicked theorist trying to figure out how they're going to save their precious stock prices while the rest of the economy collapses around them.
In a surprising yet parallel move AP reported a Supreme Court decision this morning that Allows the holders of 401(k) plans to sue plan administrators for breaching their fiduciary duties. The case is LaRue v. DeWolff, 06-856 and resulted from an individual's losses after he'd instructed his plan administrator to take a more conservative path with his funds. I can't wait for Larry Parker to get a hold of this one.

[Pat]

Absolutely not! Anything as public as nationalizing a mortgage company would get us kicked out of office faster than you can say "election". No, our bailouts will be done on the sly and go largely unreported.

[CD]

Re: Pat nationalizing mortgage company

Pat, that is exactly what is going to happen, also the banks which are insolvent will be nationalized, just as in England. Homes will be owned by the governments.
Read today's letter by the economist Nouriel Roubini and the follow up at the bottom of the page. This is a must. No one is talking about it yet but we are going there. We are bankrupt in the trillions.Those idiots did not think about the" walking away" and "jingle mail" events, the people are walking, refusing the debt.The government will have to take over, otherwise....There is no otherwise. As Patrick.net said back in August 07: Now I am scared guys.

[baruza]

The thing is, the Northern Rock bailout will probably prove a lot more favorable to tax payers there than the kind of solutions our government will endorse over here. There, they acknowledged that they were subsidizing the bank already, as we are here through interest rate cuts and the FATP program, and decided they might as well get all the immediate profits plus whatever windfall will be generated from taking it public again when the economic climate is more favorable. Here, we'll just pay and pay and pay to keep the banks going but never see a cent of it come back. The ideological cabal of “free market” capitalists who run this country would completely flip at the idea of government owning a business or taking “private” property yet the same people lobby Congress for direct, unconditional aid, the benefits of which, they say, will help them save the broader economy.

[Brad]

How's this for a conspiracy: new larger conforming loan limits allow people to refi their large mortgages, the 'bad' mortgages owned by banks and investors are paid off, and the new mortgages are backed by Uncle Sam. When people have trouble paying those new conforming mortgages who's in trouble? Not the banks, who would be off the hook, but you and I, John Q. Taxpayer.

[Laker]

Brad, that is not a conspiracy. That is exactly what they want to do, and are doing albeit very openly and no questions asked by our congress man or senators.
What's in your wallet Brad...please pay your tax bill....

[Zeke]

This man, Paulson, has been dead for more than a month. Take what he said and figure out why he is dead.

He was playing a game with trillions of dollars and started pissing a bunch of folks off. The US may not need to impeach, just let the Chinese, Russians and Israelis vent on the corrupt crew and the problem is solved.

[Gene J]

You might enjoy this Power Point on how sub prime really worked! It is right to the point!

Enjoy!

[butterflysoup]

3 a.m. at Countrywide and Wachovia, the trucks are backing up to the loading docks to deliver dollar bills as savvy savers make withdrawals with which to stuff their mattresses.