Sickening

As I observed Paulson, Bernanke and Cox at the Senate banking crisis hearing, I’m watching them fold. Four questions among many:

1) A Senator asked about valuing the underlying mortgages as a future-value based upon cash-flow, as all bonds are normally valued. Paulson’s answer: “Senator, it’s not that simple.” However, it is that simple.

2) Paulson says were going to bring in the best and the brightest people to re-price all of the mortgages that are sitting on the balance sheets of the banks. Ostensibly, the best and the brightest got us into this mess to begin with. Didn’t Wall Street, who created this problem, have the best and the brightest? Where is he going to get these new best and brightest people?

3) Chuck Schumer asked: “Could you accept $150 billion, as opposed to $700 billion, solve some of the problems, see if it works, then come back and ask for more.” Paulson’s answer: “Senator, you have to make your decision. It’s $700 billion, or it’s nothing.” Schumer: “You’re telling me that we can’t see if it works?” Paulson: “It’s $700 billion or nothing.”

4) Both Bernanke and Paulson, asked directly by the Senator from Pennsylvania: “Does Wall Street owe Main Street an apology?” Bernanke could not answer the question, nor could Paulson. They would not say yes.

For the first time in as long as I can remember, I’m proud of Senators who are finally asking tough questions. I’m continued to be amazed by the response of the executive branch, specifically Bernanke and Paulson. Pride on the one hand, and shame on the other hand.

My indignation is unbelievable. Any American who is watching this should be shocked and appalled.


Till next time,

Bill

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