http://business.theatlantic.com/2009/05/newsweek_paulson_didnt_understood_mortgage_backed_securities.php
This quote, from Newsweek's piece on former Treasury Secretary Hank Paulson, strikes me as a bombshell:
Paulson--by his own admission--was not paying much attention to the way banks were slicing and dicing mortgages and selling them as complex securities. "I didn't understand the retail market; I just wasn't close to it," he told NEWSWEEK.
If Newsweek won't play prosecutor, I will: "Hank Paulson, you were Goldman's chief executive as mortgage securities boomed in 2004-5. Your earned an incredible severance, partly because of it. And you say you didn't understand mortgage securities? How is that remotely possible?"
I'd like to offer a bit of analysis, but all I've got is bewilderment. The reason I find the revolving door between Wall St. and Washington somewhat acceptable is that I think it's important that those who govern Wall Street understand it. But Paulson, by his own admission, didn't really. Think about this: A guy whose $46 million compensation package was made possible by leaving during Goldman's mortgage-security boom "was not paying much attention" to the mortgage-security boom! I don't know if Paulson is fibbing, or if mortgage-securities were such a specialized and esoteric money machine that basically nobody understood what was going on, but either way, this seems devastating.
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I was going to add more here about the BofA deal Paulson brokered but I shall leave that for another time.
The fact remains that these guys all act like the masters of the universe and we are repeatedly told that they deal in financial instruments so complex that the average person can't understand them even if an explanation is attempted. And then you hear how even Paulson - the former CEO of Goldman and Secretary of the Treasury - doesn't understand them either.
So we must ignore the seemingly senseless things that the knowledgeable people at the top are doing on our dime - and worth trillions of dollars too - because they know what they are doing.
Except when they don't.
I know what they are doing: stealing from everyone else. And it's all perfectly legal when you have the power of the federal government behind you.
Seriously, what does the idea of "legal" even mean at this stage? That some bureaucrats co-signed your being robbed?
Big whoop!
P.S. Isn't it just amazing how well Goldman is doing this quarter? It's all an accident, right?
