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« Lehman = Pan Am | Main | Radio, Radio: NPR and Rush »

September 25, 2008


David Ulevitch

Amazing. And so glad you are able to explain what nobody else seems to be able to, no matter how hard they try.


Interesting. You take the polar opposite view to Gretchen Morgansen, who on NPR's Fresh Air program this week anticipates that we (the taxpayers) will end up paying more for this junk that FMV. After all, that would be in the best interests of the banks and its the banks that have the lobbying groups, not the taxpayers.

I hope your version plays out.


dude, you've been preaching the strong dollar and china demise for years now.

your models? are you fucking daft? you, warren buffet and the other rats are just talking your book.

positive carry? yeah if treasuries stay at 4%. what about at 10%? can't happen? just like home prices?

that 30c on the dollar paper? is going to be worth $0 even if they keep it to kingdom come.

unless they pump the inflation to 20% for years to make good. either way you're screwed.

oh, i forgot you got aapl. make sure you ask woz to make an ipod with a semiautomatic attached. might come in handy.

Robert Dobb

Good on 'ya, mate.

And yes, Hank Paulson came on the cheap. Forging at the least 200 million to take the job as T Secretary, as you point out, working 24/7.

You know you are right and on the right side of this issue when almost everyone else is spouting some sort of doomsday scenario, (wonder if some are talking THEIR book?) and people are calling representatives by the thousands... and you get comments like the above.

It's usually the other way around, as the public gets the cramdown. But Hank Paulson is a freaking genius. And you can hear the institutions who stuck THEMSELVES with this "distressed' paper, squirm about, calling for bailouts, while Hank full court presses this cramdown on the behalf of the citizens.

Good on Hank Paulson. ... he's SAE thru and thru.

The True Gentleman

The True Gentleman is the man whose conduct proceeds from good will and an acute sense of propriety, and whose self-control is equal to all emergencies; who does not make the poor man conscious of his poverty, the obscure man of his obscurity, or any man of his inferiority or deformity; who is himself humbled if necessity compels him to humble another; who does not flatter wealth, cringe before power, or boast of his own possessions or achievements; who speaks with frankness but always with sincerity and sympathy; whose deed follows his word; who thinks of the rights and feelings of others, rather than his own; and who appears well in any company, a man with whom honor is sacred and virtue safe.
—John Walter Wayland(Virginia Omicron Chapter 1899)


Where are the [sarcasm] [/sarcasm] tags?

This is an effort to clear the books of the primary dealers who have soiled the balance sheet of the Federal Reserve. The next leg of the real estate price decline is upon us and the primary dealers have to find a way to offload these securities before the insolvencies can no longer be disguised. I bet we burn through this pile of money and are asking for more before the end of Q1'09. I have profited on both sides of this market and will continue to do so, so I prefer not to be characterized in a binary bear/bull fashion. This is debt deflation my friends and Bernanke's thesis that a lack of liquidity caused the great depression is being proven wrong right in front of your eyes. This market cycles on the quarter, so keep an eye on your positions as we approach each quarter end.

The most laughable comment is from Bob Dobb though, "Hank Paulsen came on the cheap." The man got a tax waiver to dump all of his GS equity.


Andy there was a time when you supported independent research, you even called Jim Cramer and sell-outs. It's a tragedy that you've been softened by the money you earned while successfully running VelCap. Return to your roots man!

Bob Dobb

Most everyone that mattered knew about Paulson's selling of his GS shares. Too bad, didn't he even leave another $100 per in the timing of that sale, summer of 2006?

The problem now is, will a bill pass with out major changes. And that looks like a big zero.
This offered McCain insurance scheme is an even bigger fat zeroth.


Thanks for the most lucid description of how this could work out for the best. I'm not sure why Paulson (and Bush, and Barney Frank, for that matter!) isn't positioning his plan in at least partly this positive a light. It's strange to see them not working the bully pulpit to move public opinion, which is now so insanely one-sided against any deal (200-1? When is that ever the case??)

I hope that Henry begins to understand that HE's the one who has to go to the People and convince us that he is sure that this is the best idea that is out there. Nobody else is credible to sell it for him, since few in Congress (gov't) have even the vaguest notion of how economics works.

Wisdom Seeker

I liked Kessler's book about his adventures in the Dot-Com Bull, but this piece is all wrong.

50 cents on the dollar for subprime? He must be joking. Much less. And Alt-A and Pay-Option ARMs and the rest are not far behind. The macro risks - higher interest rates due to credit scarcity, and lower real estate prices due to higher mortgage costs and lower household incomes - are huge. Besides, there is plenty of intelligent capital, now sitting on the sidelines, that knows the banks' current pricing is still too high -- otherwise it'd be buying. Paulson and the others in Washington are only making things worse by changing the rules on a daily basis and preventing anyone from being able to make a comfortable investment decision.

Paulson's TRAP can only overpay for junk; it's not like the banks are going to hand over their best stuff at bargain prices!

Furthermore, Paulson's tax-free sale of the $0.5 Billion he got for spewing toxic bonds out of GS was a heck of a windfall for becoming Treasury Secretary. And his cronies have made enormous fortunes off of his department's malfeasance in eviscerating every regulation that would have stopped this mess. His $0.5B should be put in as the first of the $700B bailout... at least 10% of which could easily come from the "bank robber" CEOs - who robbed the shareholders of their banks and left us with this mess.

Bob Dobb

the majority party goes first, and on the record with their opinions in from of all the cameras. foot meet mouth.

the minority party gets to go second. counter offering a plan against the first offer that the far majority of citizens did not dig at all. (even though they did not full understand it).

the majority party thinking GW is a lame duck, did not realize they were being front run by the GW admin.


new highs coming.

in tonite's debate, the Obama uhhhh count will reach new highs.

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