Mr. Paulson did not fully recognize the extent of Fannie’s and Freddie’s financial problems until recent months. In July, seeking to avoid a government takeover, he asked Congress for the power to bail out Fannie and Freddie — hoping that gaining such authority would calm markets and make a rescue unnecessary.So. Not having "fully recognized" the immense, spiraling clusterfuck that was (and is) the American mortgage hustle, Paulson asked for the authority to intervene in said clusterfuck, in order to prevent such clusterfuck, which he did not recognize from, um, occuring.
And then it turned out that they'd been on the holodeck all along!
2 comments:
When was the last time someone got power from Congress to do something and yet did not exercise such power?
And do we note the similarity here to the AUMF? What they do, indeed!
Nah, I think it's actually half-coherent. He hoped that threatening a takeover would convince speculators (who would lose their shirts in any nationalization) to double down and pump more money in. But it was a hail mary: they had already written off the investment and were selling shares at a loss. So he had to go ahead and nationalize because the people who really own the loan capital (who I assume include not just the foreign governments but also large corporations) were getting antsy.
Typical euphemisms: "calm markets" means 'threaten day traders and mutual fund companies,' and "did not recognize the extent..." means, well, that is pretty much bullshit, but it was the thin fiction that made the July announcement something other than overt intimidation of a group that is, after all, the Republican base .
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