Paulson Warns Of "Fragile" Economy

Treasury Secretary Talks To Scott Pelley About The Controversial $700 Billion Bailout

(CBS)  Asked if he regrets that now, Paulson said, "No, I don't. It was, you know, sometimes I look up and say, you know, 'What's happening?' But in all my life I've been trained that when there's a big problem, you run toward it."

"Has he saved the country?" Pelley asked Roger Altman, who was number two at the Treasury in the Clinton administration and now runs an investment firm.

"We don't know yet," Altman replied.

"There's a very long list of financial institutions that are not sure whether they can get through this. Very long list," Altman said.

Asked if he's talking about more than a dozen such institutions, Altman said, "Oh, I would say so around the world sure, sure."

Altman says one of the biggest problems is uncertainty about how much bad debt Wall Street has hidden away.

"You know I have heard that some of these financial institutions were hiring mathematicians and physicists to write the mathematical formulas that underlied some of these investments, and pretty soon nobody understood what was going on any more," Pelley said.

"Well yes, a level of financial exotica ensued, which boggled the mind and which almost everyone involved didn't understand," Altman replied.

Federal agencies that regulate Wall Street didn't understand, and neither did the companies that rate the quality of investments.

"You're telling me that the credit rating agencies didn't understand these investments?" Pelley asked Altman.

"We had the first instance, at least in my memory, where AAA rated instruments, the highest rating, actually defaulted while rated AAA. Now there's something wrong with that," he replied.

While people wonder what's coming next, many are asking why experts like Paulson didn't see this coming.

"A year ago, last April, you said this, and I'll quote, 'I don't see subprime mortgage market troubles imposing a serious problem. I think it's going to be largely contained.' Why did this seem to take you by surprise?" Pelley asked Secretary Paulson.

"Well, again, hindsight's 20/20. When I came to government, I said, 'You know, we are about due for some kind of market turbulence.' I didn't expect quite this. But I said to the team, as we worked, 'You never know, when there's a lot of dry tinder out there, you never know what spark is gonna light the tinder,'" he replied.

"The regulators should have been suspicious that something very strange was going on," remarked Joseph Stiglitz, a Nobel Prize winning economist who warned of danger two years ago.

Asked if this was not unforeseeable, Stiglitz told Pelley, "Oh, not only was it foreseeable, it was foreseen. Now, economists aren't very good at predicting the precise date in which the whole thing is gonna unravel. But that it was unsustainable was perfectly clear."

[hieroweb]

So we should be okay with a government that comes out and tells us this bill needs to be passed right NOW without any checks and balances in place? Does anyone have any idea why a government would come out and make an unbelievable request? Why are they trying to shove this down the throat of every American? Could it be that Paulson wants to take care of his own base? Paulson who is an ex Chairman and Chief Executive Officer of Goldman Sachs with ties to AIG and other recently taken over companies is the man pulling the strings. It seems that the hurry to get this bill approved is more about not finding out certain details about Paulson%u2019s past than it is about helping our country. This administration has never been up front with the American people so why would they start now. Americans should be in an UPROAR over what is going on right now!

[sherri723]

You want stimulation of economy - GIVE THE MONEY TO
every US citizen adult, 21 and over (with some exclusions i.e., inmates) - and watch us roar! Give US the power to get ourselves back in shape and it will immediately affect every rural and metro. city in this country! How can the economy work when there''s little or no money in our hands to give into it? Give us an equal share, rich or poor and TRUST US to return it back into the system and relieve our pressures of debt and livelyhood! To be able to repay, to build and provide for ourselves, which in turn stimulates us all. It''s simple - and it''s the only answer to get the entire country moving again. Every bank, company, business and family would benefit from it and give us all a chance to recover.........not just Wall Street, investors, banks, etc. who got us into this mess!! Share it and watch it heal in no other way.

[wfl56]

I thought you guys had a repputation for asking the hard questions. During this past Sunday''s interview with Mr. Paulson, I saw no evidence of that. In my opinion there were a few hard questions that weren''t asked.

1. What do you see would be the outcome if the government did nothing and allowed the market correct itself?

2. What exactly would the government get for it''s $700b dollars?

3. Who would the government sell these risky loans too? If no one is buying them now, who would be our market?

[txgrouch2006]

Oops, sorry for dropping off the topic of my previous post.

I was discussing

TERM LIMITS FOR ALL MEMBERS OF CONGRESS

It''s time.

[txgrouch2006]

Would require an amendment that would have to get the support of 2/3 of each house first, or a special convention (never done before). Not likely. Also, you are condemning the good with the bad, and throwing out any institutional memory. They''''d ALL be Palins if we did this.
Posted by mbfaust at 01:06 AM : Sep 30, 2008

I suspect that there is SOME WAY to accomplish this without creating the obvious conflict of interest with Congress.

THERE ARE NO GOOD ONES. Any "institutional memory" IS BAD MEMORY.

How much good did the "good ones" and "institutional memory" do us to this point????

[corbon2]

http://www.youtube.com/watch?v=_MGT_cSi7Rs

DENIAL at it''s finest, no more Fannie Mae, off with their heads!!!

[corbon2]

http://www.youtube.com/watch?v=NU6fuFrdCJY

Corruption in government...No WAY!
This is informative

[mbfaust]

txgrouch2006:
Small problem. Term limits for members of Congress are unconstitutional. Would require an amendment that would have to get the support of 2/3 of each house first, or a special convention (never done before). Not likely. Also, you are condemning the good with the bad, and throwing out any institutional memory. They''d ALL be Palins if we did this.

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.
com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[joelewiz75]

Wolf, wolf... no wait I am serious this time. Peter''s trajedy may be our own.

[firelight2]

Here''s a video on how we got into the financial crisis..it''s pretty good!

http://www.youtube.com/watch?v=NU6fuFrdCJY