And of course the cretins in the financial press were all over the quote, and it immediately became Paulson stating the GSEs were “well capitalized” when he said nothing of the sort.

For me that was a huge indication that this was going to unravel VERY soon (less than 2 accounting periods) with his “ADEQUATELY” capitalized, but again, a banana republic press is barely literate.

Matt Dubuque

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Paulson said in an interview today with CNBC television that he never made assurances of sufficient reserves at Fannie Mae.

“I never said the company was well capitalized,” Paulson said. “What I said is the regulator said they are adequately capitalized.”

“It was only after we had gone inside with the appropriate people and the appropriate teams that it was clear to me that the layer of capital was thin,” he said.

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Well, that’s just great Hank. You didn’t say it; you just concurred with the regulator who said it.

On the other hand, despite your vast financial knowledge and experience, you DIDN’T come out and say that the GSEs were UNDERCAPITALIZED, as some commentators have been pointing out for YEARS.

Apply Basel II capital adequacy standards to risky GSEs, and what do you get? I’m STILL waiting for an answer to that question.

I took that to mean that he wasn't going to leave F&F in their limbo before Jan 20 2009. My cynical nature expected the bailout to happen after the election.

So if anything Paulson was actually making sure the next POTUS has no surprise – now they can use the fact of the F&F bailout in their campaigns rather than using speculation about the bailout in the campaigns.

I say try them all for high treason:Bush, Cheney, Bernanke, Greenspan, Paulson, etc. Waterboarding, stress positions and sleep deprivation should get us to the heart of the matter.

Seriously, if I walked onto a military base and stole a base of canned peaches while shouting Allah Ahkbar, I would charged under the Patriot Acts. Yet, all these people stole or allowed others to steal hundreds of billions from the American people while humming the Battle Hymn of the Republic and they will get pensions, payouts, and free dental for the rest of their lives.

Death to Wall Street. Death to Washington. Metaphorically, of course, since it would otherwise be a crime and I would not want to rile up the DHS and SS more than I already have. Fascists!

Since we’ll be borrowing the money from Asia, it should be called, “tobashi”.

(If any reader is fluent in Chinese — please post the Chinese equivalent for completeness.)

they are almost exclusively used at home. Even when fearmonger about external enemies, they do this for internal control. The state and its private partners use ‘orwellian tactics’ to maximize control, for their own benefit.

Looks like they fooled the vast majority of the financial press, however.

In my book, when you change your accounting methods midstream so that no losses on mortgage payments are recognized for TWO YEARS instead of the previous practice of 90 days (according to yesterday’s NYT), that’s not excellent management, that’s an indictable offense, a FELONY to be more precise.

But what can we expect from the press of a banana republic? I guess that’s part of the package.

The ONLY rationale for such an accounting change is to mislead the investing public about the state of your books.

Matt Dubuque