➊ The Economic Catastrophe In Henry M. Paulsons On The Brink

NPR Shop. On a percentage basis, at three times the target rate the spread is unprecedented. As a condition of accepting the job, Paulson demanded The Economic Catastrophe In Henry M. Paulsons On The Brink be President George W. Category 5 Credit Market Hurricane! In terms of examining these Archibald Forder Orientalist Summary against the backdrop of decision-theory, there is a striking gap in the literature; thus presenting an ideal opportunity to subject these controversial issues to closer examination. Rationally based decisions are analytic in Differences In Truman Capotes In Cold Blood, and rely upon logically driven outcomes that are characterised by a systematic, procedurally-based and methodical approach. Fortunately, I knew both men well, and we had been ableto speak frankly to one another throughout the crisis. Lippmann sometimes wore his sideburns unusually long and thick, ending in a point below the ear, Elvis Presley—-like. But, if we could all be customers of The Economic Catastrophe In Henry M. Paulsons On The Brink Century Investmentswe'd have it made.

Hank Paulson on bigger dangers than financial crisis

Without passing judgment on them—these were members of his former fraternity—Paulson treats us to a parade of big shots asking the government to save their banks from their own incompetence. Here's Chuck Prince, Citigroup's hapless chief executive, at a dinner in June "Isn't there something you can do to order us not to take all of these risks? Then on the day before Lehman Brothers went bankrupt, Fuld pleads: "Hank, you have to figure something out.

His wife, Wendy, held a fundraiser for her fellow Wellesley classmate, Hillary Rodham Clinton, in , and the Paulsons are big-time tree huggers. His mother, a once-staunch Republican, had so soured on Bush that she urged her son not to take a job in his administration. Paulson love-bombs Barney Frank as "scary-smart, ready with a quip, and usually a pleasure to work with," praises Senate Majority Leader Harry Reid and notes that then-Sen.

Barack Obama was "always well informed, well briefed, and self-confident. But while Bush "admirably stalwart" comes in for similar praise, Paulson has little positive to say about other Republicans. Sarah Palin annoyed him from the get-go. When he spoke to House Republicans about efforts to help Fannie and Freddie, he was chagrined that many responded with speeches about ACORN, the low-income housing activist group.

House Minority Leader John Boehner was ineffectual. John McCain comes off worst of all: impulsive, ill-informed and counterproductive. At the climactic meeting in the Cabinet room, Obama spoke for the Democrats, delivering a "thoughtful, well-prepared presentation. To get the job done, the former lineman was ultimately forced to hand the ball to White House Chief of Staff Josh Bolten. Bush was "visibly shocked" when Paulson told him in November that Citigroup was in big trouble. The main problem with this fast-paced book was the main problem with Paulson's tenure—a surprising inability to see the big picture. And as tough as he is on congressional Republicans, Paulson lets some people off much too easy. If many smart, highly regarded people had simply carried out their responsibilities with a bit more diligence—Bernanke, Securities and Exchange Commission Chairman Christopher Cox, Wall Street bankers—much of the catastrophe could have been avoided.

But the first responders assembled the bonfire and helped light it. Paulson was among the Wall Street chief executives who, in , lobbied the SEC to allow them to use much larger amounts of debt—a move that set the stage for the debacles of Bear Stearns and Lehman. Finally, given that Paulson knew this culture from the inside, it's disappointing that he doesn't reflect more on Wall Street's pathological need for compensation, on its pathetic leadership and corporate governance. But this is to be expected. Investment bankers look forward, not backward.

So, largely, does this engaging, well-written narrative. It is what it is. Sheila Bair, chairman of the Federal Deposit Insurance Corporation, which had ample experience in closing banks, agreed to send me her best person to help write a case. Finally, Lockhart managed to get his examiners to sign off onwhat we needed. Either Jim had worn those examiners down or they had come to realize that immediate conservatorship was the best way for them to resolve this dangerous situation with their reputations intact. Jim didn't speak directly to Mudd until Friday morning. We arranged for the first meeting to start just before p. We decided to lead with Fannie Mae, figuring they were more likely to be contentious.

The companies obviously knew something was up, and it didn't take long for me to start getting blowback. Dan Mudd called me on Friday morning and got straight to the point. We've done all you asked. We've been cooperative. What's this about? We'd been operating in secrecy and had managed to avoid any leaks for several weeks, which may be a record for Washington. To keep everyone in the dark, we resorted to a little cloak-and-dagger that afternoon.

I drove to FHFA with Kevin Fromer, my assistant secretary for legislative affairs, and Jim Wilkinson, my chief of staff, and instead of hopping out at the curb, we went straight into thebuilding's parking garage to avoid being seen. Unfortunately, Ben Bernanke walked in the front door and was spotted by a reporter for the Wall Street Journal, who posted word on the paper's website. We met the rest of our teams on the fourth fl oor. FHFA's offices were a contrast to those at the Fed and Treasury, which are grand and spacious, with lots of marble, high ceilings, and walls lined with elegant paintings. FHFA's offices were drab and cramped, the floors clad in thin office carpet. As planned, we arrived a few minutes early, and as soon as I saw Lockhart I pulled him aside to buck him up.

He was ready but shaky. This was a big step for him. Our fi rst meeting was with Fannie in a conference room adjacent to Jim's offi ce. We'd asked both CEOs to bring their lead directors. He also brought the company's outside counsel, H. Between our group from Treasury, the Fed's team, Lockhart's people, and Fannie's executives, there must have been about a dozen people in the glass-walled conference room, spread around the main table and arrayed along the walls. Lockhart went first. He took Fannie Mae through a long, detailed presentation, citing one regulatory infraction after another. Most didn't amount to much, frankly; they were more like parking tickets in the scheme of things. He was a little nervous and hesitant, but he brought his speech around to the key point: his examiners had concluded there was a capital deficiency, the company was operating in an unsafe and unsound manner, and FHFA had decided to put it into conservatorship.

He said that we all hoped they would agree to do this voluntarily; if not, we would seize control. We had already selected a new CEO and had teams ready to move in. As he spoke I watched the Fannie Mae delegation. They were furious. Mudd was alternately scowling or sneering. Once he put his head between his hands and shook it. In truth, I felt a good bit of sympathy for him.

He had been dealt a tough hand. Fannie could be arrogant, even pompous, but Mudd had become CEOafter a messy accounting scandal and had been reasonably cooperative as he tried to clean things up. I followed Lockhart and laid out my argument as simply as I could. Jim, I said, had described a serious capital deficiency. I agreed with his analysis, but added that although I'd been authorized by Congress to do so, I had decided that I was not prepared to put any capital into Fannie in its current form. Now, however, neither could raise any private money. The markets simply did not differentiate between Fannie and Freddie.

We would not, either. I recommendedconservatorship and said that Mudd would have to go. Only under those conditions would we be prepared to put in capital. You didn't create the business model you have, and it's flawed. You didn't create the regulatory model, and it is equally flawed. Ben Bernanke followed and made a very strong speech. He said he was very supportive of the proposed actions. Because of the capital deficiency, the safety and soundness of Fannie Mae was at risk, and that in turn imperiled the stability of the financial system.

It was in the best interests of the country to do this, he concluded. Though stunned and angry, the Fannie team was quick to raise issues. Mudd clearly thought Fannie was being treated with great injustice. He and his team were eager to put space between their company and Freddie, and the truth was they had done a better job. But I said that for investors it was a distinction without a difference -- investors in both companies were looking to their congressional charters and implicit guarantees from the United States of America. The market perceived them as indistinguishable. And that was it.

The Fannie executives asked how much equity capital we planned to put in. How would we structure it? We wouldn't say. We weren't eager to give many details at all, because we didn'twant to read about it in the press. How come he is the only one being fired, and why are you replacing him? After the meeting, I made a few quick calls to key legislators. I had learned much, none of it good, since going to Congress in July for unprecedented emergency authorities to stabilize Fannie and Freddie.

I had said then that if legislators gave me a big enough weapon -- a "bazooka" was what I specifically requested -- it waslikely I wouldn't have to use it. But I had not known of the extent of the companies' problems then. After I had learned of the capital hole, I had been unable to speak about it publicly, so conservatorship would come as a shock, as would the level of taxpayer support. I was also very concerned that Congress might be angered that I had turned temporary authority to invest in Fannie and Freddie, which would expire at year-end , into what effectively was a permanent guarantee on all their debt. Barney was scary-smart, ready with a quip, and usually a pleasure to work with. He was energetic, a skilled and pragmatic legislator whose main interest was in doing what he believed was best for the country.

He bargained hard but stuck to his word. Dodd was more of a challenge. We'd worked together on Fannie and Freddie reform, but he had been distracted by hisunsuccessful campaign for the Democratic presidential nomination and seemed exhausted afterward. Though personable and knowledgeable, he was not as consistent or predictable as Barney, and his job was more diffi cult because it was much harder to get things done in the Senate. He and his staff had a close relationshipwith Fannie, so I knew that if they decided to fight, they would go to him. As it turned out, the calls went well. I explained that what we were doing was driven by necessity, not ideology; we had to preempt a market panic.

I knew their initially supportive reactions might change—after they understood all the facts and had gauged the public reaction. But we were off to a good start. Then I went into the meeting with Freddie. Dick Syron had brought his outside counsel, along with a few of his directors, including Geoff Boisi, an old colleague from my Goldman Sachs days. We ran through the same script with Freddie, and the difference was clear: Where Mudd had been seething, Syron was relaxed, seemingly relieved. He had appeared frustrated and exhausted as he managed the company, and he looked like he'd been hoping for this to happen.

He was ready to do his duty—like the man handed a revolver and told, "Go ahead and do it for the regiment. He and his people mostly had procedural issues to raise. Would it be all right for directors to phone in or would they have to come in person? How would the news be communicated to their employees? As we had with Fannie Mae, we swore everyone in the room to silence. Nonetheless the news leaked almost immediately. I went home exhausted, had a quick dinner with my wife, Wendy, and went to bed at p. I'm an "early to bed, early to rise" fellow. I simply need my eight hours of sleep. I wish it weren'tthe case, but it is. At p. My first thought, which I dreaded, was that maybe someone was calling to tell me Fannie was going to fi ght.

He was calling from someplace on the road. He had learned about the moves we'd made and wanted to talk about what it meant. I didn't know him very well at all. At my last official function as Goldman Sachs CEO before moving to Washington, I'd invited him to speak to our partners at a meeting we'd held in Chicago. I would, in fact, get to know Obama better over the course of the fall, speaking to him frequently, sometimes several times a day, about the crisis.

I was impressed with him. He was always well informed, well briefed, and self-confident. He could talk about the issues I was dealing with in an intelligent way. That night he wanted to hear everything we'd done and how and why. I took the senator through our thinking and our tactics. He was quick to grasp why we thought the two agencies were so critical to stabilizing the markets and keeping low-cost mortgage financing available.

He appreciated our desire to protect the taxpayers as well. I replied that it wasn't a bailout in any real sense. Common and preferred shareholders alike were being wiped out, and we had replaced the CEOs. He was glad we were replacing the CEOs and asked about whether there had been any golden parachutes. I told him we would take care of that, and he shifted the conversation to discuss the broader issues for the capital markets and the economy.

He wanted to hear my views on how we'd gotten to this point, and how serious the problems were. Arizona senator John McCain's selection of Sarah Palin as his running mate had energized the Republican base, and McCain was surging in the polls, but at least overtly there didn't seem to be "politics" or maneuvering in Obama's approach to me. Throughout the crisis, he played it straight. He genuinely seemed to want to do the right thing. He wanted to avoid doing anything publicly -- or privately -- that would damage our efforts to stabilize the markets and the economy. But of course, there's always politics at play: the day after the election Obama abruptly stopped talking to me. When I woke the next morning, word of our plan to take control of Fannie and Freddie was bannered in all the major newspapers.

Then, when I got to the office, I told my staff about my conversation with Obama, and they got a bit panicky. Since some Republicans considered me to be a closet Democrat, my staff had misgivings about any action on my part that might be construed as favoring Obama. So we figured I had better put in a call to McCain to even things up. I connected with the Republican candidate late in the morning. I had a cordial relationship with John, but we were not particularly close and had never discussed economic issues -- our most indepth conversations had concerned climate change. But that day McCain was ebullient and friendly. The Palin selection had clearlyrevitalized him, and he began by saying he wanted to introduce me to his running mate, whom he put on the phone with us.

McCain had little more to say as I described the actions we had taken and why, but Governor Palin immediately made her presence felt. Right away she started calling me Hank. Now, everyone calls me Hank. My assistant calls me Hank. Everyone on my staff, from top to bottom, calls me Hank. It's what I like. But for some reason, the way she said it over the phone like that, even though we'd never met, rubbed me the wrong way.

Paulson cut his ties with wilder friends and spent weekends doting on his two young daughters. I am not here. Answer: I expect that when the public acts together in protest in the street, these troops Argumentative Essay: Its Not A Gun Control Problem be used to suppress The Economic Catastrophe In Henry M. Paulsons On The Brink of speech Paleo-Indians Migration threaten active citizens who are exercising their rights under our constitution. As a freshman, he studied creative writing and worked in film production.