Paulson, the First Subprime-Baller?

by Johnny Debacle

Paulson says “[the bailout bill] is much too important to simply let fail. We need to work as quickly as possible. We need to get something done.

He can’t get IT done, but he thinks we need to get SOMETHING done. That is decidedly NOT getting IT done.

Recommendation: If you are planning to build a CDO where the underlying assets are Hank Paulson Paper, good luck with that. And no, we have no interest in the equity tranche, the AAA tranche or any other part of the structure, thanks.

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  1. Richard Roma
    September 29th, 2008 | 6:36 pm

    Current scorecard:

    The condescending bald one- 0
    The public – 1

  2. Size
    September 29th, 2008 | 6:48 pm

    Thank God the sages at the SEC had those short restrictions in place or the market would have tanked today. Oh wait….

    I love it when the market throws a hissy fit when taxpayers oppose congress transferring wealth from them to shareholders. Thank God the SEC prevented anyone shorting to hedge their positions or somebody might have reduced the volatility in their portfolio before all this went down!

  3. P Brooks
    September 30th, 2008 | 12:18 am

    I’m long:




  4. Nate
    September 30th, 2008 | 1:49 pm

    Maybe the problem isn’t that Paulson hesistated in getting it done, but rather that he has the wrong impression of what should be done. He waits on someone else when its in regards to bailouts, but if you have a firm with lots of MBS teetering on bankruptcy, then he will not hesitate to get it done.

    It would be like someone during mini-baller roulette taking another mini-baller’s credit card and buying out the stock in a Wal Mart.

    The impulse is right, its just that the target choice could be better.

  5. J. Frederick
    September 30th, 2008 | 3:29 pm

    I just have to quote what was sent to my inbox earlier today to alert me of Hank’s status as a Sub-Prime Baller…

    “not sure if you noticed… but it has been written that Henry Paulsen (Chair of the Treasury board) Has been noticed as the first ever Sub-Prime Mini-Baller…. Or is he?

    Henry pushed for ZERO hesitation concerning the financial system bail out… I have a problem with this as he could not GET IT DONE. Which makes me think his mini-baller status should be revoked… although he is currently heading the largest game of mini-baller roulette ever established… 700 Billion dollars? Really? No hesitation to gamble to foot the bill on the No hesitation of banks to provide and poor people to receive mortgages on their homes. 700 mini baller dollars will be spent to cover the cost of having a multi-trillion dollar checking account with no savings and the juice flowing on our high interest credit accounts.

    America = Mini Baller… They used to = Actual Baller… Their status got demoted from No limit “black card”…. to “You guys wouldn’t happen to accept checks would you?” -JR Carr

    JR has a great point here which ultimately is concerning… Shouldn’t a baller be able to throw their bill for Goose on plastic???

    Right now America can only afford to drink Absolut, which is embarrassing in and of itself, and we must also write a check for the bill. We should not be extended any form of credit at all… We may just have to rely on the new rating system for America’s credit worthiness whereas our DD (Double D) rating would then come into play (Hank would recommend getting this done).

  6. Pleb
    September 30th, 2008 | 4:22 pm

    J. Fred – I am totally down with the Double D’s, as noted in our prior conversation.

    Since we appear to be running headlong into the wall, however, and because nobody in leadership appears to see this (they say they do, but sure don’t act like they see it) then for now, I’m advising you to be long on go blind.

    Meanwhile, our position on the other half of the dichotomy, vis a vis whither shit, is somewhat vexing. In violation of Warren “All The Distressed Assets You Can Eat” Buffet’s rules, I might be inclined to hold my shit in spite of not understanding this shit at all. Some people think we’re in a world of shit, in which case we should short shit, because it’s just a pile of worthless crap. On the other hand, the bailout may entail an investment approach from the government coupled with court ordered workouts of those underlying mortgages that can be reformed, so it’s possible that your shit is valuable to somebody, and everybody is going to want to get into your shit, particularly regulators.

    So perhaps you can understand my difficulty in choosing whether to shit or go blind. Perhaps Hammerin’ Hank, micro-baller extraordinaire, will give us some guidance. Y’know, if he can manage to get his shit together.

  7. Straight Cash Homie
    October 1st, 2008 | 3:16 pm

    Is The Hammer hiring at his newly formed hedge Fund: Treasury Trading LLC? I understand its specialty shop focusing on distressed debt and other highly speculative & illiquid securities. Hey high risk = high reward but with all the de-leveraging going on in the hedge space right now how on earth is he going to raise all the capital needed? This is especially significant since the average investor is barred from participation in hedge funds.

    LB – Lets it die, GS – starts to falter, better force the entire tax paying population to assume their investment risk! Which one did he used to work at prior to starting TT LLC?

  8. Brandon
    October 3rd, 2008 | 10:33 am

    Paulson is something else. Hes trying hard and had a decent plan but couldn’t sell it the way it needed to be sold. I think he failed miserably. I read that if this doesnt pass in the next few days we might see a bank freeze. That would be a mess and I dont even know if thats possible. I read that here