December 6: Commentary - Subprime Bailout II, Wells Fargo Writedown Raises the Bar
Location: New York
Author:
Date: Thursday, December 6, 2007
Consider the spectacle of Treasury Secretary Hank Paulson negotiating an agreement with the banking industry to keep millions of subprime adjustable rate home loans at the introductory rate. The banks will do this voluntarily, you understand. Just ask the Chinese government officials (aka "clients") who periodically meet with Paulson at the University Club in DC what it's like to negotiate with the former CEO of Goldman Sachs. If the banks agree to Paulson's gambit, bank shareholders and loan investors will take a bath, credit available for housing will disappear, and a least one in three subprime borrowers will eventually default anyway.
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