Paulson's Saloon smackdown

Wow, Hank Paulson says I'm all wet.

Well, he didn't say so directly.  But after my post yesterday calling the credit market rescue scheme a "bailout," I read this today:

Treasury Secretary Henry Paulson, defending an effort he spearheaded to stabilize credit markets, has "no interest in bailing out lenders or property speculators," the New York Times reported on Tuesday…

Later on Tuesday Paulson will call for new regulations for mortgage lenders, changes in credit-rating agencies' practices and stepped-up oversight by financial regulators, the Times reported.

Paulson's comments will be included in a speech he is scheduled to deliver on Tuesday at Georgetown University in Washington. An advance text was obtained by the Times.

So there.  It's not a bailout… even though the whole point of the scheme is to stabilize credit markets and keep some of these risky CDOs, MBSs, and other varieties of BSs from going bust.  Contra Paulson's own words, that would indeed be "bailing out lenders or property speculators."

Oh, but I'm being judgmental here, and he says it's no time for that:

"We have an immediate need to see results," Paulson says in the text of the speech. "The current process is not working well. This is not about finger-pointing, it is about putting an aggressive plan together and moving forward."

That's what government types always say in a situation like this: No point in examining how we got here or who's responsible, we just have to fix it.  Put a plan together.  Move forward.

I'm sure whatever he and his Goldman Sachs buddies come up with will do a fine job of covering their respective rear ends… while everyone else will remain at risk of getting swamped in the housing tsunami.

By the way… Is it just coincidence, or is someone at the Financial Timesexercising a sense of humor by dubbing the bailout scheme a "super fund?"  That's the name of the federal program that cleans up toxic waste sites.

The Daily Reckoning