G’Day Mate!

It is unfortunate that we must read articles written outside the U.S. to get a more realistic view of what is happening in our own financial markets.  National Australia Bank is writing off 90% of it American "conduit" loans.  It clearly understands the need to cleanse its liabilities.  In the corporate environment it is always best to write off bad investments when bad news is public.  You are protected by the "herd mentality" and you don’t look incompetent when compared to your peers.  The following article provides the details:



In another article, Joseph Stiglitz writes about the bailout of Fannie Mae and Freddie Mac.  Joseph Stiglitz is the 2001 recipient of the Nobel Prize for economics, is university professor at Columbia University. He is co-author with Linda Bilmes of The Three Trillion ­Dollar War: the True Cost of the Iraq Conflict.  He provides us with a well written view of the impact of this bailout and discusses the "unequal weights and measure" aspect of all the players:



Treasury Secretary Hank Paulson has led the bailout effort.  With his ties to the investment banking industry, one must ask if there is a potential conflict of interest.  His net worth has the potential of severe losses as well.  Is he the best person to oversee this catastrophe?  I don’t know, Only Our Heavenly Father knows his heart.

U.S. Treasury Secretary Henry Paulson, Jr. Resume:

Career highlights from Wikipedia:

Paulson was Staff Assistant to the Assistant Secretary of Defense at The Pentagon from 1970 to 1972.[7] He then worked for the administration of U.S. President Richard Nixon, serving as assistant to John Ehrlichman from 1972 to 1973.

He joined Goldman Sachs in 1974, working in the firm’s Chicago office. He became a partner in 1982. From 1983 until 1988, Paulson led the Investment Banking group for the Midwest Region, and became managing partner of the Chicago office in 1988. From 1990 to November 1994, he was co-head of Investment Banking, then, Chief Operating Officer from December 1994 to June 1998;[8] eventually succeeding Jon Corzine (now Governor of New Jersey) as its chief executive. His compensation package, according to reports, was US$37 million in 2005, and US$16.4 million projected for 2006.[9] His net worth has been estimated at over $700 million.[9]

Paulson has personally built close relations with China during his career. In July 2008 it was reported by The Daily Telegraph that: "Treasury Secretary Hank Paulson has intimate relations with the Chinese elite, dating from his days at Goldman Sachs when he visited the country over 70 times."[10]

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