"Yesterday's excesses" now haunting Paulson, who helped create themSomething about sending the fox to guard the hen-house??? As a Noted Troubador once noted: There's bandits who'll rob ya with a pistol, and there's them that'll rob ya with a fountain pen. (Epic synechdoche at its best.)
By Mark Pittman Bloomberg News
Published: November 6, 2007
NEW YORK: Treasury Secretary Henry Paulson says that the United States is examining the subprime mortgage crisis to ensure that "yesterday's excesses" are not repeated. He could be talking about himself and his former firm, Goldman Sachs.
Paulson does not mention that Goldman still has on the market an estimated $13 billion of almost $37 billion in bonds backed by subprime loans or second mortgages that it created while he was its chief executive. Those bonds have an average delinquency rate of almost 22 percent, higher than the average of other subprime bonds from the period, according to data compiled by Bloomberg.
Goldman, the most profitable investment bank, was one of 14 primary dealers of U.S. Treasury notes that contributed to a three-year binge as $1 trillion worth of subprime mortgages were packaged and sold to investors. The value of its remaining subprime bonds trails the $33 billion at Lehman Brothers, out of $106.8 billion created during the time Paulson was at Goldman, and $28.8 billion at Morgan Stanley, out of $82.5 billion....
"I can't help but notice that when middle-class homeowners were losing their homes to foreclosure, he was pretty nonchalant about it," Congressman Brad) Miller (D/NC) said of Paulson. "But when Wall Street CEOs start seeing trouble in their absurdly complicated financial instruments built on the mortgages of middle-class homeowners, he feels their pain."
Paulson declined to comment, said spokeswoman Michele Davis. Michael DuVally, a Goldman spokesman in New York, declined to say how much subprime mortgages contributed to profits at the investment bank, or to Paulson's compensation during his tenure from May 1999 through June 2006.
Goldman paid Paulson $38.5 million for 2005, and he received an $18.7 million bonus for the first half of last year.
5 weeks ago