Who is Henry Paulson?
By Tom Eley | WSWS.org | 23 September 2008

Since taking office, Paulson has overseen the destruction of three of Goldman Sachs’ rivals. In March, Paulson helped arrange the fire sale of Bear Stearns to JPMorgan Chase. Then, a little more than a week ago, he allowed Lehman Brothers to collapse, while simultaneously organizing the absorption of Merrill Lynch by Bank of America. This left only Goldman Sachs and Morgan Stanley as major investment banks, both of which were converted on Sunday into bank holding companies, a move that effectively ended the existence of the investment bank as a distinct economic form.

Americans Nervously Watch Financial Rescue | US News.com

Continued coverage of the financial crisis touches on many subjects, from the nervous feelings among Americans consumers to Treasury Secretary Henry Paulson's preparations to enact the bailout approved last week. Key stock markets in Europe and Asia are down between three and six percent in trading conducted while Americans were still asleep.

Meet Neel Kashkari: The Man With the $700 Billion Wallet
Posted by Heidi N. Moore | DealJournal.com

A Goldman Sachs Group alumnus in charge of the nation’s economic rescue? How unusual.

Except, of course, it isn’t. As The Wall Street Journal’s Deborah Solomon reported today, Treasury Secretary Hank Paulson is promoting Neel Kashkari, the Treasury’s assistant secretary for international affairs, to be the point man overseeing the $700 billion financial bailout as the interim head of Paulson’s Office of Financial Stability. The full appointment would need Senate confirmation, which is unlikely to come given the short remaining tenure in this Administration.

Who will spend our $700 billion? Meet 35-year-old Neel Kashkari
by Michael Rainey | BloggingStocks.com

His name is not exactly familiar and his official title is a bit much -- Interim Assistant Secretary of the Treasury for Financial Stability and Assistant Secretary of the Treasury for International Economics and Development -- but 35-year-old Neel Kashkari is now one of the most powerful people in the global economy. As the head of the new Office of Financial Stability, it's his job to start spending the $700 billion Congress approved to stabilize the financial system.

Fannie, Freddie to buy a lot more mortgages - report
Finance giants reportedly ordered to buy $40 bln of mortgage bonds a month | By MarketWatch

Federal regulators have ordered Fannie Mae and Freddie Mac to start buying $40 billion of troubled mortgage bonds each month as the U.S. government tries to revive the economy, according to a published report.

A story from Bloomberg News on Saturday reported Fannie Mae (FNM) and and Freddie Mac (FRE) began telling bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, Bloomberg said, citing three unidentified people familiar with the situation.

Treasury Moves Quickly to Recruit Private Bailout Managers
By Robert O'Harrow Jr. | WashingtonPost.com
Wednesday, October 8, 2008; Page A10

D. Kent Goodger, a contracting official for four decades who now teaches procurement classes for the federal government, said decisions to bypass federal acquisition regulations for urgent and compelling reasons in the past has led to trouble and cost overruns.

The Treasury Department this week plans to start outsourcing the management of up to $700 billion in troubled securities, using special contracting authorities that enable it to retain private portfolio managers, custodians and other financial services consultants without following standard acquisition procedures.

A.I.G. to Get Additional $37.8 Billion
By BARRY MEIER and MARY WILLIAMS WALSH
Published: October 8, 2008

The Federal Reserve Board said Wednesday that it would provide up to $37.8 billion to the embattled insurer the American International Group to help it deal with a rapidly dwindling supply of cash.

The additional assistance is on top of $85 billion in a bridge loan that the Federal Reserve extended to A.I.G. in September, but it will take a different form. A spokesman for A.I.G., Nicholas Ashooh, said the new assistance was intended to keep the company from having to draw down the Fed loan so quickly.

Eliot's Mess
The $200 billion bail-out for predator banks and Spitzer charges are intimately linked
By Greg Palast

"...the unthinkable happened. Carlyle Capital went bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.

While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers’ bordello: Eliot Spitzer.

Who are they kidding? Spitzer’s lynching and the bankers’ enriching are intimately tied.

How to Save the U.S. Economy
by Richard C. Cook

The crashing stock market has given its verdict. The financial rescue plan currently being implemented by the U.S. Treasury Department and the Federal Reserve System will fail to revitalize the producing economy, even with continued interest rate cuts. This is because the banking system is essentially a supply-side, trickle-down mechanism with a currency based on a pyramid of bank lending and debt. All the current plans being suggested by economists and others to save the financial system by varying degrees of tinkering are useless. Similarly useless is the pumping in of credit or liquidity by Treasury or the Federal Reserve because it is no more than new debt to roll over old debt.

The cause of the financial failure is that the producing and consumer economy is “maxed out” and is unable to repay existing loans much less new ones. This is because purchasing power in the U.S. has collapsed.

Subprime Devastation Retraces Path of S&L Crisis in U.S. States
By Jonathan Keehner and Bob Ivry | Bloomberg.com

Oct. 8 (Bloomberg) -- The $700 billion bailout of Wall
Street's subprime-tainted securities harkens back to the real-
estate bets that sparked the savings and loan crisis in the
1980s. The geography's the same, too.

Financial industry bailout plan needs to protect taxpayers | Economic Policy Institute

The turmoil in financial markets is clearly deep and threatening. The economy, especially the job market, is already facing recessionary conditions, and a further meltdown in credit markets could absolutely deepen this crisis. Piecemeal attempts to repair the damage created by years of inadequate oversight, over-leveraging, and reckless lending and borrowing standards have not worked.

EPI debates Cato Institute on Google's Knol

The Economic Policy Institute today began a two-week online debate with the Cato Institute about the $700 billion financial bailout package signed into law by President Bush. This is the first in a series of pre-election debates sponsored by Google using Knol, its new interactive tool that allows readers to suggest edits and leave comments on signed articles. EPI's piece, written by Policy and Research Director John Irons and External Affairs Director Nancy Cleeland, argues that the federal action was imperfect but necessary, and that vigilance is now needed to ensure that taxpayers are protected as much as possible.