Paulson heads bailout: What is wrong with this financial picture?
[Update: with minor edits towards clarity - luaptifer]
This is incredible.
The Day the S.E.C. Changed the Game steps backward to the date, April 28, 2004, on which SEC gave the OK for the five banks that have precipitated the current spiral of the global financial crisis to begin their own financial risk monitoring programs rather than continuing to use the objective models then restraining all other banks from 'overdoing it'.
The multimedia presentation at the above link traces the story back to when Goldman Sachs was headed up by the very same Henry Paulson who is now presiding over the Treasury to decide how the multi-billion dollar bailout will be used. Paulson made the decision that his bank should be able to proceed upon its own risk analysis and got the SEC to agree.
"We [SEC] said these are the big guys...but that means if anything goes wrong, this is going to be an awfully big mess and do we feel secure that if there are these drops in capital and other things we really have investor protection?"
How crazy am I to think this: that it is absurd for the man who was top decisionmaker at Goldman Sachs when his bank urgently felt the need to be exempt from the very constraints which, upon their removal, have crashed the finance system of the world, to be in charge?
Should Henry Paulson now be the decisionmaker to get us out of what he urgently appealed to the SEC to get us into!?
Please tell me what is very wrong with this picture? Just how nuts am I, anyhow?
Review the piece linked below and let me know, will you?
Really, am I missing something?