Paulson Channels Soros and Dropkicks the TARP

Hank Paulson's bullying tactics have not exactly succeeded over the past few months, and the countdown is on until he leaves Washington for good.

"The Hammer" whipped out his bazooka, but does not know how to aim it. And he is finally throwing in the towel, adopting a plan similar to one George Soros proposed earlier this autumn.

Paulson Transcript
Since announcing the Capital Purchase Program, we have been examining a wide range of ideas that can further strengthen the financial system and get lending going again to support the broader economy. First and foremost, because the system remains fragile, we must continue to stand ready to prevent systemic failures. That is the basis for Monday’s action to purchase preferred shares in AIG. The stability of our system remains the highest priority.

Over these past weeks we have continued to examine the relative benefits of purchasing illiquid mortgage-related assets. Our assessment at this time is that this is not the most effective way to use TARP funds...

Tomorrow Capitol Hill will be renamed Capital Hill as the top-five hedge fund managers are grilled by grandstanding imbeciles. John Paulson, Ken Griffin and Phil Falcone are no doubt feverishly preparing, but it should be walk in the park for the Greek-speaking James Simons. Soros might get a free pass, too, given his party affiliations. But while his politics might be controversial, his crystal ball has been working just fine. And our options are dwindling.

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Financial Markets are all Greek to Congress, but your only option tomorrow is to watch the Hedgies
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His appearance on Fareed Zakaria’s show a month ago laid out a plan that we have subsequently adopted, at least to some extent, and while you might not agree with George, he did see the folly of Paulson’s ways.

Hank is now courting private capital after chasing it out of the markets with his misguided policies.

“We are carefully evaluating programs which would further leverage the impact of a TARP investment by attracting private capital, potentially through matching investments.”

While I don’t expect Congress to give George a medal tomorrow, maybe they can at least pick his brain. We have wasted precious time going down the wrong path, and policy makers should engage more than just the Goldman alumni network and the gang at PIMCO when searching for answers.

Paulson’s nefarious plot to kill hedge funds has also resulted in unintended consequences; who do you think has been puking your stocks, Main Street? Hedgistan and Main Street were always silent partners, even if one side did not always realize it.

Soros, Part 2 of Interview October 13th

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The New TARP:

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November 6th

WSJ’s Simon Constable and David Ranson of HC Wainwright

Why Paulson’s Plan Won’t Work

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Paulson backs off asset plan; crisis deals at risk
Reuters

US drops plan to buy toxic assets
FT

Full Paulson TARP Transcript
King Henry

Soros Interview With Fareed Zakaria
1440 Wall Street
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