wtf: Mitt Romney: George W. Bush And Henry Paulson Saved Country From Depression

[trefoil]

Quote from sfbayarea:

Your quotes are displayed here for all independents, moderates, and reasonable level headed people to see what a Murdoch Goon you are!! HAHA

When can you get off of wiping your face with Rupert Murdoch's adult diapers?

Was Maximum Stupidity reacting to my diatribe? Regardless, below we have some stuff I was able to resurrect.

Here's the link to Dizard, just a week before Paulson blew up the world economy:

A Measured View of GSE Preferreds

Here's the exact quote of Jim Grant's opinion, prior, remember, to the Fannie and Freddie weekend:

As a reality check I called Jim Grant, of Grant’s Interest Rate Observer, and the author of the forthcoming “Mr Market Miscalculates”. He comments: “The alternative to preserving the value of the GSE preferreds? Prayer? Remember that a lot of that paper is held by the same banks the authorities would love not to fail.”

....and here's the money quote from the press release announcing the bailout of Freddie and Fannie as delivered by Paulson himself:

Market discipline is best served when shareholders bear both the risk and the reward of their investment. While conservatorship does not eliminate the common stock, it does place common shareholders last in terms of claims on the assets of the enterprise.
Similarly, conservatorship does not eliminate the outstanding preferred stock, but does place preferred shareholders second, after the common shareholders, in absorbing losses. The federal banking agencies are assessing the exposures of banks and thrifts to Fannie Mae and Freddie Mac. The agencies believe that, while many institutions hold common or preferred shares of these two GSEs, only a limited number of smaller institutions have holdings that are significant compared to their capital.

I can't find any stories re the preferred sharemarket rout that Monday, but here's one about the consequences to the banks that held the Fannie and Freddie preferreds: Lenders With `Outsized' GSE Stakes May Need Capital (Update4)

It was a whole chain reaction, where the refusal to bail out the preferred shareholders of Fannie and Freddie shut down that market for any further recaps, and injured, in a few cases fatally, the capital position of a slew of banks that held the Fannie and Freddie preferreds. After that decision and as a direct result of it, the crisis took on a life of its own.

Dizard post this stupid decision sums it up:

Even though the administration had very broad discretion over how to structure the Fannie and Freddie deal, they were reluctant to do anything that could give anyone in Congress, and in particular anyone in the Democratic party, a sound bite or campaign issue.
Bailing out the preferred – and that is what it would have been – might have been one such bite before the election.
Whether or not it would have made it possible to shorten the credit crisis by months or years was, it seems, a secondary concern.
The problem with opportunism is that it often isn’t opportunistic. The Treasury team has now shown its weakness. They’ve fired their “bazooka”, and we’re still in trouble.

An ounce of prevention, as Ben Franklin noted a few hundred years ago, is worth a pound of cure.