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Liveblogging (Sort Of) The Bailout Hearings

Paulson and The Beard are facing the panel. What glee!
11:30: Lots of hammering away on the issue of mortgage foreclosure assistance. If the issue was bad lending, the argument goes, why aren't we doing more for foreclosure assistance?
What other plans did the Treasury consider before adopting the plan that is before the congressmen and congresswomen now? (This should be good).
Paulson: Oh, the market, baby, the market is the answer. Except when it isn't. When you "have to buy mortgages or securities way above fair value" (emphasis mine).
Bernanke: "As you know I am a student of financial crisis and financial history." Indeed!
The situation we have now is unique and new. It's not about failing institutions. Our amazing financial innovation is so amazingly complex, we can't handle it like those simpletons, the Japanese.
Q. What banks would be eligible to participate?
All of them. (Ahem).

Q. How do you rationalize bailing out foreign banks to the taxpayer. I need your help here.
Paulson: The American Public doesn't care who owns the bank. (So long as they get the cheapest mortgage, I think the subtext is).
Senator Shelby: How do you justify banks that were the root cause of this problem, and permit them to profit?
Paulson is VERY angry at the idiots on Wall Street (ahem).
Senator Shelby: What's the worst case if it doesn't work? None of your other plans worked.
Paulson: FRE, AIG worked the way they were supposed to. We need to inject capital, establish price liquidity.
Senator Shelby: What about the homeowner?
Paulson: Let's face it, some of them are just shit out of luck.
Senator Johnson: His wife wrote his speech for him I think. What "punitive action" is being taken?
Paulson: *Bob* *Weave* (Ahem) Equity wipeout... *Duck* *Cover* Paulson is shocked, SHOCKED he tells you, to learn that regulatory systems are old in here. Damn state level regulators had no clue what they were doing. We need to federalize mortgage origination regulation.
The problem is the regulatory system which Congress, past administrations, future administrations(??) who let it happen. (Don't ask me, I don't think I heard that wrong).
Senator Johnson: Should the Federal Government regulate all insurance given AIG's failure?
Senator Johnson: Hey, Cox, how'd you figure out how to put on the Short Seller Ban list?
Cox: Well, we just set criteria. The exchanges determined which firms qualified.
Senator Johnson: Should the Federal Government regulate all insurance given AIG's failure?
Maybe. Maybe not.
Paulson: What's a firesale price? Probably what the firm's have them marked down to already. Now he's forced to explain a reverse auction to the panel. The point here is price discovery.
Senator Robert Bennett: How do you have price discovery without other bidders?
I love the degree to which "punitive" is a part of the dialogue here. How punitive can you be to a going concern? Is a 20% haircut enough? Doesn't sound like the Congress thinks so. Color me surprised.
I also love how time pressure is a continual theme of Congressional hearings. Used to cut off the opposing party, the witness, anyone we like. But, we are still run off at the mouth worse than even EP whenever it suits us so there.
Woops. I think Cox forgot his mic was live there for a second. Anyone catch that?\
Note for future Treasury witnesses: The fewer details you give the better. Don't say "reverse auction" unless you have given all these clowns a glossary with a video tutorial hosted by Sesame Street characters first.
Further note for future Treasury witnesses: Extra-strength antiperspirant is a good idea.
In your face CNBC, we had that Barclays logo on the Lehman building hours ago.
Q:Why aren't we doing this in tranches? Why can't you call us and ask for an allowance every $50 billion or so? Could you live with less than $700 billion?
Paulson: Oh no, we couldn't do that. What would the market think?
Oh no, not the reverse auction again. C'mon Hagel. I know that's supposed to be a softball, but still.
Did it sound to anyone else like Paulson just admitted that his staff and Hagel's were busy having touchy-feely meetings late after-hours in the Dirksen Federal Building?
12:31 pm
Notice how Cox isn't getting any love at all?
Oh, wait, he's getting some love on the "census." That's about what he should be administering I suppose.
Let's not forget that the RTC v. 1.0 returned money to the taxpayers. Yay!
UH OH! Nothing more dangerous than a congressperson talking on Credit Default Swaps. Is that Hillary? Wow, she got fat. The campaign was hard on her. Oh, wait, never mind.
Wait. Did The Beard just say "Sexual Counterparties" ?
On Senator Johnson:

In Washington, D.C., on December 13, 2006, during the broadcast of a live radio interview with WNAX radio in Yankton, South Dakota, Johnson suffered bleeding in the brain caused by cerebral arteriovenous malformation, a congenital problem that causes enlarged and tangled blood vessels. He underwent successful surgery at George Washington University Hospital to drain the blood and stop further bleeding. As of January 19, 2007, Johnson was undergoing physical, occupational, and speech therapy every day for three hours. This included strengthening exercises to gain mobility and work with parallel bars. His recovery was expected to take "several months." In his 2007 State of the Union Address, President George W. Bush wished Johnson well.

Wow, don't we feel nasty and awkward for harassing the guy because he has a hard time speaking.
1:03 pm
Yeah, the Congress really wants blood.
Back to foreclosure assistance. I suppose the taxpayers are watching.
"How long were you the CEO of Goldman Sachs?"
(Spattering of applause from the audience). Hah!
Aw, c'mon. We all know there were no regulations on anything Goldman did. Don't ask Hank about that stuff. Sheesh!