Study: Bernanke, Paulson misled public on bailouts

It is beginning to look more and more like the Bernanke/Paulson bailout of banks (TARP) last year was to tank Sen McCain's chances. Our question has been from Day One why Paulson of Goldman Sachs recommended by Sen Schumer (D-NY) was even nominted by President Bush to be Treasury Secretary? Has anyone investigated the million of dollars that Paulson lead enterprises have invested in China? Excepts posted from a Frank Gaffney article at NRO, bring into even more question, why Paulson was nominated to be the Secretary of the Treasury overseeing the assets of the US Government.

Henry Paulson has been Communist China’s Armand Hammer. In fact, he has been vastly more effective than Hammer ever was in promoting his clients’ interests and enabling their access to Western economic assistance and high technology.

Under Mr. Paulson’s leadership at Goldman Sachs, the company has been instrumental to the growth of Chinese economic power and particularly to its penetration of Western capital and other markets. He has been directly involved in developing his firm’s relationships with the PRC, priding himself on having made 70 trips there since late 1991. Consider just a few of the deals Goldman has managed, underwritten or otherwise facilitated under Henry Paulson’s leadership:

In 2005, Goldman Sachs not only advised the China National Offshore Oil Corporation (CNOOC) in its attempted takeover of Unocal. It also strove to ensure that the Chinese state-owned company’s bid prevailed after ChevronTexaco offered $17 billion in an effort to keep Unocal in U.S. hands. CNOOC was able to up the ante to $18.5 billion for the American concern, thanks to a bridge-loan Goldman Sachs arranged (along with J.P. Morgan). Fortunately, despite the assiduous efforts made by Mr. Paulson and his firm to secure Unocal for Communist China, the American people and Congress strenuously opposed the transaction, leading ultimately to its derailing.

In late January 2006, Goldman Sachs purchased a stake in the Industrial and Commercial Bank of China (ICBC), China’s biggest bank, for $2.58 billion. According to press reports, Mr. Paulson’s personal stake in this transaction was $25 million.

Excerpt: See National Review for Full Article

One thing we have always admired about Frank Gaffney is his honesty and straight forward comments. Gaffney founded the Center for Security Policyin 1988 which has become a voice in foreign policy. Obama would have been well served to listen to Frank Gaffney instead of Holbrooke but then he might have had to change his liberal agenda.

Now we discover that Americans were mislead to by Paulson/Barnanke which proves that Gaffney was right to oppose the appointment of Paulson to be Treasury Secretary.

Monday, October 5, 2009

Study: Bernanke, Paulson misled public on bailouts
Financial institutions not so healthy
By Sean Lengell

Federal Reserve Chairman Ben S. Bernanke and former Treasury Secretary Henry M. Paulson Jr. misled the public about the financial weakness of Bank of America and other early recipients of the government's $700 billion Wall Street bailout, creating "unrealistic expectations" about the companies and damaging the program's credibility, according to a report by the program's independent watchdog.

The federal government last October loaned Bank of America and eight other "healthy" financial institutions a total of $125 billion - the initial payout from the Troubled Asset Relief Program, or TARP - in an attempt to avoid a series of major bank collapses that would push the sputtering economy into a free fall or depression.

The rationale for giving money to stable banks and not failing ones, regulators said, was that such institutions would be better able to lend money and thus unfreeze tight credit markets - a major factor in last year's Wall Street losses.

But an audit released Monday by TARP Special Inspector General Neil Barofsky says senior government officials and Wall Street regulators, including Mr. Bernanke and Mr. Paulson, had "affirmative concerns" that several of the nine institutions were financially shaky.

Excerpt: See Washington Times for Full Article