Is Paulson to be Trusted, or is this Bush Administration Shock and Awe, 2.0?
Paulson's past statements, specifically, his declaration six months ago that "our institutions, our banks and investment banks, are strong," or his statement four months, "I do believe that the worst is likely to be behind us," can lead one such as myself who disliked Bush politics before it was cool to do so to wonder about this man's credibility. Stage exit left every major investment bank in this nation, the largest mortgage bank (Countrywide), the largest bankruptcy in the history of this country (Lehman), the largest THREE bailouts of any single company (Fannie, Freddie and AIG), and the imminent failure of the largest thrift (WaMu), not to mention all of the trash paper sitting on the books of banks, brokers and hedge funds (see Counterparty risk analyses - counterparty failure will open up another Pandora's box, Banks, Brokers, & Bullsh1+ part 1, and Banks, Brokers, & Bullsh1+ part 2).
Now he declares that we face a virtual financial armageddon if we do not immediately give him a revolving credit line of $700 billion+ dollars and immunity from the law and the legislature? Have I missed something here? Now, I've been known to doubt this man in the past (see Reggie Middleton says don't believe Paulson: S&L crisis 2.0, bank failure redux), but this most recent ballsy move is actually disturbing my sleep (and as cute as I may be, even I need what little sleep I can get!).
His extreme flip-flopping leads me to believe that he is either disengenious or incompetent. After all, I have considerably less resources at my disposal, and I declared as far back as April that "The worst is behind us, unless massive bank failure is considered a bad thing!".