Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Ben Bernanke Financial Crisis Hero

Stock-Markets / Financial Crash Sep 13, 2013 - 07:58 AM GMT

By: Bloomberg

Stock-Markets

Former Treasury Secretary, Hank Paulson joined Bloomberg Television’s Tom Keene today on “Street Smart.”

On being Treasury Secretary for two years, six months, and ten days:

“It went quickly, but I hit the ground running. I had fortunately, a year before the crisis to build relationships of trust with the President and that relationship was clearly critical.”


On whether President George W. Bush was engaged:

“This man was totally engaged. He was a great boss. He was accessible all the time.  Could get him early or get him late. What he did during the crisis, he recognized we needed a different set of procedures. He said, I was his wartime general. We had a good working relationship.”

On what was Tim Geithner if he was the wartime general:

“I worked directly for the President. Geithner, Tim, was a close partner. The relationship that Ben Bernanke, Tim Geithner, and I had were ordinary. They were true partners. The level of cooperation, mutual trust, made the working relationship very unusual.”

On what Dick Fuld was going through:

“Agony. Every CEO on Wall Street was tested. This was a 100-year storm. They were dealing with problems they had not seen in their lifetime and it was totally new. Many of them working to keep their companies solvent. To be there and go down with your ship is very, very sad.”

On not being able to communicate to the public that the bailout was a rescue for the economy rather than a bailout for Wall Street:

“I was unable…It was a difficult thing to do. Communication, publically, of that broad audience, I thought it should be obvious that as Treasury Secretary of America, everything I was doing was to save the American people. I knew how bad it would be if the system collapsed. But it was a communications challenge because I feared to come upon us. The more I talked about what it would be.”

On why East Coast elites should trust guys like him:

“Where I was at my best was working in smaller groups, working with colleagues in the administration, working with democrats and republicans on the Hill, building trust based upon credibility, working together, being nonpartisan. I think for me, as a public speaker going broadly, first of all, for people to understand what we did and agree with it, you have to understand how severe the crisis was. You had to understand that if the system collapsed it could be the Great Depression all over again. They could lose their jobs. I think part of the challenge for me was, I did not want to say it quite that bluntly because we were on the edge. What I had to decide between communicating one way and stability, I always opted for stability.”

On what his best practices for the elite to transfer their message to Main Street:

“To do this job right today anywhere in the world and particularly in the United States running any big global company is much more difficult than it’s ever been. There are many demands on a CEO. One of the demands is speaking to the public and helping the public understand you and your company, your business, and its value to society. Banks are a huge part of our economy. Our financial system, our banking system is the strongest in the world. It’s the most transparent. It’s the most efficient. Its core strength. It has problems, but it is an honorable profession.”

On whether he is confident we will not have another financial crisis:

“Here is what I say. It is the question I get asked of the most. We will certainly have another financial crisis, as long as we have financial markets and bouts of panic there will be crises. Most of them are manageable. What we need to do is avoid these massive disruptions, like the Great Depression or like the 2008 crisis that could have been the Great Depression. I say the following. The system today is much safer than it was. We’ve made a lot of progress but we have more work to do. We need to finish cleaning up our messes and we need to fix the number of flawed government policies beginning with Fannie Mae and Freddie Mac.”

On why Jamie Dimon and others fight the simplistic idea of just putting more capital on the books:

“ The question is how much? I’m a big believer that it is the best defense against failure. We want capital and liquidity.  What I would say here, the banks are already much better capitalized. Second of all, we have the new regulations put out by the Federal Reserve and other regulators which call for a capital surcharge for the biggest financial institutions. I think that’s a very good first step. On top of that, regulators now have the tools so they can manage the failure of any large institutions.”

On what characteristics the next Fed chair needs to confront those possible instabilities:

“The next phase will be important because there will be much more of an emphasis on a return on assets,  productivity, real growth, and we are going to have to as Chairman Ben Bernanke has said, we are going to have to move from these extraordinary low interest rates and get back to real margin.”

On whether he has the confidence we will do that without instability and shocks:

“There’s bound to be volatility. There is no perfect solution when you have a big, ugly, messy problem. There will never be a perfect, elegant solution. I believe that Ben Bernanke has been a hero. To be where we are today, where you have growth of 2% since late 2009 while we have been undergoing this necessary and massive deleveraging of consumers, it’s important. There is bound to be volatility. The next Fed Chairman, again, which is a huge,  very important decision for President Obama, the key qualities are, first of all, fierce, independence, great ability, and to be someone who you want to see a return to and Ben Bernanke. And then someone who is a good communicator.”

On Putin’s Op-ed questioning American exceptionalism:

“Well, this is a very special country. It's a country that's based upon innovation, entrepreneurship. And the key thing is social mobility, the fact that everyone feels in this country they've got a chance to succeed. And so I think the most important thing we have to do to keep this spirit of American exceptionalism is fix our economy so that we're growing at a level so we can sustain our long-term prosperity, create jobs and narrow the gap – this widening income gap. Because I think if there's anything that's demoralizing, it's to have the gap get wider and wider. And to do that, I think we're going to need some bipartisan compromise in Washington and get some – some policies that are really pro-growth policies. Immigration reform, a different tax system, et cetera.”

bloomberg.com

Copyright © 2013 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Bloomberg Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in