Wednesday, October 8, 2008

First Details of The Paulson Heist Emerge

OK, it's been clear from day one that the Paulson $700 Billion "Bailout" is the biggest scam in recorded history, since Paulson has set it up in a way that it won't bailout anyone.

Now, the first details of Round 1 of the scam emerge from WaPo (My emphasis):

The Treasury Department this week plans to start outsourcing the management of up to $700 billion in troubled securities using special contracting authorities that enable it to retain private portfolio managers, custodians and other financial services consultants without following standard acquisition procedures.... means that the government has little time to assess the companies that will be partners in what could become one of the largest public-sector funds in American history. Some of the same firms that have played roles in the rise and collapse of the mortgage-backed securities market may end up guiding the government as the bailout unfolds, department officials said...

Contracting specialists said the department has the authority to retain "financial agents" to manage money on its behalf. By using that authority at a rapid clip, instead of through traditional acquisition procedures, the government creates a risk that it won't hire the best firms at the best price, they said.

D. Kent Goodger, a contracting official for four decades who now teaches procurement classes for the federal government, said decisions to bypass federal acquisition regulations for urgent and compelling reasons in the past has led to trouble and cost overruns. "By rushing ahead, doing this quickly, it creates inherent risks," Goodger said...

An analysis by Taxpayers for Common Sense, a watchdog group, found that the government's use of private firms during the resolution of the savings-and-loan crisis two decades ago lead to "untrammeled payouts to the private sector and reprimands from Congress and the Government Accountability Office."
Bottom line, the public was right in opposing this measure, and one has to begin to think that Naomi Wolf is right and that a coup has taken place in America.

The Bill just passes, so you would think that the Treasury would be walking on egg shells trying to do everything step-by-step with prudent procedures. Instead, they not only throw out standard procedures, they go out and employ that great method known as reckless abandon, which in the past has lead to "untrammeled payouts to the private sector and reprimands."

And, this is Round 1. Just wait for the details on how Treasury plans to buy and sell mortgages and mortgage securities, when no one has a clue as to what many of them are actually worth.

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