CNBC is reporting that a meeting known as the “Goldman Sachs roundtable” took place just hours after Geithner’s speech on Tuesday, at the headquarters of Goldman Sachs in lower Manhattan.
Around 20 of the firm’s biggest hedge fund and private equity clients showed up.
They included representatives of KKR, Fortress Investment Group, Bain Capital, Perry Capital, Capital Research, Putnam and Citadel.
Goldman Sachs says the meeting was planned well in advance. But people who attended tell CNBC that they received the invitation after the speech and decided to attend because of the speech. Goldman Sachs initially denied that the meeting, hosted by co-presidents John Winkelried and Gary Cohn, took place.
According to CNBC, talk around the table went like this:
Ken Griffen, the founder of Citadel, stressed the need not merely to fix the prices of the securitized bonds, but also that any plan must stabilize the root cause of the problem—the mortgages themselves. And he came up with several ideas to spur homeownership that could revive the housing market.Bottom line: Nobody knows what the hell is going on, or what should be done. BUT while all this cluelessness goes on, Bernanke is printing money at a madman's pace. One wonders how all these characters are going to deal with the inflation problems when that ultimately rears its ugly head, as a result of Bernanke's moves.
Also some worry exists over speculation that Obama economic adviser Paul Volcker doesn’t have a more formal role in the process of coming up with a bailout plan. (RW note: Larry Summers has clearly marginalized Volcker. Volcker, from his room deep in the cellar, has been talking about spending billions, so he is not the answer.)
Some actually had met with officials at the New York Federal Reserve after Geithner's speech and were told the plan is still weeks away. That wasn’t received well.
Stay tuned and stay in gold.
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