``I believe in substance… I don't believe that you get things done just by getting together and having a drink or laughing, or interacting personally. While that's never a negative, you need to bring value.'' –Hank Paulson
For those of you who have been to Jackson Hole, Wyoming, and do “interact personally” with other human beings, you’re probably familiar with the “Million Dollar Cowboy Bar” – the St. Nick’s Hockey Club of New York most certainly is!
As their website notes, the Cowboy Bar “has a long and colorful history that began in the late 1890’s”. It was actually both a doctor’s office and a bank before Joe Ruby built it into his now famous “beer garden”. Hank Paulson doesn’t drink or smoke, and I must say that’s something I wish I could say, but he might reconsider after he endures the realities of this weekend’s discussions with everyone from Warren Buffett to Ben Bernanke.
All eyes are on the head of the US Treasury at this point, and Buffett himself kicked this morning’s meetings off out West suggesting that Hank’s Fannie and Freddie ideas aren’t so swift. Buffett is supporting what was once considered my “overly bearish” US and Global Economic outlook, saying he sees at least another 6-7 months of what we are seeing today and that Fannie and Freddie’s respective “equity” is probably worth zero.
Zeroes aren’t always good. Zero faults are - if you’re a Chinese gymnast - but then we have to figure out whether or not you’re really above the legal competing age of 16 years old. Zero Russian troops in the Georgian capital would be good, but that would imply that Putin isn’t speed bagging the Bush Administration like a staggering 150lb drunk at the Cowboy Bar.
Dear Hank,
For the sake of the sobriety of those of us holding greenbacks, we need you to eat your own cooking and show us that we can “believe in substance” again. Give us some transparency and accountability. This is not a time to bail out your old buddies on Wall Street. You don’t care to “laugh or interact personally” with these people anyway, remember? It’s time to level with Main Street America and get on with the program before Buffett’s 6 months turn into 18 painfully protracted ones.
At 10AM Eastern Time, your pal Ben Bernanke will be ‘You Tubed’ and broadcasted across the world with an opinion that will concern us more than it builds confidence. The US Federal Reserve has been politicized, and finally everyone knows it. It’s the US Treasury’s turn to step up. At 2% interest rates, and commodity led inflation having its biggest weekly gain (CRB Commodities Index) since 1975 this week, Ben is in a US Stagflation box. He may very well head to the Cowboy Bar later on this evening. If I had to manage my way out of this mess, that’s where I’d be headed.
Hank, we are depending on you. The time is running out on your clock as head of the US Treasury. History has a not so funny way of writing itself accurately. I am 85% in cash, and my savings account earns an embarrassing rate of return for my son and family because you’re overseeing a US Financial system with increasing risk to the downside. I’m not “laughing”. “You need to bring value”, soon.
Best of luck “getting things done” this weekend,
KM
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