Hank Paulson on Lehman Brothers, Government Failures and Dry Heaving
Hank Paulson is a lot more popular now than he was a half-decade ago. The former Treasury head who was the key figure in the government bailouts of Wall Street is commemorating the five-year anniversary of the beginning of the financial crisis – the explosive failure of Lehman Brothers – with a media tour that has taken him from print to television and even a Netflix documentary that will air next week.
Paulson has so far made a number of interesting statements. Here are the most illuminating:
- He doesn’t regret the bailouts, but does still lose sleep over how he communicated the importance of rescuing financial institutions to the American public. “Let’s not forget…that money came back plus $32 billion,” he told The Today Show.
- Financial crises are an inevitability. The root causes of all of them are flawed government policies.
- In all his dealings with banks and Congress, Paulson forgot to call one very important person: his brother Dick, a fixed-income salesperson at Lehman’s Chicago office. “I called, and he immediately started asking about me,” Paulson noted in a Bloomberg op-ed. “He wasn’t asking about what was happening to his stock or his retirement. He focused on me.” Talk about a brutal phone call.
- Paulson believes another financial crisis is still very possible, for three main reasons. One, the mortgage industry – through Fannie Mae and Freddie Mac – is essentially nationalized. Ninety percent of mortgage loans have government guarantees. Two, shadow banking is still rather prevalent. More transparency is needed. Three, there are way too many financial regulators who are essentially competing against each other. “This is a big problem.”
- President Obama has not asked Paulson for advice on who should become the next Fed chair. “If he wants my advice, he’ll ask me,” Paulson said, without giving any hints about who he’s supporting.
- Paulson has a strange dry heaving habit that kicks in when he is exhausted. “It sounds like I’m really sick, because I make a lot of noise. Rahm Emanuel came by. Harry Reid offered to get a doctor. I said I didn’t need it.” Weird.
Millennials face an uphill battle when it comes to earning promotions. One key way to distance yourself from the pack of “entitled” twenty-somethings by building your personal brand. Here’s how to pull it off.
Slow-moving global rules for derivative markets "may not go far enough in a number of respects,” according to Federal Reserve Bank of New York President William Dudley, who’s calling for more aggressive measures. Someone important must have sent a memo to regulators – we’ve seen a near uniform pushback on the softening of Wall Street rules in recent weeks.
New analysis by Morningstar examines the shifting marketplace and reveals the best companies based on your focus. Here’s their breakdown on firms based on client size and a look at which ones have been hiring.
Wall Street analyst Meredith Whitney, known recently for predicting massive rounds of layoffs – over and over again, was spot-on during the financial crisis, making correct calls on several big collapses. Ironically, she took a bath on a few long positions, including Lehman Brothers, and ended up losing as much as $500,000 personally during the economic downturn.
Former Deutsche Bank Chief Executive Josef Ackermann plans to step down from Siemens’ supervisory board. Ackermann said the decision has nothing to do with the suicide of Zurich Insurance finance chief Pierre Wauthier, who pointed blame at Ackermann in his final note, forcing him to step down as chairman of the insurance giant.
Why do kids still want to work on Wall Street? Famed author Michael Lewis offers his two cents: “The barriers to entry on Wall Street are quite low once you have the [Ivy League] credentials. If you’re a certain kind of kid who doesn’t actually know anything about anything, Wall Street is still a great place to go.” Just a bit cynical, Mike.
The two architects of Morgan Stanley’s research platform are headed to UBS. The move is “shocking” to everyone at Morgan Stanley.
Buzz Around the Office
If you live in New York City, you likely know that riding clunky Citi bikes is about as much fun as riding the subway. That makes these tricks even more impressive.
List of the Day: Age Bias
Age bias is all-too-real. These tips can help prevent it from happening to you.
- Stay in excellent shape.
- Tune in to the Internet.
- Overcome irrational fears.