In the beginning of March of last year Treasury Secretary Hank Paulson and Ben Bernanke saw the wheels were coming off the economy.
The two scrambled to right the cratering Wall Street banks before Bear Stearns ever entered the headlines. Protestations from former Bear head Alan Schwartz that his firm was on solid ground until the rug was pulled out from under him seem to be backed up by Paulson’s meeting and phone schedule from that time.
On Tuesday, March 4th 2008 Paulson has breakfast with the President. Prior to that morning Paulson was not sitting at the President’s breakfast table much. As an aside, the are more redactions or blacked out blocks of times on Paulson schedule during this time period than any other time.
Later in the day following a call to NY Fed chief Tim Geithner and Bernanke there is an hour blacked out which is followed by a call to Geithner.
On the 5th, Paulson spoke with Sens. Chris Dodd and Richard Shelby the two ranking members of the Senate Finance panel and Rep. Barney Frank of the House Finance panel and Nancy Pelosi. Then lunch at the White House.
On March 6th a day before JPMorgan Chase offered a 28-day loan to Bear to stem the loss of confidence, Paulson is traveling to California takes a call from the Italian central banker Mario Draghi. Why is Paulson speaking to central bankers? That’s Bernanke’s job.
A key adviser to Paulson during this time was Bob Steel, former Goldman Sachs vice chairman under Paulson when he ran the shop.
Steel was appointed Under Secretary for Domestic Finance at Treasury on October 10, 2006 and served until July 9, 2008.
Steel was the principal adviser to the secretary on matters of domestic finance and led the department’s activities regarding the U.S. financial system, fiscal policy and operations, governmental assets and liabilities, and related economic matters.
On the 7th Paulson called Steel at 4:30am (i assume that is local time in SF) and then Tim Geithner before calling Jamie Dimon JPM chief to sure up the Bear backstop?
Not sure a Treasury Secretary should be working on an MA desk at the same time.After Dimon he calls Lehman’s Dick Fuld but I don’t know why he would unless he was giving Lehman a heads up on its biggest competition in the bond market.
Big chunks of the day are redacted so its difficult to determine what else Hank was up to.
Over the weekend Paulson was at the Gridiron Dinner with someone who was redacted on Friday night and at the White House dinner Saturday night with someone who was also redacted.
Next post on Wednesday about the week Bear went down and the House held a rare closed session.
For more on Wall and Washington and the economy see: https://mgray12.wordpress.com