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On the More Serious (Only Just) Side

Interesting article from the International Herald Tribune on Paulson’s kicking-and-screaming acceptance of his “inner statist.”

The last line is worth the price of admission

Struggling to keep up as crisis raced on

By Joe Nocera and Edmund L. Andrews Published: October 23, 2008

“I felt like Butch Cassidy and the Sundance Kid. Who are these guys who just keep coming at us?” — Treasury Secretary Henry Paulson Jr.

It was the weekend of Sept. 13, and the moment Treasury Secretary Henry Paulson Jr. had feared for months was finally upon him: Lehman Brothers was hurtling toward bankruptcy — fast.

Knowing that Lehman had billions of dollars in bad investments on its books, Paulson had long urged Lehman’s chief executive, Richard Fuld Jr., to find a solution for his firm’s problems. “He was asked to aggressively look for a buyer,” Paulson recalled in an interview.

But Lehman could not — despite what Paulson described as personal pleas to other firms to buy some of Lehman’s toxic assets and efforts to persuade another bank to acquire Lehman. With all options closed, he said, the government’s hands were tied. Although the Federal Reserve had helped bail out Bear Stearns — and was within days of bailing out the giant insurer American International Group — it could not help Lehman, even as its default threatened to wreak havoc on financial markets.

Read the rest of the article

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