Live-Blogging Henry Paulson on Capitol Hill
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Former Treasury Secretary Henry M. Paulson Jr. testified before Congress on Thursday about his role in persuading Bank of America to complete its acquisition of Merrill Lynch. Zachery Kouwe of The New York Times live-blogged the hearing on DealBook, with the most recent posts at the top.
2:56 p.m. | Its a Wrap: The hearing is adjourned. Maybe Mr. Paulson can still make that 4:45 flight.
2:51 p.m. | Bair and Cox Next?: In his closing remarks, Mr. Towns asks how Merrills losses went from $9 billion to $20 billion in such a short amount of time late last year. Mr. Paulson says he simply doesnt know how Merrills losses accelerated so quickly. I saw and witnessed things I never had seen before, he says, referring to the state of the markets at the time.
Mr. Towns says the committee needs to hear from Christopher Cox, the former chairman of the Securities and Exchange Commission, and Sheila Bair, the chair of the Federal Deposit Insurance Corporation.
In a particularly contentious exchange, Marcy Kaptur, Democrat of Ohio,...
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2:15 p.m. | Goldman and Warren Buffett: In a particularly contentious exchange, Marcy Kaptur, Democrat of Ohio, claims Mr. Paulson knew all along that there were problems in the financial system and orchestrated the TARP to be the biggest public bailout of the private sector in history.
It looks like some very rich people are now profiting, Ms. Kaptur says, referring to the record-setting quarterly profits at Goldman Sachs. She compares the terms of the governments TARP investment in Goldman with the terms that Warren Buffett, the famous investor, got on his preferred stock investment in Goldman. Why did Mr. Buffett get a better deal than taxpayers?
Mr. Paulsons answer: At the time, Mr. Buffetts type of capital wasnt available. You do not stop a financial panic by offering capital to banks at the only terms available in the middle of a crisis, he says.