Henry Paulson Assessment Off the Mark

U.S. Treasury Secretary Henry Paulson said on Wednesday the re-pricing of credit risk was hitting financial markets, but U.S. sub-prime mortgage fallout remained largely contained due to the strongest global economy in decades.

Paulson said markets were unwinding excesses in U.S. mortgage and leveraged buyout financing.

“The market has focused on this. There’s a wake-up call, and there’s an adjustment to this re-pricing of risk, but I see the underlying economy as being very healthy,”

Paulson added that he did not see anything that caused him to reconsider his view that the economic damage from the housing correction was “largely contained,” despite losses in a number of financial institutions and a long period for sub-prime issues to move through the economy.

I am not a political or corporate hack. I do not have approved press releases and am not required to reassure citizens or investors. I do not have access to the boardrooms or strategic plans for the recovery. I would love to be a fly on that wall. If I couldn’t sell tickets for the show, I would try to get the contract for concessions to deliver food and beverages.

You know they are burning the midnight oil. Like the “Emperors New Suit” can not or will not see how exposed they are now and will be in the future. They are standing in a chorus line singing the refrain to “Annie”, Tomorrow, Tomorrow, the sun will be out tomorrow.

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