Paulson Calls for Tough Rules

The senators have finished beating up on everyone and Treasury Secretary Hank Paulson began his forceful testimony.

"The events of today began many years ago with banks and lenders using bad lending practices and borrowers taking out mortgages they couldn't afford," Paulson said.

He has gone off on a couple of what he's called "ad hoc responses," speaking with emotion about the events of the past weeks.

"I share your frustrations, I feel your frustrations about the practices" that led to the current crisis "and they also upset me," he said.

Paulson said the economy was much closer to the precipice than many may have realized, and referred to his "bazooka in the pocket" comment from April, which referenced the massive firepower available at Treasury to bail out Fannie Mae and Freddie Mac, which the government eventually deployed.

"You all can be darn glad you gave us that bazooka because we needed it," Paulson said.

He concluded his testimony by calling for strong congressional oversight.

"I believe we need oversight, we need protection, we need transparency," he said.

Wall Street is watching this hearing closely.

In late-morning trading, the markets were still in positive territory: the Dow was trading up about 74 points, and the Nasdaq and the S&P were up 17 and 5 respectively.

-- Frank Ahrens

September 23, 2008; 11:20 AM ET  | Category:  business
Previous: Senate Goes After Regulators Past, Present | Next: SEC's Cox: Subprime Probes Underway

Comments

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"He concluded his testimony by calling for strong congressional oversight.

"I believe we need oversight, we need protection, we need transparency," he said." ...

Then why did the bailout submitted to Congress explicitly forbid such oversight?

Posted by: corbett | September 23, 2008 11:29 AM

I'm watching the hearings and I'm seeing slimy bugs dribble out of their mouths. These men created this mess and now they are desperate to bail out their good buddies and protect their own reputations until the worst administration in the history of our country gets out of town. They are lying and anyone watching can see it.

Congress needs to slow way, waaaay down! There is no rush! They are being conned. Heck-of-a-job-Hankie doesn't know if it will work - nobody does. All we DO know is that Paulson and the rest of them have been 100% wrong in everything they have done in the past. Why on earth is Congress even THINKING about trusting them again?

Posted by: Casey | September 23, 2008 11:42 AM

Paulson ... referred to his "bazooka in the pocket" comment from April, which referenced the massive firepower available at Treasury.

He should read Freud.

Posted by: pablo cassals | September 23, 2008 12:04 PM

To all potential home buyers:

Hold off buying for at least 1 more year.

Prices will be dropping significantly.

Posted by: Michael | September 23, 2008 1:06 PM

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