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More Housing Hanky-Panky

Seth Jayson
October 16, 2007

I'm shocked. SHOCKED
What else do you expect from a former Goldman Sachs (NYSE: GS  ) honcho who's presiding over an epic housing crash? Tough love? Free market economics? Please. It's all about keeping people happy, no matter what the cost.

Today, at Georgetown's law school, Treasury Secretary Hank Paulson made that plain. He followed up on yesterday's Wall Street bailout debacle by telling the world, "Let me be clear, despite strong economic fundamentals, the housing decline is still unfolding, and I view it as the most significant current risk to our economy."

You think, Hank?

Late to reality
He's right, of course. But what took him so long to figure this out?

Where was he when his Wall Street buddies at Goldman, Lehman Brothers (NYSE: LEH  ) , Bear Stearns (NYSE: BSC  ) , and Citigroup (NYSE: C  ) were raking in hundreds of millions in profit bonuses on the backs of trading in ever-more dangerous, ever-more-leveraged, black-box mortgage derivatives? Where was he when outfits like Impac Mortgage Holdings (NYSE: IMH  ) and Novastar Financial (NYSE: NFI  ) were building houses of cards from cheap Wall Street money that was sure to dry up as soon as the lousy loans stopped performing?