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Paulson: Russia Tried to Get China to Blow Up Fannie and Freddie
Economic Policy Journal ^ | 1/30/10 | Robert Wenzel

Posted on 01/31/2010 7:41:28 AM PST by FromLori

Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, according to former-Treasury Secretary Henry Paulson, in his new book, On the Brink.

Paulson learned of the “disruptive scheme” while attending the Beijing Summer Olympics. In his memoir, Paulson writes, according to Bloomberg which was able to obtain a copy of the book before its official publication date of February 1, that the Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies.”

This is indicative of how dangerous the Chinese holdings of U.S. debt are. It is a huge financial weapon that the Chinese can use anytime they choose for any purpose they choose. But by selling only selective debt, rather then selling various random chunks of their U.S. debt, the Russians have brought to the attention of the Chinese, if they hadn't thought of it already themselves, how to launch a limited financial nuclear attack by getting them to focus on a particular type of debt, such as Fannie Mae or Freddie Mac. Such a surgical strike would do much to protect the overall investment the Chinese have in U.S. debt, but at the same time cause a severe headache for the U.S.


TOPICS: Government; News/Current Events
KEYWORDS: china; fanniemae; fed; freddiemac; globaleconomy; mortgage; paulson; russia

1 posted on 01/31/2010 7:41:28 AM PST by FromLori
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To: FromLori

Why should Russia try this? They have Barney Frank to do the job for them.


2 posted on 01/31/2010 7:42:10 AM PST by highlander_UW (There's a storm coming - little kid at a Mexican gas station in The Terminator)
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To: perchprism; LomanBill; JDoutrider; tired1; Maine Mariner; demsux; April Lexington; Marty62; ...

ping related

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afbSjYv3v814


3 posted on 01/31/2010 7:43:21 AM PST by FromLori (FromLori)
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To: highlander_UW

It was around the time Russia went to war maybe they thought fwank wasn’t doing it fast enough.


4 posted on 01/31/2010 7:44:21 AM PST by FromLori (FromLori)
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To: FromLori
It was around the time Russia went to war maybe they thought fwank wasn’t doing it fast enough.

Maybe they're afraid Frank and Dodd will get themselves removed before they complete their task of destroying the American economy.

5 posted on 01/31/2010 7:46:15 AM PST by highlander_UW (There's a storm coming - little kid at a Mexican gas station in The Terminator)
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To: FromLori

See also

Of course, the Russians were very prophetic, with the formal GSE conservatorship announcement following a few short days later on September 6, 2008. They also knew how to put their money where their mouth was:

Russia sold all of its Fannie and Freddie debt in 2008, after holding $65.6 billion of the notes at the start of that year, according to central bank data. Fannie and Freddie were seized by regulators on Sept. 6, 2008, amid the worst U.S. housing slump since the Great Depression.

http://www.zerohedge.com/article/russia-urged-china-dump-its-fannie-freddie-holdings-gse-bailout


6 posted on 01/31/2010 7:46:38 AM PST by FromLori (FromLori)
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To: FromLori

so why isn’t this an act of war? why didn’t we retaliate?


7 posted on 01/31/2010 7:47:05 AM PST by coalman (survived carter ,disco and clinton,just holding on till 2012)
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To: highlander_UW

Actually it was probably smart on their part lol given fannie/freddie


8 posted on 01/31/2010 7:47:50 AM PST by FromLori (FromLori)
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To: highlander_UW

Because we forced them into bankruptcy. I’d imagine Putin wuld enjoy watching us take that medicine.


9 posted on 01/31/2010 7:48:26 AM PST by my small voice (A biased media and an uneducated public is the biggest threat to our democracy)
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To: coalman

I don’t know but they did sell theirs I guess why was it ok for our banks to poison the world with bad fannie and freddie loans?


10 posted on 01/31/2010 7:49:37 AM PST by FromLori (FromLori)
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To: FromLori
Russia would have had little to lose. Why not have the world's top economic superpowers (at that time the US was an economic superpower) destroy themselves so they can sit back and emerge stronger.

Do the Russians think the Chinese are stupid?

11 posted on 01/31/2010 7:52:26 AM PST by The_Media_never_lie
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To: FromLori

If true, ya think the Russians and ChiComs real target was the US elections?


12 posted on 01/31/2010 7:54:22 AM PST by ricks_place
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To: my small voice
Because we forced them into bankruptcy. I’d imagine Putin wuld enjoy watching us take that medicine.

No doubt. And may seem to forget that Putin was KGB. He's not just your normal Russian...he's a solid ideologue.

13 posted on 01/31/2010 7:55:17 AM PST by highlander_UW (There's a storm coming - little kid at a Mexican gas station in The Terminator)
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To: ricks_place

You know I hadn’t thought of that good question. According to the Bloomberg article I put in Paulson said it so either he is just a filthy liar or maybe that was part of the reason.


14 posted on 01/31/2010 7:56:37 AM PST by FromLori (FromLori)
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To: FromLori

8/25/2008

China Construction Bank Cuts Fannie, Freddie Bond, MBS Hldgs

http://investment-blog.net/china-construction-bank-cuts-fannie-freddie-bond-mbs-hldgs/

8/28/2008

China Dumps US Dollar Denominated Debt: Bank of China flees Fannie-Freddie

http://www.globalresearch.ca/index.php?context=va&aid=9999


15 posted on 01/31/2010 8:34:50 AM PST by Chad_the_Impaler
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To: Chad_the_Impaler

Wow very interesting another fly in the ointment. Again can’t say as I blame them it’s nothing but toxic garbage the banks sold to the entire world.


16 posted on 01/31/2010 8:39:11 AM PST by FromLori (FromLori)
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To: Impy; TigersEye; floriduh voter; snippy_about_it; ovrtaxt; syriacus; TigerLikesRooster; ...

FLASH .....!!!!!!!!!!!

More light shed on the way we are economically manipulated!

Russia Urged China to Dump FANNIE, FREDDIE Bonds...
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afbSjYv3v814
http://www.freerepublic.com/focus/f-news/2441326/posts
“This is indicative of how dangerous the Chinese holdings of U.S. debt are. It is a huge financial weapon ...”

[other news]

ATLAS EXCLUSIVE: Obama Organizing in High School
http://www.freerepublic.com/focus/f-bloggers/2441330/posts
“Obama is using our public school system to recruit for his Alinsky-inspired private army.”

1 Billion Dollar Pay Off To Taliban
http://www.infowars.com/1-billion-dollar-pay-off-to-taliban

[More headlines in link blast response to this post.]

[Want on LINK-BLAST PING LIST? Most will advise you, just say “no”. Want off? Just cuss me out. Light volume, but might ping twice in a day if news is hot.]


17 posted on 01/31/2010 8:46:31 AM PST by Arthur Wildfire! March (2010 HOUSE RACES! Help everyone get the goods on their House Rats. See my profile.)
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To: Arthur Wildfire! March

South blanketed with ice, snow; mid-Atlantic next...
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http://www.freerepublic.com/focus/f-bloggers/2441325/posts

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Daily Presidential Tracking Poll (January 31, 2010: Hussein is at -7)
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http://www.freerepublic.com/focus/news/2440754/posts?page=3

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Timing, Grahamnesty, timing. Ever hear about Climage-Gate? [Good grief.]

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http://www.freerepublic.com/focus/f-news/2440793/posts
[This is a critical time to keep China from feeling superior. If we can ride this bad period out, then Japan will be an important ally in weapons development, and India will also be a critical ally.]

A Tale Of Two Super Bowl Ads
http://www.freerepublic.com/focus/f-news/2441335/posts
“Pam Tebow’s decision in 1987 to give birth to her son Tim ...” [accepted]
[And then there’s the leftist ad ...]

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http://www.freerepublic.com/focus/f-news/2441333/posts
[New war in Israel?]

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http://www.freerepublic.com/focus/f-news/2441331/posts
[He wants to serve in NK military.]

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As Protests Continue, Chavez Vows To Crack Down...
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Climate chief knew about glacier flaws...
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OBAMA FINDS [a measley] $20B IN CUTS
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WALL ST YAWNS...
[Note that 2 million census workers will temporarilly prop economy.]
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[Why help their economy with US bases? Move bases to Taiwan.]

Infowars Headlines:
A Growing Share of Americans’ Income Comes from the Government
Poll: Americans pretty clueless about politics, world
Mysterious Bush-Bush-Obama meeting at the Oval Office
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Brit government invents 33 new crimes every month
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[IMO, BO will try to seize gold holdings one day. You need gold-in-hand, not on paper.]
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[WHO — World Health Org.]
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[Note that anti-regulation has kept Canadian banks stable since 1927.]


18 posted on 01/31/2010 8:47:44 AM PST by Arthur Wildfire! March (2010 HOUSE RACES! Help everyone get the goods on their House Rats. See my profile.)
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To: FromLori

I am sure they did and we would do the same to them.


19 posted on 01/31/2010 8:52:57 AM PST by Roklok
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To: ricks_place

“If true, ya think the Russians and ChiComs real target was the US elections?”

Entirely possible. And why wouldn’t they? Is Russia are friend? Do they still have more nukes pointed at us than we do on them? And Obama will of course enable them in their attempts to dismantle us.


20 posted on 01/31/2010 9:07:11 AM PST by Wildbill22
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To: FromLori

well,I guess ,if they knew they wouldn’t get their money,but that wasn’t the case,was it? governments should and can work out things like that with each other,their aim was to cripple us economically/banks were forced to poison the world by congress,the same congress that is fixing the mess now,with more poison.


21 posted on 01/31/2010 9:34:29 AM PST by coalman (survived carter ,disco and clinton,just holding on till 2012)
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To: FromLori
Hahaha - what a pathetic loser! So Paulson is saying, our corrupt government enterprises will only survive as long as people buy their bonds but never sell them!

I have a different theory. There was a "disruptive scheme" enacted by the US legislature enabling Fannie and Freddie to guarantee subprime loans that would have not existed in a free market. These legislators are the real enemies of the US that Paulson wants us to believe Russia and China are.
22 posted on 01/31/2010 9:43:18 AM PST by billybudd
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To: FromLori
Folks, if you despise Barney Frank, become a Fan of this page:

Fannie Mae is BARNEY MAE
23 posted on 01/31/2010 3:52:47 PM PST by StopObama2012
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