bernanke calls paulson 85 times during onset of subprime collapse
Bernanke Paulson Subprime Crash
New America Foundation discussion on the fate of the American economy as well as timely topics such as the subprime collapse. The broadcast originally was recorded in late November of 2007 while the CSPAN2 showing of the event occurred in the beginning of January 2008.
It is an illuminating discussion and I highly recommend watching it. You will come away with a better understanding of the shifts occurring in the global economy as well as the potential effects they may have on the American economy. The panel’s discussion of the subprime collapse — which was just beginning to manifest at the time the panel convened — is equally enlightening.
One particular segment that caught my attention was economist David Hale’s disclosure that Federal Reserve Chairman Ben Bernanke called Treasury Secretary Henry Paulson 85 times during the onset of the subprime collapse. It is speculated that Bernanke made said calls because he did not fully-grasp the extent of the problem, specifically Bernanke sought from Paulson a primer on the financial products — CDO, CMO, etc. — underlying subprime malaise.
At approximately 4:05 into the video Hale says:
The phone records indicate that in the month of August Ben Bernanke called Hank Paulson 85 times. Why was he calling Hank Paulson 85 times? The answer is very simple; Hank Paulson explained the crisis to him because Hank Paulson helped create it. So we have Hank Paulson explaining to Ben Bernanke what those changes in market value [of subprime securities] meant - what a CDO is, why this is turning into a very, very significant crisis. The good news is [Paulson] returned [the calls].
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