October 18, 2011

Karl and Tom: Ending the Foodfight

Filed under: Economy,News from Other Sites,Taxes & Government — Tom @ 9:48 pm

FoodFightWelcome to those linking over from the recap I put up at PJ Tatler (“Tom, Karl, and Paulson’s (Figurative) ‘Gun to the Head’: The Last Word”).

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Previous items:

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It seems that objections coming from “Karl” (I’ll stick to using his first name since that’s all he’ll use of mine; maybe he thinks we’re best buds or something; if so, guy, please don’t make it “Facebook Official,” okay?) over at Market-Ticker.org now boil down to these:

  1. A picture he shows of two supposedly happy bankers leaving Henry Paulson’s extortion chamber.
  2. A really weird and false contention on his part that Troubled Asset Relief Program (TARP) funds haven’t, as I stated, been largely repaid.
  3. The use of two quotation marks (really).
  4. My somewhat different yet not understood (by him) take on the meaning of the events of October 14, 2008, the years of government, financial, and bipartisan political malfeasance which led to them, and factors influencing why the economy isn’t growing acceptably.

Item 4 remains extraneous. Karl has his opinions; I have mine. I think I understand his. He doesn’t really seem to care about mine (except when he erroneously thinks they’re statements of fact which he can then characterize as “utter falsehood”), which at this point is just as well.

The supposedly probative picture of only two of the bankers who participated in the now-infamous October 14, 2008 meeting with Treasury Secretary Hank Paulson doesn’t prove anything, in at least three senses:

  • Those who have successfully been shaken down by someone far more powerful than them can’t exactly afford to look like they’re unhappy, even if they really are.
  • The original column I wrote in full context was based largely on a CNBC report which made it crystal clear that some (that’s s-o-m-e, Karl, not “all”) bank CEOs objected to being forced to take Godfather Paulson’s offer they, as the New York Times reported, “could not refuse.”
  • The Times specifically identified Wells Fargo and Bank of America as registering strong objections. One can argue over whether these two banks’ CEOs were being delusional in believing they didn’t need help, but that doesn’t change the reported fact that they claimed they didn’t need it.

Even if you somehow know beyond doubt that their appearances were sincere (and I don’t see how you can, Karl), the assertion that two bankers’ happiness in front of the cameras proves that all of them were privately happy with what went down is an epic fail in fundamental logic.

As to whether TARP funds have, as I asserted, been largely repaid, they have. The program’s three-year anniversary report tells us that out of $413 billion spent, $124 billion, or 30%, remains outstanding. The other programs and problems Karl cited are clearly matters of extremely deep concern, but they aren’t part of TARP.

The third objection from crack grammarian Karl is the most risible. It concerns the following paragraph from the original column:

The “gun to the head” was obvious: “You really have a nice bank there. But if you walk out without signing this document, right here, right now, we will bring all of the regulatory and law-enforcement powers of the United States government to bear on your institution. Your depositors and shareholders will suffer immensely. Your bank won’t survive. It would really be a shame if that were to happen. But we promise you, it will.”

Note that Karl, in his re-rebuttal excerpt, left out the first seven words. I believe that’s not an accident, as their inclusion blows his breathtakingly ignorant contention out of the water.

You see, Karl, the first seven words of that paragraph — unless you believe that Hank Paulson was holding an actual gun against the CEOs’ heads, which would in turn depend on CNBC’s Charles Gasparino also believing it — made it clear to anyone with an IQ above room temperature that what followed was a succinct if somewhat dramatic interpretation of what I believe, based on the CNBC and Times reports, was the atmosphere in that room. For you to believe that I have misled those who have read the piece into actually believing that Hank Paulson used the exact words between the offensive but probably not grammatically incorrect in context quotation marks, you would also have to believe — this explains why you “cleverly” left the first seven words out of your excerpt — that Hank Paulson had an actual gun in his hand and serially put it up against each CEO’s head as he moved around the room, forcing them to sign their respective one-page “agreements.”

Karl, I think it’s pretty damned obvious who, to use your terminology, is being “dumber than a box of rocks.” As to the use of the quote marks, I’ll turn myself and my PJM editor over to the tender mercies of my grade school English teacher Sister Jude or a nun of PJM’s choosing for a ruling, followed if necessary by a few ruler slaps on our respective wrists. Zheesh.

Thus, as demonstrated on Monday, the original column contains no “utter falsehoods.”

The demand for an unconditional apology to me and Pajamas Media stands. To repeat, Karl, it must go like this: “I was wrong. I am sorry. I will appropriately retract.”

Personally, I don’t give a flying flip whether Karl Denninger renders the required apology. He’s the one hanging out there looking so obviously foolish describing me, in effect all the contributors at Pajamas Media, and the web site’s management, “as the liars they are.” He’s the one with the problem.

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5 Comments

  1. [...] one final shot (that’s figurative, Karl, as is “gun to the head”). It’s here (“Karl and Tom: Ending the Foodfight”) at my home [...]

    Pingback by The PJ Tatler » Tom, Karl, and Paulson’s (Figurative) ‘Gun to the Head’: The Last Word — October 18, 2011 @ 9:57 pm

  2. There are so many real enemies out there, why in the hell is Karl wasting so much time attacking you?

    Just a few points:

    I think it’s possible that in some of the cases where the CEO’s didn’t want the money, it might have been not so much a belief that they didn’t need it, but a realization that, needed or not, accepting the money would open the floodgates for the government to take control of their bank.

    Also I’d like to point out that in the case of Wells Fargo, if you look at the facts, I think it’s obvious they didn’t need fed bailout funds. WF was very healthy around the time of TARP and had avoided most of the subprime mess. In fact, if I remember correctly, they resisted to the point that certain special interest groups sued them to try and force them to make more subprime/risky loans. Thankfully, WF didn’t cave in and won the case. You could probably argue about the others, but I think WF’s statement that they didn’t need TARP cash is not particularly open to any real objection.

    Comment by zf — October 18, 2011 @ 10:43 pm

  3. Karl is an idiot and hypocrite.

    In the whole bull market from 2009 march, he was long only on YRCW and RIMM.

    After bleating about invaluable FRNS, when dx was at 73 recently he put 60 target on it.

    visit karldenninger.com

    Fade karl denninger.

    Comment by coat — October 20, 2011 @ 3:10 pm

  4. I dont think you understand exponents Tom

    Comment by Tony — October 20, 2011 @ 6:32 pm

  5. That’s the best you can do? And what “power” of intuition makes you think that?

    Comment by TBlumer — October 20, 2011 @ 6:53 pm

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