Paulson and the Long Shadow of Usury

http://www.futureofcapitalism.com/2010/04/paulson-and-the-long-shadow-of-usury

John Paulson seems to be engaging in the age-old tactic of those under scrutiny -- point at someone else to blame.

The Financial Times reports on a letter Mr. Paulson sent after the Securities and Exchange Commission filed civil fraud charges against Goldman Sachs for failing to disclose Mr. Paulson's role on the short side of a bet on the housing market to those on the long side of the bet. Mr. Paulson and his firm have not been charged but they have been the target of some negative press commentary.

"We believed that the two-year adjustable rate mortgages made to lower income borrowers with poor credit history, little or no documentation, no downpayment and rates that would shortly reset at usurious interest rates set the stage for significant delinquencies and foreclosures, thus eroding the value of these securities," the Paulson letter states.

Note the reference to "usurious interest rates." That's a religiously freighted reference. What it means is, "Hey, the real bad guys here were the lenders making these loans, not me for betting that homeowners would be foreclosed on."

by Ira Stoll  |  Apr 21, 2010 at 9:07 am Related Topics:  Banking, Goldman Sachs, John Paulson, Religion, SEC receive the latest by email: subscribe to the free futureofcapitalism.com mailing list