The Vanguard mutual fund company has an interview with the economics editor of the Wall Street Journal, David Wessel, about his book Red Ink. The interview includes this passage:
During the financial crisis, when the federal government essentially nationalized Freddie Mac and Fannie Mae, Treasury Secretary Hank Paulson essentially wiped out the shareholders and preferred shareholders of Fannie and Freddie. The shareholders were a lot of different kinds of investors; many of the preferred shareholders were U.S. banks. He didn't take a nickel from the bond holders of Fannie and Freddie, and in part that was because so many of them were the Chinese.
The University of Chicago news office has an update on what Mr. Paulson has been up to since leaving office: "Students say they are impressed with his willingness to answer any questions and with his passion for U.S.-China relations."
The web site of Mr. Paulson's Paulson Institute is also worth a look; its home page features calligraphy by the vice premier of China, and there is a letter from Mr. Paulson explaining that "The initial focus of the Institute is the United States and China—the world's two largest economies, energy consumers, and carbon emitters."
There were certainly plenty of influential non-Chinese Fannie bondholders, including Pimco's Bill Gross. Some of this ground is covered in Mr. Paulson's own book, which was reviewed here when it came out. It all seems like it happened a long time ago. It's nice to see Vanguard and Mr. Wessel giving this version of the narrative some attention, because a lot of Americans, even politicians, aren't particularly familiar with this story.
