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John Crudele: Just what does Paulson talk about when he calls Wall Street?

Section: Daily Dispatches

Paulson Is Still Clamming Up About the PPT

By John Crudele
New York Post
Thursday, August 30, 2007

Here's more from the interview that never happened -- my imaginary chat with Treasury Secretary Henry Paulson, who in real life refuses to discuss the Plunge Protection Team.

Paulson seems eager for everyone to know that the Team exists and that it is ready for action during a financial crisis.

But Paulson has been dodging the tough questions about the PPT and refusing to comply with Freedom of Information Act requests we've made.

So as the market continues to be exciting, let's see what Paulson could possibly say to defend himself.

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Me: Hello, again.

Paulson: Can we do this another time? I think George needs me.

Me: We'll be done pretty soon. Just sit there. Yesterday I showed where you admitted that "it's my job to talk regularly to market participants." That's a quote.

Paulson: Did I say that?

Me: Yes, you did. On CNBC. Like me, a reader of my column wants to know what you talk about. I'll read his e-mail: "For instance, the day before the discount rate was cut by the Federal Reserve, the stock market amazingly recovered from a steep decline."

Paulson: Can I answer?

Me: Behave and let me finish. The reader asks, "I have to wonder: Was someone's crystal ball really on the money, or did a few people receive reassuring phone calls?"

Paulson: (Stammers, but is mute.)

Me: So did someone call "market participants" on the afternoon of Aug. 16, when the Dow suddenly recovered 300 points in the last hour of trading?

Paulson: Now I don't want to answer.

Me: The Federal Reserve is part of the Plunge Protection Team, or -- as you like to call it -- The President's Working Group on Financial Markets. Right?

Paulson: As well as other people.

Me: My reader wants to know: Did you or someone in Treasury talk with the Fed and then have a chat with "market participants" that day?

Paulson: Ah, you're one of those conspiracy theory nuts, are you?

Me: How'd I know you were going to go there? Well, let's go through what you've already admitted. First, you admit that you speak "regularly" to "market participants" -- plural. You've never said what you talk about, but a reasonable person would have to assume that you discuss -- what else? -- the markets.

Paulson: This is very important for the little people of. ...

Me: Yeah, let me finish. The definition of a conspiracy is "joining or acting together, as if by sinister act." So what you are doing with these "market participants" -- plural -- is by definition a conspiracy. You've admitted it. You just won't tell us what you are conspiring about, right? But since the calls are secret, that's pretty sinister.

Paulson: Barbecues. We talk about barbecues.

Me: Right, you said that last time. Now let's discuss the stock market the other day. The Dow Jones industrials fell 280 points on Tuesday. Did you call market participants that day?

Paulson: Please let me go to the bathroom!

Me: Your former firm, Goldman Sachs, bought a lot of Standard & Poor's future contracts late Tuesday when the market was down. That was a rather heroic thing to do. Did you talk with Goldman's "market participants"?

Paulson: I'm gonna pee myself.

Me: And when the stock market rallied strongly yesterday morning, Goldman was the buyer of about 1,000 S&P contracts.

Paulson: Don't say that word.

Me: What word?

Paulson: Pee -- S&P.

Me: Did you talk with Goldman Sachs about the market? What was the conversation about? Everyone wants to know.

Paulson: Please, don't hurt me. Please let me go and see George now.

* * *

Note to readers: The invitation for an interview is still open even though I suspect Paulson will continue to decline.


John Crudele is business columnist for the New York Post.

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