Daily Archives: September 22, 2008

John Gapper

It is extremely rare for my prophecies to come true within a week, so I am gratified that Goldman Sachs and Morgan Stanley have come round to my point of view and thrown in the towel as independent investment banks.

Instead, they are turning into bank holding companies, regulated by the Federal Reserve, which puts them on a par with commercial banks and provides an even bigger backstop from the Fed. 

John Gapper

I have a piece in New York magazine this week on the credit crisis and the city. You can read it here.

John Gapper

I am glad that Hank Paulson, who wants to raise a $700bn US government fund to buy distressed mortgage securities in an effort to restore confidence to financial markets, is an old Wall Street hand.

In a world where Sarah Palin, the US Republican vice-presidential nominee, claims expertise about Russia because it can been seen from her home state of Alaska, it is reassuring to have a US Treasury secretary with actual experience.

It is definitely more comforting to have Mr Paulson in the hot-seat than John Snow or Paul O’Neill, his predecessors.

That said, Mr Paulson’s background as the former chairman and chief executive of Goldman Sachs, does raise questions.