♠ Posted by Emmanuel in Credit Crisis,Russia
at 1/29/2010 05:50:00 PM
Former US Treasury Secretary Henry Paulson (AKA The Great Paulsonio in these parts) is coming out with an autobiography called On the Brink. An interesting claim he makes according to the FT is that, to punish the United States for its support of Georgia during the latter's conflict with Russia over breakaway territories, Russia tried to involve China in a large sell-off of Fannie Mae and Freddie Mac securities:Russia proposed to China that the two nations should sell Fannie Mae and Freddie Mac bonds in 2008 to force the US government to bail out the giant mortgage-finance companies, former US Treasury secretary Hank Paulson has claimed...I obviously can't tell if this allegation is true. However, I can say that (1) having problems with territories keen on breaking away itself, China would not cheerfully aid someone else fomenting secession in someone else's backyard; and (2) given that these government-sponsored enterprises were already in trouble anyway, it is doubtful if Russia and the PRC could have distracted America that much.
Mr Paulson said that he was told about the Russian plan when he was in Beijing for the Olympics in August 2008. Russia had gone to war with Georgia, a US ally, on August 8. “Russian officials had made a top-level approach to the Chinese, suggesting that together they might sell big chunks of their GSE holdings to force the US to use its emergency authorities to prop up these companies,” he said...“The Chinese had declined to go along with the disruptive scheme, but the report was deeply troubling,” he said. A senior Russian official told the Financial Times that he could not comment on the allegation.
Are the Russians really this spiteful? All I can think of is "polonium."
