Of Plans and Power

So what do you thing about the rescue plan?

That’s a question I must hear a dozen times a day. And I tell people: I don’t see a credible alternative, but I’m deeply troubled by the new power of the U.S. Treasury.

Think about it. One man has the authority to invest money greater than most countries’ economies. He can also tell the banks he supports whether they can pay dividends to their investors, whether their CEOs are entitled to a bonus, and whether they should expand their lending or pull it back.

Yes, he’s subject to political review, but that seems a formality. Fannie and Freddie had a government guarantee, and that didn’t work out so well. Now the much of the banking sector gets to join the same club.

Lord Acton once said that absolute power corrupts absolutely. The power now vested in the Secretary of the Treasury is immense. Maybe Paulson will prove to be the exception to Acton’s rule. I certainly hope so.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2017-07-17T12:35:24+00:00 October 20th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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