Figuring out what is true or false in today's media is not an easy task. This article in Bloomberg is an example. The article is based on the word of one person who was at a meeting in the summer of 2008. Another attendee was Henry Paulson, Secretary of the Treasury.
At a press conference days before this meeting, Paulson had stated that Fannie Mae and Freddie Mac would not be taken over by the government, they would remain shareholder-owned. He repeated this message in a Senate hearing a few days later. However, at the meeting referenced by Bloomberg, Paulson told a different story: Fannie Mae and Freddie Mac were going to get whacked, they would be taken over by the government.
The fact that Paulson changed his mind (if he actually did) is not the issue here. The issue is that the meeting at which Paulson told his story was a meeting with fund managers and others in the financial world.
If the article is truthful, did Paulson commit a crime? Attorneys quoted in the article say 'no'. Did the audience act on the inside information? Bloomberg could find no evidence that they had. So, what is the real story?
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