If you wish to read a roller coaster of a book, On the Brink by Henry Paulson, Business Plus, New York 2010 is an excellent read. The are many books about the financial crisis, the most common view is from the people at companies that were at the top of the hill and never thought their firm would lose money or never thought they would not be very well paid. There are a few books about people who were able to profit from the collapse of the global financial systems. An equalling important book is about the regulators. Henry Paulson was the Secretary of the Treasury in the United States, he brought a wealth of experience from Wall Street to the government and was the best person to be in the job at the time. At any time of crisis, you want experienced people whose aims are for the good of everyone. In Mr. Paulson’s case he was a former CEO of a financial services firm which means he knew the other CEOs in the industry and had a reasonable analysis of their values and their companies. The Treasury Secretary by its nature is usually a low key but important position for it has few powers outside of the ones the President gives. At the time of the crisis, Mr. Paulson had to answer to many different people including the President, the House, Congress, other regulators, the industry, the general public as well as to try to solve the problems all in a very short period of time. Most of the industry players believed government should help, but only have a small role at best. The consequences of the credit crisis lead to an expansion of the government’s role (else there would be fewer financial institutions) and it has taken 4 years for the housing market to make a comeback. The book reads as a very stress fill time with Mr. Paulson managing 95% plus of the time to keep all informed and finding ways to bring credit back in the economy and through TARP and other features.

Linking to dividend paying stocks, credit runs the economy. When you have credit you can make choices on how to spend or not spend, when the financial institutions run out of credit no one gets credit. The book On the Brink demonstrates how close it was and how some politicians do not really understand the economy, but they understand votes and that is why they get elected. The book also demonstrates when in crisis, the first call the government regulators is the company CEOs. In dividend producing companies, the CEO has gone through the experiences of running the divisions or has experiences which helps decision making. In the credit crisis of 2008, all companies were affected, what was good suddenly was no good. Hopefully, the next crisis will be much less dramatic than the last one, but experience at the top certainly helped find solutions.

There are more questions than answers, till the next time – to raising questions.