Lunch With Hank

April 20, 2007 — “I don’t see (subprime mortgage market troubles) imposing a serious problem. I think it’s going to be largely contained.” -Hank Paulson

It turns out Hammerin’ Hank had a cozy sit down with some hedge fund rain makers warning them of the potential implosion at Fannie and Freddie. Four of these rainmakers were ex Goldman $GS dudes. Now we will wait (maybe another committee investigation) to see if they acted on it, slammed bids and went mega short on the news. Paging Mary Shapiro, this is silly fun, but nothing will come of it.

The market popped yesterday in a big way. Healthy bull markets always gap up 300 points on anemic volume don’t they?

In other news, we now know that Corzine’s bet at MF Global ($MF) on Euro debt was about 11.5B. Quick tip for you wanna be hedge fund titans. Find Corzine’s number, hire him (if he doesn’t get jailed), convince him he’s awesome, put him on a “demo” trading screen (don’t tell him), then do the complete opposite. You will have hundreds of billions under management in no time.

Meanwhile the missing 200B “may” have been found at $JPM in London. In an effort to save costs on finding this money, forensic accountants were not hired, instead the team of Barnaby Jones and Matlock have been retained.

We saw nice reflex bounces yesterday in market leaders like $AAPL, $AMZN and $GOOG. Even the toxic brigade known as “The Financials” ($XLF) caught a bounce.

Things are moving quickly so stay safe.

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