Former SEC chief: Paulson to stay in new administration
PETER'S NEW YORK--October 24, 2008--Former Securities and Exchange
Commission chairman and consummate financial insider Arthur Levitt
predicted today that a new presidential administration would retain Henry
Paulson as treasury secretary to ease the nation through the current
financial crisis. He also said U.S. markets would likely remain open
even in the midst of market closures worldwide. And an analyst
predicted a further dip in oil prices that could be felt at the pump.
"Paulson will stay for a while," Levitt said in an interview aired on
early morning programming on the Bloomberg cable news network. "He
will stick around for a while, clearly until a new administration takes
The Administration of President George W. Bush will end in January,
when a new president will take office. The primary contenders in the
upcoming presidential elections are Republican Senator John McCain and
Democratic Senator Barak Obama, with a handful of third party
candidates also vying for the spot. The ability of either of the
two front runners to smooth the transition from one administration to
the next in the present chaos of the financial markets has been a
matter of speculation. In the meantime, stocks constituting the
Dow average have lost some 40 percent of their value since late last
year, with the steepest declines occurring earlier this month.
"I'd make no precipitous changes now," Levitt stated, arguing that
the current slate of Treasury officials has the information and plans to carry the nation
through the current economic crisis.
Levitt predicted that financial markets worldwide would call
a halt to trading in chaotic markets, but that U.S. markets
would remain open. "We're going to see markets all over the world
close," he said. "It is very unlikely that U.S. markets will close."
"The right message is to keep going and to stay with it," he added.
Levitt left open a role for Congress in resolving the nation's
economic problems. "I think we are going to have Congress in continual
emergency session," he said.
Earlier in the day, futures markets were limit down, meaning that
trading was halted due to a precipitous decline in pre-market
trading. At the U.S. opening, markets fell, with the Dow Jones
Industrial Average down about 350 by midmorning. Bloomberg commentators
had implied the possibility of a more serious correction, but
their predictions did not materialize.
Levitt was SEC chairman from 1993 to 2001. Before his tenure at the
SEC, he served as Chairman of the New York City Economic Development
Corporation, and from 1978 to 1989 was chairman of the New York Stock
Exchange, according to a biography on the SEC website. He is currently
an adviser to the Carlyle Group. These connections brand him as a
consummate insider in financial circles.
In other economic news, oil continued to decline and could persist in
its downward path, one expert said. Oil fell today to between $61 and
$63 a barrel on world markets, from
highs of $147 only months ago. But industry analyst Adam Sleminski, in
an interview on Bloomberg, said
the price could fall to "somewhere near $50," which he said was the
cost of drawing a barrel of oil out of the ground. Although the
Organization of Petroleum Exporting Countries has
signaled its intention to curtail production, Sleminski implied that
serious reductions in output would not occur until prices approached
the cost of production.
In the meantime consumers are enjoying gasoline prices that they have
not seen for a while, recently dipping below the $3 a gallon at the
pump, a level first exceeded during
the price spikes in the aftermath of Hurricane Katrina in 2006, but
became commonplace for much of 2008. During the latest period of high
gas prices, the Bush administration continued to fill the nation's
strategic petroleum reserve, only halting purchases after the passage
of congressional legislation requiring it.
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