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Published:October 17th, 2008 17:16 EST
The Coolest Investment Banker in America

The Coolest Investment Banker in America

By Joel G. Block (Mentor/Columnist)

Imagine being an investment banker who is given the full force of credit of the federal government, along with $700 billion to spend aggressively with a mandate to go out and buy assets at will.

Well, that`s exactly the job U.S. Treasury Secretary Henry Paulson has. Our treasury secretary is a former Wall Street investment banker serving as Chairman and CEO of Goldman Sachs. He`s in the enviable position of being able to wheel and deal with every financial institution, along with many other companies, as a result of the country`s financial crisis. He was behind the deal that was just struck with AIG to purchase nearly 80% of the company for a loan of $85B. Hundreds of billions of dollars more have been allocated to save other troubled financial institutions by pumping funds into those entities.

He knows a few things about making money and I would say that there is an excellent chance that he will turn these lemons into lemonade " making billions for the American taxpayers. This is one of the biggest opportunities that the United States government has ever had to make windfall profits.

I`m not a believer that the federal government, or any government agency for that matter, should be investing taxpayer dollars as equity into private enterprise. However, because these private companies have made errors and mistakes that demonstrate pitiful judgment, I do believe federal dollars should be infused on an equity basis so that the taxpayers can not only recoup the funds, but earn a profit as well.

Every one of the deals that Henry Paulson is doing is almost guaranteed to yield a profit to the American taxpayer. Take a look at the AIG deal. I can`t reveal the numbers that have been shared with me by a source close to the company, but upon liquidation, the various operating entities that company owns will yield significantly more than the $85 billion loan made available by the feds. The American taxpayers are going to keep almost 80% of the surplus " so we might make a couple hundred billion dollars. Not bad for a loan of $85 billion and just a little bit of time.

Leave it to the investment bankers to manufacture money. That is what they do best.

A similar deal will transpire with other financial institutions as the government also invests money into these entities. What taxpayers are mad about now may well turn out to be a significant premium.

Keep your eyes on Henry Paulson. There aren`t many guys sharper than him.

About Joel G. Block, President of Growth-Logic, Inc.
Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker and advisor. To bring Joel into your company, please visit or  Also, be sure to check out our newest project: a blog to organize the blogs that cover entrepreneurship -  And finally, for film makers:  - our newest project.