New Treasury Secretary

[jyl]

Treasury Secretary Snow has resigned and will be replaced by Henry Paulson, CEO of Goldman Sachs.

Paulson is no doubt an excellent choice for Treasury Secretary. He's a major financial heavyweight, harkening back to Robert Rubin.

Wonder what made him take the job? He makes $40MM/yr at Goldman. As Treasury Secretary, he'll have to divest or put his assets into blind trusts. He comes into the last two years of a very weak Administration, working for a President who hasn't appeared to value or heed prior economic advisors, and who lacks enough political capital to tackle anything major. Paulson would have been a leading candidate for Treasury Secretary in the next Administration.

Also, what does Paulson's decision say about Goldman's future? The capital markets banks have been blowing away the numbers, reporting stunning profit growth and returns. But investment banking is a cyclical business. A smart operator might time his exit for the peak. Paulson is among the smartest.

I suspect you're seeing the multi-year peak of the investment banking cycle. Anyone know a lot about the financials?