Subprimes, overconfidence Follow

Sheila Bair never expected to find herself in the middle of the subprime mortgage mess. Bair has spent most of her career in Washington, where she's built a solid reputation as a financial regulator, most recently as assistant secretary for financial institutions at the Treasury Department. And she had been nervous about subprime mortgages years before it was on the radar screen of other regulators. (...) That describes Bair to a T. She took office in June 2006. Fast-forward to last week, when, with great fanfare, the White House announced a plan that encourages lenders to give across-the-board breaks to a certain category of subprime borrowers who are in danger of losing their homes. The lead dog in unveiling the complicated plan was Treasury Secretary Henry Paulson Jr. It was under his auspices that all the various mortgage constituents - loan originators, holders of mortgage-backed securities, servicers, and representatives of the borrowers - met and agreed on the plan. And he was the one who announced it to the media. Today in Business Boom times in the rural Midwestern U.S. Google gets ready to rumble with Microsoft Chasm widens between rich and poor in U.S. Paulson is also the one being praised by those who are happy to see the Bush administration finally doing something about the subprime crisis - and criticized by both Democrats who says it does too little, and conservatives and Wall Street types who believe that the federal government should stay out of it entirely and let the parties take their lumps, no matter what the consequences. And yet the person who spurred the government to action, and came up with the core idea at the heart of the government's plan, was not Paulson. It was Sheila Bair.