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Jan. 29 (Bloomberg) -- Russia urged China to dump its
Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a
bailout of the largest U.S. mortgage-finance companies, former
Treasury Secretary Henry Paulson said.
Paulson learned of the “disruptive scheme” while
attending the Beijing Summer Olympics, according to his
memoir, “On The Brink.”
The Russians made a “top-level approach” to the Chinese
“that together they might sell big chunks of their GSE holdings
to force the U.S. to use its emergency authorities to prop up
these companies,” Paulson said, referring to the acronym for
government sponsored entities. The Chinese declined, he said.
Russia’s five-day war with U.S. ally Georgia started on
Aug. 8, the same day as the opening ceremonies of the Beijing
Games. Prime Minister Vladimir Putin told U.S. President George
W. Bush during those ceremonies that “war has started,”
according to Dmitry Peskov, Putin’s spokesman.[Full story]
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