While oil is up, the markets are all down significantly and dropping as quiet, mild-mannered Hank Paulson gets his confirmation hearing for US Treasury Secretary. He was grilled by various Democratic and Republican senators. His answers were thoughtful and he admitted his lack of knowledge.

The most interesting thing one Senator said was that it to took 40-some presidents 220+ years to reach a $5 trln debt, but took the current pres 5 yrs to double that debt. Another senator said that, in the 80s, the US was one of the largest creditor nations. Now it is one of the largest debtor nations.

Paulson did say, in response to questions from (R) Senator Snowe that he thought it would be a mistake to raise taxes in a growing market. Oooh. Maybe he’s not all that innocent. Just looks that way. I mean, despite his deep religious convictions, he was CEO of Goldman-Sachs.

In fact, he may already have had puppet strings attached Republican Senator Bonney [sp?] repeatedly grilled him about China and he refused to budge in his answer: he’ll work with other members to learn what is [appropriate]. Then he said that it’s well-known how President Bush stands on certain matters, and that his job is to [uphold] the law. When was the last time a Treasury Secretary said something like that?

Given Paulson’s deflective answers, I’m not surprised that the market is down so much this morning.