Wall St. moves to make millions from efforts to clean up their mess
What's not included in all the coverage of the massive Wall St. bailout is the fact that many of those very same Wall St. execs and firms at the heart of the problem now stand to make millions from the taxpayer financed scheme to bail them out.
Kind of ironic, eh? They're essentially being rewarded for their utter greed and recklessness, at least the Bush administation proposal they attempted to ram through congress with warnings of dire and immediate economic castastrophe if congress didn't give them a $700 billion open-ended blank check with no oversight whatsoever.
It's not known if anyone is seeking to add provisions to prevent the same firms who screwed the pooch from making excessive profits from the very effort to bail them out.
Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.
Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.
At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.
Nobody wants to be left out of Treasury’s proposal to buy up bad assets of financial institutions.
“The definition of Financial Institution should be as broad as possible,” the Financial Services Roundtable, which represents big financial services companies, wrote in an e-mail message to members on Sunday.
The group said a wide variety of institutions as varied as mortgage lenders and insurance companies should be able to take advantage of the bailout, and that these companies should be able to sell off any investments linked to mortgages.
The scope of the bailout grew over the weekend. As recently as Saturday morning, the Bush administration’s proposal called for Treasury to buy residential or commercial mortgages and related securities. By that evening, the proposal was broadened to give Treasury discretion to buy “any other financial instrument.”