September 29, 2008

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.”

3 Comments:

At 9/29/2008 9:13 PM, Blogger Tacky said...

I sent the following to Congressman Jesse Jackson Jr. Iowa Cong.Bruce Braley, unlike Cong. Phil Hare also had the guts to vote NO.
Dear Congressman Jackson:

Many thanks for voting NO on the $750 billion welfare handout to the
corporations.

It is amazing that the media has not interviewed any of the corporate
heads and asked them what would they do if they did not get this free
money? Why don't they offer solutions of their own? Or do they rely on
their lobbyists to inform Congress of how bad life will be for the
average American without funds for the corporations?

The question is how does the "buy in" help the unemployed, the homeless
( including veterans), the families living in poverty and the uninsured?

When I took someone with low income to the local food pantry, she said
she hoped this "buy in" would help her also, and she hoped her vote in
November would also count.

 
At 10/03/2008 1:36 PM, Anonymous Anonymous said...

And how did your gutty congressman vote today on the $850 billon bailout? He voted yes at 12:15PM EDT. Guess Braily thought the bill needed $100 more to get his vote. Wall Street 1 trillion - people with homes in forclosure zero...

 
At 10/04/2008 6:08 AM, Blogger The Inside Dope said...

Anon 1:36
Thanks for your comment, but which "gutty congressman" are you referring to? I assume it's Braley?

Phil Hare also represents the IL side of the area, and he voted yes as well. (which I think was the only course of action considering the urgency of the matter.)

It looks ugly, and there were undoubtedly measures thrown in which benefit the wrong people, or which will prove unhelpful, and then there's the pork. But in D.C. that's the way business is done.

The thing to do is to vote in people who don't represent the old, hidebound ways of D.C. like McCain, and try to support efforts to change the attitude that prevails in D.C.

But you'll never get rid of the horse-trading aspect of congress. To expect that to change after over 200 years is unreasonable in my opinion.

TID also provides a handy guide to recent votes by our federal elected officials for the IL Quad Cities. It's located down towards the bottom in the sidebar on the right.

I'll try to add the Iowa federal elected officials to the list.

 

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