Saturday, November 21, 2009

Xmas came early to Wall Street

..."Earlier this week, the inspector general for the Troubled Asset Relief Program, a k a, the bank bailout fund, released his report on the 2008 rescue of the American International Group, the insurer. The gist of the report is that government officials made no serious attempt to extract concessions from bankers, even though these bankers received huge benefits from the rescue. And more than money was lost. By making what was in effect a multibillion-dollar gift to Wall Street, policy makers undermined their own credibility — and put the broader economy at risk.

...So here’s the real tragedy of the botched bailout: Government officials, perhaps influenced by spending too much time with bankers, forgot that if you want to govern effectively you have retain the trust of the people. And by treating the financial industry — which got us into this mess in the first place — with kid gloves, they have squandered that trust".... Paul Krugman

To be fair, the great giveaway started with Hank Paulson, who not only spent "too much with bankers" was one himself at Goldman Sachs. Second, while Geithner was not himself a Wall Street banker, his education, his social background, his world outlook were all shaped by the same "core values" and world outlook of the elite bankers. Effectively the Wall Street titans were shaping the rescue package. And that, of course, would not have a clause to hurt their own self interest, let alone their job security.

Ultimately, let's put the blame where it belongs. It is Obama who listened to and signed off on whatever Summers and Geithner proposed.

The official government report is here.

Money has been spent. I said earlier this year that Wall Street Had Won big, like 7-0 in soccer terms. In American football terms, it would like 70-0.

No wonder Mr Lloyd Blankfein is smiling telling the world he is doing "God's work". If he were representing God, and he had in fact won big, what makes the US Government and through them you and me? We are just shits?

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