Washington Out Of Control
I told myself I wasn’t going to post anymore on the financial crisis and then I saw this article in the FT about how on Friday (12/19) the Federal Reserve announced a new program of lending capital to any US company investing in securitized consumer loans. It’s a $200 billion program. This just burns me up.
Translation: the US government just bailed out the hedge fund industry to the tune of $200 billion! Were there any strings attached to the money like reducing the 1-and-20 hedge fund GP compensation agreements? Nope! Any other concessions? Nope! So all these hedge funds are going to get bailed out right before year-end which will allow them to book profits (or less losses) and the managers get paid more. Thank you Uncle Sam!
Makes that $15 billion auto bailout seem cheap (and with favorable concessions) in comparison. I think it’s time the government stopped picking winners and losers because it’s clear it’s being done based on lobbying dollars spent and not for any rational reasons.
Either let companies fail or publish a set of rules for which companies get government support and why.