In August 2009, John Mack, at the time still the CEO of Morgan Stanley, made an interesting life decision. Despite the fact that he was earning the comparatively low salary of just $800,000, and had refused to give himself a bonus in the midst of the financial crisis, Mack decided to buy himself a gorgeous piece of property â a 107-year-old limestone carriage house on the Upper BeerEast Side of New York, complete with an indoor 12-car garage, that had just been sold by the prestigious Mellon family for $13.5 million. Either Mack had plenty of cash on hand to close the deal, or he got some help from his wife, Christy, who apparently bought the house with him. The Macks make for an interesting couple. John, a Lebanese-American nicknamed âMack the Knifeâ for his legendary passion for firing people, has one of the most recognizable faces on Wall Street, physically resembling a crumpled, half-burned baked potato with a pair of overturned furry horseshoes for eyebrows. Christy is thin, blond and rich â a sort of still-awake Sunny von Bulow with hobbies. Her major philanthropic passion is endowments for alternative medicine, and she has attained the level of master at Reiki, the Japanese practice of âpalm healing.â The only other notable fact on her public résumé is that her sister was married to Charlie Rose. Itâs hard to imagine a pair of people you would less want to hand a giant welfare check to â yet thatâs exactly what the Fed did. Just two months before the Macks bought their fancy carriage house in Manhattan, Christy and her pal Susan launched their investment initiative called Waterfall TALF. Neither seems to have any experience whatsoever in finance, beyond Susanâs penchant for dabbling in thoroughbred racehorses. But with an upfront investment of $15 million, they quickly received $220 million in cash from the Fed, most of which they used to purchase student loans and commercial mortgages. The loans were set up so that Christy and Susan would keep 100 percent of any gains on the deals, while the Fed and the Treasury (read: the taxpayer) would eat 90 percent of the losses. Given out as part of a bailout program ostensibly designed to help ordinary people by kick-starting consumer lending, the deals were a classic heads-I-win, tails-you-lose investment http://www.philstockworld.com/2011/...y-to-the-wives-of-two-morgan-stanley-bigwigs/
Is the Fed full of criminals, or are the people that abused the bailouts the criminals? I'm going to play devil's advocate again and consider the Fed made a panic move and a rushed move, and obviously there were huge flaws in the execution. I'm all in favor of reviewing cases like this and considering fines and jail time where appropriate. I'm of the opinion that the bank bailouts were the right thing to do, but the execution, and the terms....those are the areas to criticize. We also need to criticize and address the fact that those institutions that were 'too big to fail' are now even bigger, and likely that much more emboldened to take risks.
how did i know you would show up to defend the fed here? is your name brian sack? do you even read the details of articles like these? is the fed "full" of criminals? doubtful. but those in charge certainly are, and have been architects of the greatest transfer of wealth from middle and lower class to the rich ever concocted. from the destruction of the dollar to the inflation of asset bubbles, the housing market, giving foreign banks us tax payer funds, monetizing the debt (after saying they would never, ever do that), creating moral hazards, claiming there is no inflation, manipulating markets, bloating their balance sheet, and then hiding all of it in secrecy...the institution is a perverse, corrupt, broken gang of thieves. maybe not all the people that work there, but those who make the decisions.
That's a clever write up, but what does it tell us about the details of this transaction we would need to know to pass judgment on it? What is in the fine print?
Bernanke is just as culpable as Mack. Both should be serving hard time. Mack will be forced to step-down and I imagine Cuomo will be all over this, although I doubt he has jurisdiction.
why? simple. because nobody will protest. no one will destroy fed buildings or kill fed people. so the fed will continue to party like its 19 69 !
Bingo. While I don't agree with killing people. I do agree with you. I have no idea why people aren't in the streets waving signs, burning tires etc. People in the US have been sold down the river. If someone jams a gun in your ribs you're supposed to complain (after the robbery of course, not during). Where's the passion? Where's the fight to protect something you hold dear? People will take advantage of you as long as you let them. So why keep letting them? <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3151905>