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Response to nc4bo (Reply #5)

Tue Aug 14, 2012, 05:13 PM

8. Remember those housewives of Wall Street using TARP money?

I imagine it would be like this, except more toward hyperdrive for the connected crony crowd in Congresss.



Why is the Federal Reserve forking over 220 million in bailout money to the wives of two Morgan Stanley bigwigs?

EXCERPT...

It's hard to imagine a pair of people you would less want to hand a giant welfare check to yet that's 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 Susan's 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.



PS: Sorry, nc4bo. Would've posted the item below in response to yours had I known you were going to post.

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