Tuesday, July 22, 2008

"Wall Street Got Drunk" Says Bush

"It (the economy) is uncertain, there’s no question about it. Wall Street got drunk, it got drunk, (it’s one of the reasons I asked you to turn off your TV cameras.) It got drunk and now it’s got a hangover. The question is how long will it sober up, and not try to do all these fancy financial instruments."--President George W. Bush at a closed fundraiser

Does anyone else wonder, where were the financial cops while Wall Street drank and sold? In this case, Congress, the White House and financial regulators let big investment houses and private equity underwriters (PEU's) get stinking drunk packaging complex financial instruments as Triple A rated, also known as putting lipstick on a pig. Then the PEU boys raced to write down their investments. The Carlyle Group wrote Carlyle Capital Corporation down to bankruptcy.

Guess what Bush's answer is to this transgression? He wants the Federal Reserve Bank to allow similarly unregulated private equity underwriters and their partners, sovereign wealth funds (flush with your gas money), to save ailing banks. He wants to play corporate socialist, pumping up Freddie Mac and Fannie Mae after saving Bear Sterns. With all those federal billions in corporate welfare, the pressure grows on Social Security, Medicare and Medicaid.

Guess who continues innovating with PhD level complex financial instruments, doing so free from oversight? The same hungover Wall Street boys cited by the dry drunk in chief. I'm sure we all feel better. Greed obviously isn't good...