Tuesday, March 24, 2009

Big Money Boys Gather at WSJ's Future of Finance Initiative

Robert Wenzel of Economic Policy Journal reported from inside the Wall Street Journal's gathering of financial giants. Two of his observations stuck out.

Did Treasury Chief Geithner think banks would be willing to sell assets that weren't completely marked down?

Geithner danced around the question, but on further probing signalled that Treasury was willing to pump more money into any bank needing further capital--including if it is a result of liquidating assets via the Treasury plan. I took this to me that Treasury is protecting all major banks currently standing, from failure.

So the FDIC and Treasury could pressure banks to sell toxic assets to public-private partnerships on the cheap, with a promise to make up resulting capital shortfalls. That might get Carlyle's David Rubenstein the 20% rate of return his private equity underwriter (PEU) requires.

From Geithner's comments, more regulation of the financial sector coming.

You would think the people in the room (Rubenstein, Soros, Rubin, Levitt, Summers, Volcker, Schwarzman, Whitney, Altman, Binder) will have major input on what the regulations will look like. Geithner also mentioned the upcoming G-20 meetings and the fact that any changes in regulation will have to be global in nature. My thought, the One World financial plan is near.

It seems the lowest global common denominator goes beyond taxes and worker pay/benefits. Regulation is now included. Should this happen, the United States is controlled by global corporatists. The implied threat is big money boys will pack up their capital and flee to less taxed, lower paying, less regulated zones. Might they grab billions in American taxpayer provided capital and bolt?

In all the new talk about regulation, I've yet to hear private equity underwriters (PEU's) or sovereign wealth funds (SWF's) included. Did Tim speak to that? Senator Evan Bayh was present to watch the backs of PEU's & SWF's.