03-23-2009, 03:45 AM
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Confirmed User
Join Date: Mar 2008
Location: London, Saint-Tropez, Bermuda, Moscow
Posts: 5,289
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Quote:
Neville said...
Does anybody remember that the last people who brought in 3% equity partners to take control of an off-balance sheet hedge fund in a no-loss deal designed solely to absorb toxic assets at inflated prices, were sent to jail by the government for misleading the public? Their names were Andrew Fastow, Jeffrey Skilling and a raft of other managers, at Enron.
The goal of their off balance sheet partnerships was to conceal where and when the real losses had occurred and thus who was responsible for them, until some later date when they could either be transferred back onto the public (Enron's shareholders) in a way they would not notice, or at least after the Enron managers had a chance to unload their shares.
Now we have a virtually identical scheme, but this time it's being promoted jointly by the banks and the US Treasury. Once again the effort is to construct a vehicle into which toxic assets can be transferred at inflated prices, positioning the public to take the losses while disguising them in the short term, and giving the managers of our biggest banks a chance to both profit now and then sell out ahead of the public.
Perhaps Lay, Skilling and Fastow should be hailed as innovators in the field of public finance.
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http://www.nakedcapitalism.com/2009/... 4017976998602 |
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