Presidential candidate John McCain was speaking in Scranton PA yesterday and the subject of the so-called bailout came up. I've said before and I'll say again that nobody is getting bailed out - companies are getting sold or going out of business. The government is doing its best to keep it orderly.
According to Bloomberg News, McCain insisted that under his watch, no Wall Street firm would profit from the plan or the workout. That's just stupid. The Fed or the vehicle that they create is going start buying up distressed debt in order to get the credit markets moving again. Wouldn't the like help in doing so? If the Fed bids 30 cents on the dollar for some bad mortgages, and Goldman steps in and bids 35 cents because they think they can make money, that is the best possible outcome.
Away from that, the Federal Reserve yesterday loosened rules making it easier for Private Equity firms and other financial buyers to take stakes in banks without themselves becoming bank holding companies. I guess they didn't run this one by McCain.
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