On top of it, the bailout is a fascinating story. Not so much a whodunit as a who's-doing-it. This mystery is unfolding right in front of us, and the size of the victim pool could very well depend on whether we unravel the mystery in flashback or while it's still in progress.
Like most good mysteries, this one has a huge cast of characters -- like the Dickensianly named Neel Kashkari, the young Goldman banker put in charge of the bailout at the Treasury Department, the sharp-tongued Barney Frank, and the earnest and increasingly bewildered Hank Paulson, who started off the bailout process by romantically getting down on one knee in front of Nancy Pelosi and proposing to make the whole thing official.
But what we know is clearly dwarfed by what we don't know, because at every point in this story, the government has chosen to draw the curtains.
Just last week, four firms -- Goldman, Blackrock, Wellington and PIMCO -- were selected to manage the $500 billion account of mortgage-backed securities for the Fed. But how they were selected, what they're getting paid, and what they plan on doing with the money is all under wraps. "The selection of these managers seems incredibly opaque," Jeffrey Gundlach, an expert in mortgage-backed securities, told TPMmuckraker.
The head of one of the firms, Bill Gross of PIMCO, assured CNBC last month that "PIMCO would be the leader here in suggesting to the Treasury that we would work for no fee." So is Gross holding to his no fee pledge? We don't know - and the government isn't in any rush to tell us.
As a GAO report last month dryly concluded: "The rapid pace of implementation and evolving nature of the program have hampered efforts to put a comprehensive system of internal control in place. Until such a system is fully developed and implemented, there is heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be achieved in an efficient and effective manner." In other words, the money is flying out the door but no one is watching where it's going.
Friday, January 09, 2009
It's funny that I knew both Ann Coulter and Arianna Huffington...Yin and Yang commentators. Here's Arianna's latest: