Wall Street's Rainy Day

By Robert Weiss

President Barack Obama announced plans to launch a government task force for restructuring the struggling U.S. auto industry. President Obama will appoint Treasury Secretary Timothy Geithner as his "designee" for overseeing auto bailout loans and as co-head of the new high-level panel together with White House economic adviser Lawrence Summers. This may be a good start for much needed oversight but where is the oversight into the bank bailout loans? I only hear of news that the next half of the multi-billion dollar bailout to banks will be handed out with restrictions. Wall Street has needed a "nanny" for years and now is the time to implement one. Months after the first half of the billion dollar bailout, consumer credit is still frozen. Wall Street investment banks have not loosened up their hold on the money but instead look to be saving the money for a "rainy day." Their rainy day will ultimately be to fight investors tooth and nail when investors seek compensation for devastating losses to their pension funds and retirement accounts. Pension funds across America were hit hard due to sales of worthless CDOs, which were backed by mortgage securities. These CDOs were pushed on the pension funds by Wall Street investment bankers touting the investments as "investment grade" and safe securities. When the economy crashed, pension fund members lost their retirement and Wall Street received billions of dollars in handouts. When will Washington learn that their handouts to Wall Street will not result in a trickle down to Main Street? At least with the auto industry, assistance given to them may result in jobs to people who need jobs... assistance to Wall Street will lead to CEOs complaining about a $500K compensation cap. Where is the justice? [more...]