Yesterday the Federal Bureau of Investigation, the FBI admitted it was taking a look at the four major financial institutions that fired off the financial flameout on Wall Street. Fannie Mae, Freddie Mac, Lehman Brothers Holdings and American International Group (AIG) are all being exposed to the cold steely glint of the G-Men. Last week FBI Director Robert Mueller put the number of large financial institutions under investigation at twenty-four.
There are two ways to look at this: One is cynical, the other is hopeful.
Wearing the Cynical Hat: The pat response from anyone on Wall Street has to be : “We cannot comment as there is an ongoing investigation.” This would be the answer to questions like “What time is it?” and “Where is a mailbox when you need one?” as well as any questions from the Senate Banking Committee, the SEC or any reporter dumb enough to question the Masters of the Universe.
The Senate Banking Committee gets to give Czar Henry the FrankenFinancier most of what he wants, including secrecy, while backing away before the shit mist of outrage starts. After all, “We cannot comment as there is an ongoing investigation.” It is an election year. The Bailout The Base proceeds with a reasonable payday for the Masters of the Universe.
Eventually, two clerks, a broker and three night-shift cleaners are charged and convicted. The clerks are fired, but get parole. The broker gets a stern letter appended to his employment file. The three night-shift cleaners get a hard 20 in the SuperMax in Denver.
The Masters of the Universe build their own island in Caribbean with favourable tax, business, incorporation and social laws that include owning human souls as an inalienable right. Delaware is turned into a workhouse/prison camp for those who can’t pay their mortgage, rent, car loan, or credit cards. The IRS, outsourced to Kellogg Brown and Root, trains the Mafia to recover money from all the citizens left outside of Delaware.
Wearing the Hopeful Hat: The Senate Banking Committee grows a set and slaps a set of executive compensation hooks into Czar Henry the FrankenFinancier’s Bailout The Base campaign. One of the hooks is the US Government gets 49% ownership of the investment banks who want to use the de-vestment toilet. The SBC says, in writing, they’ll sell off their 49% in two years.
Czar Henry decides that he can’t deliver the Bailout The Base payday and resigns in a huff. Paulson goes to sit on a sofa with Donnie Rumsfeld, drinking Diet Dr. Pepper cut with grain alcohol, while waiting for his duck hunting invitation from Shotgun Dick Cheney at the Undisclosed Location.
Several dozen senior level finance executives, including some CEO’s of big name companies are investigated and eventually convicted of title 5, Section 999 of the USC. This would be “Being a Greed Head and an Asshole” without a permit from the government. Christopher Cox, head of the SEC gets to be the ball-gagged and harnessed pony-boy of Michael Moore for six months, then turned over to Brittney Spears for another six months. Ben Bernanke is sold for $1.75 a pound to Prince Bandar as a lotion swabber.
Eventually the US Government sells off their 49% ownership of the finance industry and turns a tidy profit. Nothing crazy, but a break-even kind of $650 Billion that the investment banks had to pay back, with a nominal interest rate.
Then, life goes on. The economy runs reasonably well, some folks make a buck, while others eventually dig out from under and break even. The last airline left in the US (AmeriUniUSNorthSouthWestDeltaConti) begins to operate again, having been bought out by Amtrak and Proctor and Gamble under the Lifesavers brand.
The grass grows, the sun shines and things move forward.
RoadDave 