According to this week’s NY Times, many banks are not using the treasury’s bailout money to lend to consumers. Instead, they are sitting on the funds, using them to buy or merge with other banks. Now, unless I am much mistaken, Wall Street investment houses are a primary beneficiary of these types of deals. They profit from brokering buyouts and mergers.
I think its interesting that Treasury Secretary Paulson is a former investment banker – e.g he is a mergers and acquisitions guy. Its seems ultimately that when you choose a treasury secretary who is Wall Street focused, the logical outcome of his policies is a disproportionate benefit for Wall Street.
Its kind of sad really. The economy is the pits and the bailout funds just make big bankers richer.
Best,
James
