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Wall Street Breakfast: Must-Know News

So, the top TARP cop thinks that the private-public partnership scheme for dealing with the toxic assets is inherently vulnerable to fraud, abuse, conflicts of interest, and money laundering. There was a time when America's fortunes were made by building a railroad, inventing a lightbulb, or perfecting a computer operating system. Now there is a reason for the millions of campaign contributions by the financial industry - most of it cynically to the politicians that will give them personally beneficial decisions.

Wall Street Breakfast: Must-Know News

It is amazing that so much of the financial health of the western world hinges on the performance of these public / private entities Fannie and Freddie. I was once a stockholder (liked the dividend), but sold when it became apparent to me a few years ago that I did not understand who the management worked for. If they are a cornerstone of the economy, the performance of their management needs to be judged by a standard of security, not growth of EPS, which drove them away from their government mission toward chasing the returns of sub-prime loans. Then the government wanted them to broaden the size of loans that they would handle. Despite hating a larger role for government, I have reluctantly come to the conclusion that they neeed to be publicly owned and directed. Ugh. I can't believe that I said that.