The Wall Street Journal asks the question (subscription required) "Is the government charging too little for the remains of failed mortgage lender IndyMac?"The FDIC sold the corpse of IndyMac to a consortium of hedge funds run by a slew of highly-respected investors. The deal even includes a loss-sharing agreement.
The specifics of the deal are admittedly far beyond my understanding, but here's my questions: The Treasury has spent hundreds of millions of dollars buying "bad assets" from various banks -- why didn't these brilliant hedge fund managers go and outbid the Treasury for those assets instead of buying IndyMac from the FDIC?
Presumably, they think this represents a better opportunity. Our federal government is currently buying assets that private investors don't want while selling them stuff that they do. And who gets to decide what to sell and what to buy? Not the federal government!
Something tells me the taxpayer will be the one who gets screwed. But that's nothing new.
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Reader Comments (Page 1 of 1)
1-05-2009 @ 10:08PM
VC said...
Will the cash depositors get any, if not all of their money back?
1-05-2009 @ 12:43PM
Bob Moore said...
How would you expect the Feds to do any better this time around. The RTC made about every mistake possible by selling good assets too cheap and keeping the junk too long.