Here's a scary bit of news: the Federal Reserve Bank of New York has hired (subscription required) Michael Alix as a senior vice president in the Bank Supervision Group. His qualification? He was Bear's chief risk officer from 2006 until 2008 when the firm imploded -- due to too much risk. That disaster led to a taxpayer funded emergency sale to JPMorgan Chase (NYSE: JPM).But I guess it makes sense in a way. If you want to understand the dangers of excessive risk and leverage, who better to help than the guy who helped blow up one of America's most respected financial institutions. It's kind of like hiring Amy Winehouse to teach kids about the dangers of cocaine.
I wonder how much he'll be paid. Given how much money he's already cost the financial system and taxpayers, he should be working for free. But I somehow doubt that he is.
Economist Paul Kasriel had a good line in The Wall Street Journal: "The Fed is not only the lender of last resort, it's also the employer of last resort."
Maybe so. But at this point, Mr. Alix would probably be better suited to a job scrubbing the fry-o-lator at a fast food restaurant.
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