It just gets better and better. The FT reports today that Wall Street banks owned the lion's share of the sub-prime mortgage providers who spent $370m bribing (oops, I mean lobbying) the government to fight off regulation. Basically, for a mere $370m investment the Wall Street banks got back $700bn from the US taxpayers. Nice return on investment. Meanwhile, the chairman of the NY Federal Reserve, Stephen Friedman - who once ran Goldman Sachs - still sits on the board and owns a gigantic number of shares in the investment bank. The NY Times reports that Friedman bought a further 37,300 shares of Goldmans in December which have already risen by almost $2m.
Is it any wonder the nation is sceptical about Wall Street's good intentions? Now it seems the bank stress tests ordered by the Obama administration are finished, the results are in. But we still don't know what the results are. Why? Because the administration doesn't want any 'bad news' to spoil the recovery party. I feel sorry for the regulators, the power remains on the Street and there is nothing they can do about it.