Now that the economy is recovering not collapsing stabilizing, it behooves us to check in on those fringy areas that we had never thought about before last September 15th – in this case, the Hedge Funds. and Mortgage-Backed Securities. Recall, the Hedge Funds are those private investment groups that "hedge" their investments with a variety of cyryptic strategies. And they’re doing well. And the Mortgage-Backed Securities? They’re the virtual money based on people paying off their Mortgages that died in the Housing Bubble, insured by A.I.G. They seem to be trucking right along. Why, you ask – given the state of everything else? Damned if I know…
[…] The program has bogged down over questions such as whether to let banks that have gotten bailouts play this game [talk about double-dipping!], whether pay and perks of private investors would be capped, and whether it’s right to let Wall Street, which made fortunes while creating this mess, make additional fortunes cleaning it up… For many of us, the best investment we ever made was the one we never made, such as not bottom fishing for GM or Lehman common stock. For Uncle Sam, the best investment was not buying troubled assets on his own. And that’s the bottom line… All of this is slightly out of my grasp, but I get the gist of it. Instead of buying the not-so-valuable assets with the Tarp Money, we shored up the Banks by buying stock in them, thereby avoiding the impossibility of valuing the unvaluable assets [bad loans and their progeny]. Rush Limbaugh calls this Communism or Socialism. Sloan is calling it Smart Capitalism. I like the sound of that better. Maybe it’s the reason the Mortgage-Backed Securities haven’t tanked [see below]… […]