Wall Street to Congress: Bailout? No, Thank You
In what can rightfully called the most ironic news in two or three weeks time, Wall Street executives have indicated they may choose to opt out of the bailout plan U.S. Congress approved on Friday of last week.
“There is a growing feeling that banks … might instead decide to tough it out,” said Thomas Caldwell, chairman and CEO of Caldwell Financial, a $1bn-plus fund manager.
The main reason quite some banks may decide to say ‘er, no thank you’ is that Congress loaded the original plan with so many regulations and rules that banks believe they will be too severely limited if they go ahead and play ball. “I think this hodge-podge of regulations and rules will be enough to put many [chief executives] off participating,” Caldwell said.
Additionally, sources close to Merril Lynch and Goldman Sachs said the two banks are unlikely to participate in the bailout because they believe ‘the market may be bottoming out.’
Lastly, analysts ‘believe that the mere presence of the government as buyer of last resort will be enough to get credit markets moving again.’ As such ‘a large number of banks would not need to take part for the legislation to succeed.’
Tough it out? How can that be? I’m confused, It’s either they need it (and worry about the details later like we have been told over and over again by the experts) or they don’t need it right?