Why Are You Here?

Proof that our people at TEMASEK are doing their job, even though it was by a stroke of good fortune that bailed them out. They did have a safety net in place compared to the rest of the SWFs.

That's more or less the deal secured by Temasek, a sovereign wealth fund in Singapore, when it invested in Merrill Lynch. It dumped $4.4 billion into Merrill last December at $48 per share, but a downside protection clause meant that the firm would make money even if the stock plunged to $24. It did — and then some. By late last week, Merrill traded at just over $17 a share, increasing the pressure on CEO John Thain to do a deal. Over the weekend, he sold the firm to Bank of America in an all-stock transaction worth about $29 per share for Merrill shareholders-which means Temasek could walk away with about a 20% return should it sell it shares. The Temasek deal last December, banking sources say, taught everyone in the region a lesson: if you're talking to Wall Street, drive as hard a bargain as you possibly can-or walk. They need you much more than you need them.

And the theory 'THE RICH GET RICHER, THE POOR GET POORER' could never get more true than this.

And whose job would that be? Well, it's your job, U.S. taxpayers! If this seems unfair that's because it is. Mortgage brokers, investment bankers, house flippers and other sharpies got rich causing this mess. Now all of us have to pay to fix it. The one possible bright side is that, if done right, bailouts don't ultimately have to cost a lot of money. If the government buys assets when everybody's panicked and sells them when markets have calmed down again, it could even turn a profit.

In case you might not understand, it is not necessarily the rich who pay more income tax compare to the poor.

posted by Immortali @ 1:25 am