Whoops-a-daisy! The U.S. government made a “mistake” buying troubled assets from banks, said Carlos Slim Helu, the world’s second richest man, at a conference on stock markets in Mexico City, as reported by Bloomberg. Slim said that the assets are hard to manage.
He added that the recent global financial crisis began in the U.S., where “there was bad regulation and worse supervision” of derivatives instruments.
As we previously reported, in lieu of a government-sponsored automotive industry bailout, Slim has suggested that struggling U.S. automakers file for Chapter 11 bankruptcy protection and renegotiate uncompetitive labor union contracts in exchange for giving workers company shares.
If Slim is correct regarding U.S. government purchases of troubled bank assets and the auto industry bailout, which congress appears poised to enact tomorrow, the U.S. government may have racked up two whoops-a-daisies for taxpayers in the early stages of the financial crisis, a high score considering that each whoops-a-daisy is worth a few billion dollars.