Andrew Ross Sorkin at NYT is reporting (My emphasis):
In what could set an important precedent, federal officials assured a big Japanese bank late Sunday that its planned investment in the embattled Wall Street giant Morgan Stanley would be protected, according to people involved in the talks...Paulson has found another formula that protects his cronies, their jobs and their stock positions, while funneling them money. Remember the days, oh so long ago, of Freddie Mac and Fannie Mae officers losing their jobs because they needed cash injections? Remember the days when these poorly managed companies' stock turned to dust when the government put in rescue money? Those days are gone. For Paulson's elite, they will show up this morning with their jobs intact, their stock positions intact (in fact, thanks to the government guaranty, a likely soaring Morgan Stanley stock). Somewhere, Dick Fuld, former Lehman CEO, is fuming.
The Treasury’s assurances amount to another extraordinary move by the government and could serve as a model for future deals. The tense, weekend talks were so critical to the financial markets that they drew in both the Treasury and the Japanese government...Mitsubishi and the Japanese government pressed the Treasury Department over the weekend to guarantee that if the United States were to inject money into Morgan Stanley at a later time — a step the Treasury has ruled out for now — the move would not wipe out Mitsubishi’s investment.
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