Back when markets were close to seizing up, many thought it was imperative that the Federal Reserve do something--anything. To prevent a market meltdown, which would have had deleterious consequences, the Fed put together a wide array of programs, about which it has just disclosed information about the beneficiaries--causing a stir in some cases.

Consider the Term Asset-Backed Securities Loan facility, which was designed to keep the markets liquid and functioning. The goal was to make loans so investment entities could buy troubled assets. Some of the recipients of TALF funds were ordinary rich folk, a horse farm owner, a chairman of a non-profit, a one-time political operative in Washington, as well as the likes of Michael Dell, Julian Robertson and other big names, notes the New York Times.

So, should this be controversial? It would be easy to deride it as merely a welfare program for rich people, none of whom hit a home run with the borrowed funds, though double digit returns were possible depending on what they bought. The whole point was to facilitate buying and selling of toxic assets, and that in part was achieved. No participants got money free. They were required to put up collateral. Unfortunately, not all have paid back their loans.

From the wealthy investor point of view, it was an opportunity to take advantage of a government program to buy some distressed assets on favorable terms. There are worse things you can do. The investors can always argue they were doing it to help the economy.

For more:
- here's the article

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