Fund Manager: US Taxpayers are Suckers

| Fri May 15, 2009 10:21 AM EDT

The American taxpayers are suckers. That's essentially what Mark Patterson, chairman of the private equity firm MatlinPatterson Global Advisors, told his fellow finance industry bigwigs in a moment of perhaps too much candor at the Qatar Global Investment Forum, held this week in Doha. “The taxpayers ought to know that we are in effect receiving a subsidy," he said. "They put in 40 percent of the money but get little of the equity upside.”

Patterson is in a good position to know just how sweet a deal Wall Street is getting courtesy of our tax dollars. In January, his New York-based firm closed a deal to buy a controlling interest in Michigan's Flagstar Bancorp using $250 million in its own capital and $267 million in matching bailout funds from the Treasury Department.

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From the Telegraph:

Under the convoluted deal agreed earlier this year, MatlinPatterson has come to own 80pc of the shares while the US government has ended up with under 10pc.

Mr Patterson said the US Treasury is out of its depth and seems to be trying to put off drastic action by pretending that the banking system is still viable.

“It’s a sham. The banks are insolvent. The US government is trying to sedate the public because they are down to the last $100bn (£66bn) of the $700bn TARP funds. They think they’re doing this for the greater good of society.”

(H/T Zero Hedge)

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