Take the money and run… Or where did the money go?
Financial service fees are costing us more than we realize. Every time a trade takes place, some one is making some fees on the deal. Even if it is just a bunch of computers playing gottcha for a fraction of a cent a share, it amounts to a lot of money for the Wall Street financial services folks. And then there are the bigger paydays – advisory fees, financing deals, hedge fund fees. Then there are writedowns – money just “gone”. Rate cuts by a sympathetic Fed may benefit this guys more than the so-called intended beneficiaries – home-owners who are over-extended by option ARM resets.
Just to name a few…
Merrill Lynch – sole adviser to Royal Bank of Scotland, Fortis of Belgium and Banco Santander Central Hispano in their bid for ABN Amro. $179 million in advisory fees, arranging the financing additional $150 million.
Bear Stearns – two failed funds hedge funds, whose failure cost investors $1.6 billion
Deutsche Bank and UBS announced writedowns of $3.11 billion and $3.4 billion this week, respectively,
Merrill, marking down the value of mortgages, asset-backed bonds and leveraged loans at $5.5 billion.