In the now-signed $700,000,000,000 (yes it really has that many zeros!) “Economic
Stabilization Act,” U.S. citizens were presented with a binary Hobson’s choice: 1) buy
hundreds of billions of dollars of rancid debt instruments to bailout Wall Street; or 2)
suffer a Greater Depression. Thanks to hundreds of pages of irrelevant tax reduction
rider bribes (“sweeteners”), option 1 ultimately passed.

But there are many more nuanced and fair approaches than the one chosen in the approved
bill. The ultimate aim was, and remains, to renew credit facility for United States businesses
and individuals. Credit facility grants can be made selectively, rewarding investment firms
that avoided the gambling impulse that led many top-tier, now defunct, firms to pour good
money after bad into exotic mortgage instruments. No matter what any politician tells us,
we do not have to break our backs catching exotic mortgage stunt artists.

The following is a list of just a few of such responsible investment banks, which deserve
to receive the credit facility grant from the United States Treasury. They might not have
paid themselves as many 9-figure bonuses* as some of the top-tier firms, when exotic
mortgage instruments appeared to be yielding astronomical profits, but they are still
standing, perhaps because they understood that exotic mortgages are a gamble and they
don’t want to gamble with our money.

INVESTMENT FIRMS THAT DESERVE TO WORK THE $700 CREDIT FACILITY

Vanguard Group, Inc.

The second-largest mutual fund company in the United States, Vanguard has had a
strict policy against purchasing collateralized debt obligation (“CDO”) commercial paper
for several years. As John Hollyer, Vanguard’s Risk Management Director, explained:

                                “It really gets down to transparency questions.
                                Can you understand what you have? And can
                                you measure it appropriately? We haven’t been
                                comfortable that we could.”

Bank of America Securities LLC

By avoiding investment in exotic mortgage instruments, Bank of America has not only
lived through the credit crunch, but has acquired two of its more risk-prone competitors
over the last year: Merrill Lynch and Countrywide. While the ultimate wisdom of those
purchases is yet to vet, no institution outside of the United States government has done
more to bailout the credit crisis.

Bank of New York/Mellon Corp. (Dreyfus Unit)

In 2005, Dreyfus determined not to invest CDO commercial paper because they could not
even understand the fundamental risk structure, a brave admission never to emerge from
the lips of the hyperconfident Wall Street elite.

Credit Suisse

Although Credit Suisse did invest in mortgage securities, including CDO commercial paper,
they carefully analyzed and evaluated the risks of such securities and priced their deals
wisely. They did not simply accept a triple-A rating from a bond agency.

AIM Global and Fidelity Investments

AIM and Fidelity receive honorable mentions on our list because, although they did
invest in some poorly-priced mortgage securities, they stopped investing early enough to
avert most of the fallout in 2007 and 2008, realizing their mistake.

*The top 5 investment firms paid themselves a record-breaking $39,000,000,000 in
bonuses in 2007, based largely on apparent successes of mortgage securities.

Sources:

D. Evans, Unsafe Havens, October 2007 (Bloomberg Markets)

J. Tapper, Last Year’s Big Five Bonuses, September 22, 2008 (ABC News)

Bank of America article, Wikipedia, accessed October 5, 2008.

AIM Global article, Wikipedia, accessed October 5, 2008.

Credit Suisse article, Wikipedia, accessed October 5, 2008.

Harvard Business School, Manual of Negotiation (1997).