This is breathtakingly major bad news. From WaPo:
The Treasury Department this week plans to start outsourcing the management of up to $700 billion in troubled securities, using special contracting authorities that enable it to retain private portfolio managers, custodians and other financial services consultants without following standard acquisition procedures.
The department’s quick turn to the private sector will help it prepare for the massive task of overseeing mortgages and other financial assets to be acquired by the government as part of the Emergency Economic Stabilization Act that was approved by Congress and signed by President Bush last Friday.
But it means that the government has little time to assess the companies that will be partners in what could become one of the largest public sector funds in American history. Some of the same firms that have played roles in the rise and collapse of the mortgage-backed securities market may end up guiding the government as the bailout unfolds, department officials said.
The job of repairing the financial system is being outsourced (think "fees and commissions") to the very numbskulls who caused this mess in the first place.