Government says, "All your banks are belong to US." (was Freddie and Fannie thread)

[Omnis]

Anybody else tremendously disappointed with Greenspan’s latest statements? And to think he was once part of Rand’s “Collective” and wrote parts of Capitalism: The Unknown Ideal…

Greenspan is a turncoat bastard. He's like Symbiote Spiderman.

 

[YSSMAN]

It's okay YSSMAN, the liberals will take care of you. Just take their magic money.

Oh, I know... The funny part of the story is that it was an idea put forth by Republicans first!

* And yes, I realize I was thinking of Ben Bernake when I wrote that, not Greenspan. Either way, his comments were a bit odd, and its been fun watching The Daily Show and SNL make fun of them.

 

[Keef]

Oh, I know... The funny part of the story is that it was an idea put forth by Republicans first!

There's a reason I used the word liberal instead of Democrat--I actually sat and thought--and apparently you took the bait. I didn't mean Democrats; I meant liberals. The whole frickin' lot of them. I don't care who calls themselves what, but if they support a bailout and stimulus checks then I'll fiddle my butthole if they don't at least have some obvious liberal tendencies.

 

[YSSMAN]

That opens up a whole can of beans on the useage of the word "liberal," "Liberal," "conservative" and "Conservative." What we usually refer to as small-l liberalism is what most Americans prefer, free markets and political freedom. What we call big-L Liberalism would otherwise be the social liberalism that has defined much of the 20th century with Socialism, and at its extreme, Communism. The arguement over the use of the words "conservative" and "Conservative" are just as messy, and its essentially the inverse of the uses of liberal.

Nevertheless, I understand the point you're making...

There are a lot of big-C Conservatives that are otherwise supporting these big-L Liberal ideas, and it is very strange. The nature of American politics tends to allow for a bit of cross-belief changes in manner in favor of being re-elected, but nevertheless, it seems a bit confusing when the big-C leaders in the Senate and House push so hard to get these checks through.

I seem to recall an argument made by Congressman Ron Paul that many of the neocons are in fact Socialists, in the big-L sense. Its not completely surprising, particularly if they're looking at National Socialism in the same sense that the Nazis had it in their massive growth during the 1930s. Gotta make money somehow!

 

[niky]

Which makes it all ironic that people are saying they're voting this or that candidate because of the fear of socialist tendencies... as it seems both parties tend in that direction on different issues...

I was going to vote... but I haven't been following the elections very closely, and I feel it would be unfair of me to force my point-of-view and prejudices on the vast majority of Americans who will have to live under whomever we vote in for the next few years... as whatever each candidate does will have little effect on me, seeing as I live outside and have no solid plans of going back "home".

Good luck, guys...

 

[Sureboss]

There is supposed to be a 1% interest rate cut by the Fed Reserve today, isn't there?

 

[YSSMAN]

It was a half-point cut to 1% on Fed Funds, prime interest rates are getting a half-point cut to 4%. We'll see what this does in the short-term...

 

[ledhed]

I guess you guys know what FUBAR means ?


... if not learn it .

Thats our whole system at this point ,

Now how are we gonna get out of this mess ?

FIRST ...lose the illusions .

BOTH parties screwed us .

they BOTH took the cash .

if your a partison --your part of the problem .

Go away .

it will take new people --with no ties to the the cash stream ..and no desire ( LOL ok right ) for POWER and influence to solve the mess ...

Don't seem like its gonna happen soon .


sorry to be a cynic ,,

but bend over and take it for now....

I doubt EITHER bunch of idiots knows what to do ..at this point .

 

[Sureboss]

Are we using this is a general thread on the current global financial crisis?

The Bank of England have cut interest rates by 1.5% to 3.0%, biggest cut in a quarter of a century. If banks pass it on to customers fully, it could cut £100 or more per month off of a mortgage bill.

 

[FoolKiller]

Here's my question: Are we playing fair game on this election?

In September 2000 the tech bubble began its burst and was plummeting by November. George W Bush was blamed for the economic situation before he even took the oath of office.


Can we blame the current crisis on Obama now? Or are we suddenly going to be honest and realistic? Because that would be change.

 

[Keef]

Can we blame the current crisis on Obama now? Or are we suddenly going to be honest and realistic? Because that would be change.

We can't blame it on him. He's black. That would be racist. And you KNOW it.

 

[Omnis]

Can we blame the current crisis on Obama now? Or are we suddenly going to be honest and realistic? Because that would be change.

Sure, why not? It's the system that is the failure. Barack and John merely fought over who could be the best manager.

 

[YSSMAN]

Can we blame the current crisis on Obama now? Or are we suddenly going to be honest and realistic? Because that would be change.

That depends on the rest of America, not us. The President can serve as a figurehead on how to best address the issues, but either way, there is still a lot that the Bush Administration and our current Congress needs to address before they head out...

Also, its a good place to suggest reading Lindblom's "Market as a Prison" work as well.

 

[V1P3R]

Umm... http://abcnews.go.com/Blotter/story?id=5973452&page=1

 

[Keef]

Umm... http://abcnews.go.com/Blotter/story?id=5973452&page=1

If a company is run poorly it will go out of business. That's the way capitalism works. The government has gone and screwed with the system and now nobody has any idea what will become of these companies. They've been artificially inseminated by the government, and frankly, I don't think they used the **** from a 6' 2" 185 pound Ph.D. I think they scooped up some of that pot-addicted 17-year-old high school dropout's leftovers.

If those guys feel it's fiscally responsible to go on a vacation...so be it. I don't work for 'em.

 

[Sage]

Alan Greenspan vs. Ayn Rand and Freedom

 

[Danoff]

^ Good read.

 

[V1P3R]

GE? seriously...?

 

[FoolKiller]

GE? seriously...?

GE is a conglomo-corp in the truest since of the made up word.

They own companies that own companies. One of their branches is investments and loans. If they did not receive this bailout the division would have been dropped and thousands would have lost their jobs, but GE as a whole would continue on. I know this because it is what they are attempting to do with their consumer industries (appliances and lightbulbs) division here in Kentucky. They are looking at either selling it or spinning it off as its own company. Appliances and lightbulbs will no longer be a part of General Electric. Wrap your head around that one.

But no fear, GE is doing just fine building jet engines for Boeing and the Air Force and more machines in a hospital operating room have GE logos than my kitchen has, and I am a GE family.

No this is purely to save GE's financial business, not the conglomerate.

 

[Omnis]

Lol, GE Money Bank. Look forward to NBC, MSNBC, and CNBC to hail the bailout.

 

[Keef]

There's a big reen banner on MSNBC stating "COMING UP: Watch Paulson, Bernanke and Bair testify on bailout; scheduled for 9:30 a.m. ET".

There's no link. There's no story. Just that banner.

But FOX has an article. I didn't read it yet; I'm into other things.

Like showing you that CNN doesn't have it either. But they do have this.

What's the deal? Why aren't those two companies reporting what they're supposed to be reporting. FOX's coverage may be biased against the bailouts (I haven't read it) but the other two don't make a mention to begin with. I'm surprised you guys aren't all over this already.

 

[FoolKiller]

What's the deal? Why aren't those two companies reporting what they're supposed to be reporting. FOX's coverage may be biased against the bailouts (I haven't read it) but the other two don't make a mention to begin with. I'm surprised you guys aren't all over this already.

Because you are looking at Web sites, which require a story to be written or a video to be converted before they can post it up. Web sites are faster than newspapers but slower than an actual broadcast.

 

[YSSMAN]

What's the deal? Why aren't those two companies reporting what they're supposed to be reporting. FOX's coverage may be biased against the bailouts (I haven't read it) but the other two don't make a mention to begin with. I'm surprised you guys aren't all over this already.

It was all over the television this afternoon, perhaps they were trying to get you to switch on the TV? I was watching some of it this morning/afternoon, and it was all a little strange. Congress is unhappy because they were told that a large portion of the bailout would to the "toxic" funds on home loans, and instead, that $300 BN has gone to saving banks.

Hmmm.

All I know is that I find Barney Frank entertaining. I think its just his voice, or the way he has been portrayed on SNL, but I have a hard time not laughing even when he asks very serious questions...

 

[ledhed]

So ...ermmm I own a few banks and stuff ...when can I get my money ?

 

[Joey D]

We make the US auto companies jump through hoops and reluctantly give them money with harsh, but fair restrictions. The banks on the other hand get a free ride and pull this crap. This is precisely the reason why we should not have given the banks an essential blank cheque with no holds bar.

$1.6B Of Bank Bailout Went To Execs
Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

Rep. Barney Frank, chairman of the House Financial Services committee and a long-standing critic of executive largesse, said the bonuses tallied by the AP review amount to a bribe "to get them to do the jobs for which they are well-paid in the first place.

"Most of us sign on to do jobs and we do them best we can," said Frank, a Massachusetts Democrat. "We're told that some of the most highly-paid people in executive positions are different. They need extra money to be motivated!"

The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help.

Among the findings:

# The average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.

# Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.

This year, Goldman will forgo cash and stock bonuses for its seven top-paid executives. They will work for their base salaries of $600,000, the company said. Facing increasing concern by its own shareholders on executive payments, the company described its pay plan last spring as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels." Goldman spokesman Ed Canaday declined to comment beyond that written report.

The New York-based company on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.

# Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Virginia-based company received $3.56 billion in bailout money on Nov. 14.

# John A. Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, took the reins of the company in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options.

Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28.

Your Tax Dollars At Work: Chauffeurs, Club Dues

The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Assets Relief Program (TARP), a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks in a bid to prevent wholesale economic collapse.

The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes.

Banks that got bailout funds also paid out millions for home security systems, private chauffeured cars, and club dues. Some banks even paid for financial advisers. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners.

At Bank of New York Mellon Corp., chief executive Robert P. Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.

Goldman Sachs' tab for leased cars and drivers ran as high as $233,000 per executive. The firm told its shareholders this year that financial counseling and chauffeurs are important in giving executives more time to focus on their jobs.

JPMorgan Chase chairman James Dimon ran up a $211,182 private jet travel tab last year when his family lived in Chicago and he was commuting to New York. The company got $25 billion in bailout funds.

Banks cite security to justify personal use of company aircraft for some executives. But Rep. Brad Sherman, a California Democrat, questioned that rationale, saying executives visit many locations more vulnerable than the security-conscious U.S. commercial air terminals.

Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions - something particularly hard to take when banks then ask for rescue money.

He wants them to come before Congress, like the automakers did, and spell out their spending plans for bailout funds.

"The tougher we are on the executives that come to Washington, the fewer will come for a bailout," he said.

Source: http://www.cbsnews.com/stories/2008/12/21/business/main4680508.shtml?source=mostpop_story

 

[FoolKiller]

The thing that article forgets in regards to CEO, and many executives, pay is that they sign contracts. The companies are legally bound to pay that amount or the CEO can quit without notice and sue for due compensation.

The only way out of that is to renegotiate the contract.

I'm not saying that it is right that they are getting paid a ton when the companies are going bankrupt, because if any of those CEOs actually wanted to save some jobs they could have cut back their pay or completely renegotiated.

Now the board could have offered to renegotiate and even made a big deal with the government, but then the CEO could up and leave. They get paid what they do because that is what it costs to get a man that can run billion dollar industries. Anyone of those CEOs could up and leave and have executive offers at a dozen other companies before they had their personal belongings in the car.

 

[Joey D]

Weren't the auto CEO's forced to take $1 pay?

I say let them walk, most companies are ran by a board anyways. I'm sure there is someone who can step up to the plate if the greedy bastard who is the CEO no longer wants to work there.

 

[FoolKiller]

Weren't the auto CEO's forced to take $1 pay?

I know there was something there. But that was part of the agreement that has been negotiated for their bailout package. Had Congress put that in the financial bailout package then it would give these companies a better negotiating point.

Also with the auto companies there is a rule, that John DeLorean points out in his autobiography, among Detroit automakers: You don't leave Detroit. He talks about how as he moved around within the companies he was always considered an insider, was invited to parties, etc. But when he left they were outcast. I'm not sure if he is truthful about that, as he was trying to defend his reputation, but if it is true then it leaves Detroit execs very few places to go, as executive jobs tend to stay within the same industry.

The financial CEOs still have plenty of companies to look to, not just two others that are in the same boat.

I say let them walk, most companies are ran by a board anyways. I'm sure there is someone who can step up to the plate if the greedy bastard who is the CEO no longer wants to work there.

Boards are just mostly majority shareholders with huge stakes in the company. Rarely do they do more than give direction on a monthly basis. Many of them are often CEOs elsewhere. And of course, there is golden parachute often negotiated in a contract. If the company is going under or getting sold smart CEOs negotiate a huge chunk of money to be paid out to them.

Yep, it is common place to get paid after you have led a company to ruin or merger. It is there to protect a CEO from a crooked board or takeover, but it tends to let a bad CEO feel he has little to fear from mistakes.

The way CEO contracts are done it really is bad for companies because these guys may be geniuses in business but they have little to no loyalty to the company. But how else do you do it when your competitors are more than willing to do it that way?

 

[Dotini]

Judging by how stale this thread is, is it understood that no economic crisis exists anymore?


If a crisis existed or exists or will exist, can we assign cause or blame?

I fart in the general direction of:

- Government; executive, legislative, judicial, appointed bureaucrats and the Fed.
- Business leaders and unions.
- Herds of consumers who simply made unwise, not unlucky, decisions.
- Academics who provided the imprimatur of legitimacy for excessive risk taking. Even Uncle Miltie, Harvard and Chicago.
- Historical phenomena such as globalization, population growth, capitalism, etc.
- General cultural decay.

Financial crisis du jour: sovereign debt

Iceland has defaulted. Dubai is teetering on the brink, and so are Greece, Spain, Ireland and several others. The US has something like $3 trillion in short term notes coming due in the next 18 months or so. Is it reasonable to ponder a US default? What, me worry?