Posted on 09/27/2008 10:45:52 AM PDT by Iron Munro
Here's why many Americans are having a tough time digesting spending $700-billion in tax money to prevent an economic disaster triggered by bad mortgages and greed.
Washington Mutual, the giant lender considered by many to be a poster child for making big profits on wild mortgage lending, was seized by federal regulators Thursday night and immediately sold to J.P. Morgan Chase. It was easily the largest bank failure in American history and only the latest example of the economic instability gripping the country.
The company's chief executive, Alan H. Fishman, had been on the job for less than three weeks. He was on a plane flying from New York to Seattle when the deal was arranged, according to the New York Times.
But don't cry for Fishman. Analysts say he is eligible for $11.6-million in cash severance. And he can keep his $7.5-million signing bonus.
How's that compare to your severance and signing bonus?
It's hard for most Americans to grasp the size and importance of the Bush administration's proposed bailout, even if urgent action is necessary to free up credit and protect the mortgages, businesses and retirement accounts for everyone who has managed their own affairs responsibly. But everyone gets this math: less than three weeks of work at a failing savings and loan for more than $19-million.
That is outrageous — and it explains why so many are so mad.
Why would anyone be upset at the compensation of this guy of all people. He certainly did not bannkrupt the company in 3 weeks. Why would any conservative or really anyone else object to him being paid what his contract called for.
If you were signing with an unstable company wouldn’t you want a signing bonus to leave your prior position? Would you want severance in case the company does not last?
Millions are angry because they don’t have a clue about the problem, and neither does the press that controls them.
If that was important then it should have been put in the contract for the loan guarantee. The CEO of WAMU got lucky. Finding someone to take over a train wreck in progress isn’t easy. It takes a lot of incentives for someone to take such a job.
“but don’t cry for fishman. analysts say he’s eligible for $11.6 million severance. and he can keep his $7.5 million signing bonus.”
they say that in-breeding takes place in far-away places in the mountains.
in this current “crisis”, one doesn’t have to look very far to see people wearing their pants very low with the attendant crack showing. (it’s no wonder they chased the “mafia” into the ground, so hatefully; they detested the competition.)
IMHO
On Cavuto on Fox this morning, one of his guests talked about the savings and loan bailout. The people who were bailed out went round to the back door and bought up stocks for pennies on the dollar and ultimately made millions more after they had scammed the people in the first place. Same thing is happening. These "worthless" papers are ultimately backed by tangible worth--i.e. real estate. Do you think Warren Buffet invested 5 billion in one of the failing companies to save money for the taxpayer? He knows he is going to make it back with interest.
vaudine
Best bank robbing job in history, one upped Jessy James.
What is the difference between a “thrift” and a bank?
Didn’t the category of “savings and loans” disappear after the S & L crisis of the late 80s? I know a number of big savings and loans went out of business, and I didn’t think any were called S&L’s anymore. I thought that they were all banks now. Maybe I’m wrong.
Also, didn’ the FSLIC, which was similar to the FDIC for bank deposits, also go out of business?
Don’t get me started....
I'd be happy if their constituents would vote them out office.
YET.
This precipitated an excellent question...
WAMU was worth $200 billion, but was transferred for $20 billion
What happened to the other $180 billion?
Assets can not be destroyed. They can be transferred, cashed out, hidden...
Without answering that question, any solution is meaningless.
Nothing can guaranteed that the crisis won't be repeated more than the search and recapture of assets, wherever in the world they are, and prosecution of the criminals.
There must be thousands of them.
Traders, CEOs, mortgage providers, multiple mortgage scammers, the whole lot...
That line of thinking is part of the problem; succeed or fail, they get their money.
No negative consequences.
Are you from an alternate universe?
What massive "responsibility?
Thrifts still have different capitalization requirements and are regulated by a seperate agency. Yes, they are now insured by FDIC, but that’s essentially where the similarity between banks and thrifts ends. For the most part regulatory oversight has been much more stringent for banks than thrifts. Thrifts are regulated by the Office of Thrift Supervision which has been understaffed for years and I would submit the level of professionalism is much less than the Office of the Comptroller of the Currency, which is the primary oversight for national banks.
I think execs should be paid on performance. If they EARN big bucks for the company then good for them, they should be paid some percentage but if they lose, they get canned, no pay beyond minimum wage, no severance package, only the retirement that was actually put in.
Does an average CEO add enough value to the company to justify a massive expenditure like that? Spin it like a free market equation.
Hint, most CEO’s overseas don't make near what US companies pay, and look who is buying out whom.
The rats have a clear plan to provide government the power to set wages for vast parts of the economy. The first leg of the plan is the proposed "Pay Check Protection" law. This law will almost mandate unions in every workforce. If your state does not have right to work, you will be forced to pay union dues. Any employer that is still not organized will be harrassed by the labor department. Any employer who resists "fair" bargaining will be sanctioned by the labor departement. In the second leg, the rats have another proposed law to force gender equity in compensation. This law will mandate the labor department to determine salary scales in almost every occupation. In the third leg, the rats will impose every kind of imaginable employer mandate including living wage, health care, workplace environment, racial quotas, disability, and family leave.
The transformation in the labor market will be profound. If you have a job in a protected industry, you will be satisfied. If you are not in a protected industry or seeking work, you are in for a rough ride. European levels of unemployment are waiting. The rat response will be to vastly increase unemployment compensation.
The only salvation may be self employment. The constraints on hiring will be so high that you will need to go alone. The IRS may curtail self employment using its onerous rules for contractors. Essentially the IRS forces many self employed into employee status.
The contract they write is up to the company. If you want to get into the corporate legal profession and change the language so every company must include the clause "unless you fail" in every employment contract, be my guest. In effect, that would turn away every CEO and/or executive of talent.
What massive "responsibility?
You really consider the attempt to turn an almost bankrupt company around a walk in the park?
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