From her article here: Why, if the US was doing so splendidly compared with France, was so much of the infrastructure – roads, railways and municipal offices – so neglected? How come there was so much money around, in theory (on the ballooning stock market and in those dot-com share options), when so little effort seemed to be put into making it? Was it just lack of state benefits that kept unemployment down? And why could the US have one of the worst perinatal mortality rates in the industrialised world without this affecting its economic standing? The answer to all these questions, of course, is that it depends what you count and how you count it. The US topped so many economic rankings because, for the most part, it chose the indicators.
One of the beneficial, and less noticed, consequences of the current crisis is that it has spawned new interest in ways of judging a country's economic soundness and overall success. There have long been quality-of-life indices that include the "live-ability" of cities, including standards of health, housing, schools and public transport. But only rarely are the results amalgamated with officially recognised indicators, such as growth rate, productivity and per capita income.
Showing posts with label subprime mortgage crisis. Show all posts
Showing posts with label subprime mortgage crisis. Show all posts
Tuesday, March 10, 2009
U.S. economic indicators: smoke and mirrors?
Mary Dejevsky opines that one of the advantages in the current economic crisis will be a shift towards the U.S looking to gauge itself in 'live-ability' indicators and factors like healthcare, education and emotional security. Whether this will actually happen or will it get washed away with the next ephermal bubble remains to be seen. Of course, a sign of the times might be Obama's renewed focus on universal health care and the administrations vigorous tone on reforming education.
Thursday, November 13, 2008
The great monthly flip flopping ritual
Former Goldman Sachs CEO and current Treasury Secretary Henry 'FlipFlop' Paulson is caught in a curious case of shape shifting. We are now able to soundly predict with a large degree of confidence the frequency with which the Treasury Secretary performs the flips and flops on the bailout package. Yes, the predictable recurrence pattern on plans to use bailout funds now happens monthly. See below.
In September: The $700,000,000,000.00 bailout bill was called TARP (or Troubled Assets Relief Program). It was sold to lawmakers as a mechanism to buy off troubled and toxic securitized assets off banks and lending institutions and thus ease the credit crisis sparked by the mortgage meltdown.
In October: Buying troubled assets was cast by the wayside and the Treasury decided to flip and put out a plan to buy equity stakes in American banks of their choice. Hank's alma mater Goldman Sachs saw a cash injection of $10 billion. Morgan Stanley got another $10 billion. Is it a matter of coincidence that both of them announced bonus pools of 7 billion dollars. No, I would not dare suggest that they used taxpayer money to pay their bonuses.
In November: Treasury flopped and now announces that they have decided that buying up equity stakes in banks are not working (or maybe worked just well enough for those banks to declare bonuses). The wizards yesterday announced that they are planning on using the remaining bailout funds to help companies that issue credit cards, make student loans and finance car purchases.
In December: Plans to unveil disbursement of as yet unknown cash injections to as yet unknown set of companies as Christmas gifts. Consumer retail stores, bodegas and kiosks might need to behave properly in line as they queue up to get a part of the largesse.
Curiously missing from the whole bailout equation was help for troubled and distressed homeowners.
United States Senator from the state of NJ Robert Menendez summed it up best:
In September: The $700,000,000,000.00 bailout bill was called TARP (or Troubled Assets Relief Program). It was sold to lawmakers as a mechanism to buy off troubled and toxic securitized assets off banks and lending institutions and thus ease the credit crisis sparked by the mortgage meltdown.
In October: Buying troubled assets was cast by the wayside and the Treasury decided to flip and put out a plan to buy equity stakes in American banks of their choice. Hank's alma mater Goldman Sachs saw a cash injection of $10 billion. Morgan Stanley got another $10 billion. Is it a matter of coincidence that both of them announced bonus pools of 7 billion dollars. No, I would not dare suggest that they used taxpayer money to pay their bonuses.
In November: Treasury flopped and now announces that they have decided that buying up equity stakes in banks are not working (or maybe worked just well enough for those banks to declare bonuses). The wizards yesterday announced that they are planning on using the remaining bailout funds to help companies that issue credit cards, make student loans and finance car purchases.
In December: Plans to unveil disbursement of as yet unknown cash injections to as yet unknown set of companies as Christmas gifts. Consumer retail stores, bodegas and kiosks might need to behave properly in line as they queue up to get a part of the largesse.
Curiously missing from the whole bailout equation was help for troubled and distressed homeowners.
United States Senator from the state of NJ Robert Menendez summed it up best:
In the month of August, over 9,800 homes entered foreclosure every day, if this statistic was that there were over 9,800 Wall Street executives that lost their jobs every day in August, we would have ended this a long time ago.Sad but true...
Tuesday, October 07, 2008
How we got here.
Wednesday, October 01, 2008
Bailout angst on Wall Street continues - pictures
Stepping outside for lunch, one is greeted nowadays by signs that seem to exude a labor union type dispute in a factory setting. It was funny to see Main Street collide with robotic pin striped suits strutting around Wall Street... 
An intrepid man and woman team from dirtymoney.com managed to climb up a couple of flagpoles behind the iconic bull in Lower Manhattan and plant an American flag with the words FORECLOSED? emblazoned on it. They seem to have climbed the narrow poles using makeshift harnesses and cords. Impressive and dangerous, I must say. The scene below them was fairly chaotic with at least a hundred police officers and emergency workers looking to find some way to coax them down the poles.
It was an interesting scene - a busload of fairly clueless Oriental tourists somehow descended from nowhere and added to the general pandemonium.
Finally, the guy gets off the pole after about a half hour. He was greeted by the waiting arms of the officers who were fairly helpless in dissuading him earlier...
He was promptly read his rights and handcuffed and whisked away. His lady compatriot had scaled down earlier and faced a similar fate.
Meanwhile at a building overlooking the Stock Exchange, an enterprising group of young women decided to don these masks and placards around their necks with the words 'Greed Kills'.
I thought the most interesting part of the afternoon was this old individual casually resting against a trash can with his flute enjoying his dulcet production while the girls were protesting with their death masks above him. He seemed to be out of the whole system - in his own world.. Thursday, September 25, 2008
What is good for the goose is good for the...
New Yorker's Andy Borowitz has an interesting take on why he is "too big to fail" and makes his case for a bailout.
This is the first time I have ever asked for a bailout from the Federal Reserve. I know what you’re thinking. Why do I deserve your largesse, and I do mean largesse, since I’m asking for five million big ones? The answer is simple. Like many of our nation’s financial institutions, I am simply too big to fail.
This is the first time I have ever asked for a bailout from the Federal Reserve. I know what you’re thinking. Why do I deserve your largesse, and I do mean largesse, since I’m asking for five million big ones? The answer is simple. Like many of our nation’s financial institutions, I am simply too big to fail.
Folkert de Jong's sculptural tableau. The Shooting...At Watou; 1st July 2006 on display at the James Cohan Gallery (between Sept 6 - Oct 4th 2008)
Archive trotting
While the reasons behind the current mortgage crisis are myriad, easy down payments, easy access to cheap capital, low interest rates and watered down closing documents were among the leading ones… Here are a couple of speeches which may have been well intentioned...
Remarks by the President at the Conference on Increasing Minority Homeownership at The George Washington University. Tuesday, Oct. 15, 2002 (Full speech here)
To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can't make a down payment. They may be qualified. They may desire to buy a home, but they don't have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can't cross. And one way to address that is to have the federal government participate. And so we've called upon Congress to set up what's called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there's a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers.
.....
I'm also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, can regularly be used as a source of payment to provide more capital to lenders, who can then help more families move from rental housing into houses of their own. …
Remarks by the President on Homeownership at the Department of Housing and Urban Development Washington, D.C. June 18, 2002 (full speech here)
Probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that's too high, I'm not buying. They may have the desire to buy, but they don't have the wherewithal to handle the down payment. We can deal with that. And so I've asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy. We believe when this fund is fully funded and properly administered, which it will be under the Bush administration, that over 40,000 families a year -- 40,000 families a year -- will be able to realize the dream we want them to be able to realize, and that's owning their own home. (Applause.)
.....
The third problem is the fact that the rules are too complex. People get discouraged by the fine print on the contracts. They take a look and say, well, I'm not so sure I want to sign this. There's too many words. (Laughter.) There's too many pitfalls. So one of the things that the Secretary is going to do is he's going to simplify the closing documents and all the documents that have to deal with homeownership.
Thanks to Michelle for the link.
Remarks by the President at the Conference on Increasing Minority Homeownership at The George Washington University. Tuesday, Oct. 15, 2002 (Full speech here)
To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can't make a down payment. They may be qualified. They may desire to buy a home, but they don't have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can't cross. And one way to address that is to have the federal government participate. And so we've called upon Congress to set up what's called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there's a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers.
.....
I'm also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, can regularly be used as a source of payment to provide more capital to lenders, who can then help more families move from rental housing into houses of their own. …
Remarks by the President on Homeownership at the Department of Housing and Urban Development Washington, D.C. June 18, 2002 (full speech here)
Probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that's too high, I'm not buying. They may have the desire to buy, but they don't have the wherewithal to handle the down payment. We can deal with that. And so I've asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy. We believe when this fund is fully funded and properly administered, which it will be under the Bush administration, that over 40,000 families a year -- 40,000 families a year -- will be able to realize the dream we want them to be able to realize, and that's owning their own home. (Applause.)
.....
The third problem is the fact that the rules are too complex. People get discouraged by the fine print on the contracts. They take a look and say, well, I'm not so sure I want to sign this. There's too many words. (Laughter.) There's too many pitfalls. So one of the things that the Secretary is going to do is he's going to simplify the closing documents and all the documents that have to deal with homeownership.
Thanks to Michelle for the link.
Bartolomeo Veneto, 'Portrait of a Man', 1510, Oil on panel
Tuesday, September 23, 2008
Boondoggle dissection
A draft version of the bill authorizing Secretary Paulson to use $700,000,000,000.00 as he pretty much pleases is posted here. A quick, non-economist, layman's readthrough does not seem augur well for the following reasons:
1. How did we arrive at the $700,000,000,000.00 number? Very Unclear.
2. The planned Oversight Board is very very weak and staffed by insiders.
3. To call the section on Executive Compensation 'opaque' would amount to flattery.
4. No clarity on the price that the people would pay to acquire toxic assets.
1. It is customary in planning and budgetary practices to breakdown large dollar numbers into smaller chunks which help demystify and clarify the individual components and constituents which ultimately add upto create the total amount. This is typically done either in the main text or appendices: The only reference to $700 billion I could find was the following sentence:
The authority of the Secretary to purchase troubled assets under this Act shall be limited to $700,000,000,000 outstanding at any one time, by aggregating the purchase prices of all troubled assets held and any expenditures.
No breakup, nothing... Hopefully, a breakup of how the 700 number is clarified in the final version of the bill.
2. Everyone has been clamoring for a strong oversight board - if not to make sure that Secretary Paulson does not go on a trip to Las Vegas with the booty, at least to make sure that the billions are not used in partisan, Street friendly ways. Well, from the looks of it, the oversight board is weak and not independent at all. Judging from the fact that most of the players who indirectly wrote / co-wrote this are on the oversight board - cat guarding the henhouse...
The Emergency Oversight Board shall be comprised of the following:
- Chairman of the Board of Governors of the Federal Reserve System
- The Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation
- Chairperson of the Securities and Exchange Commission
- Two members who are not government employees, having appropriate financial expertise
The first three individuals mentioned were government employees tasked with making sure that we did not fall into this mess in the first place and they failed. Now we put them on an oversight board to bail out companies responsible for bringing the economy to its knees...
Hopefully, we see a little more independent oversight teeth added to the final version.
3. The other item deemed important was the need to put checks and balances on executive compensation such that all entities seeking to sell assets through the bailout under the Act meet some kind of punitive standards. One of the ideas advanced was to limit compensation for the CEOs of such entities to be lower than the United States President... Well, the bill is as vague as it can get in this subject...
The Secretary shall require that all entities seeking to sell assets through a program established under this Act meet appropriate standards for executive compensation and shareholder disclosure in order to be eligible, which standards shall include
- limits on compensation to exclude incentives for executives to take risks that the Secretary deems to be inappropriate or excessive;
- a claw-back provision for incentive compensation paid to a senior executive based on earnings, gains, or other criteria that are later proven to be inaccurate and
- such limitations on the entity paying severance compensation to its senior executives as are determined to be appropriate in the public interest in light of the assistance being given to the entity.
Pretty much means - the CEOs keep on making what they currently get - the bill will couch it in a language so broad and unclear, you CEOs need not have to worry one bit...
Hopefully, we will see clearer punitive measures added to the final version.
4. As far as the prices that they plan on purchasing the assets at – the bill is very, very vague – Are they planning on purchasing the assets at market price (par) or substantially above market price (both of which has its own advantages and disadvantages in a macro economic aspect)…
This definitely needs a lot of work and is not something that the lawmakers should rush and sign…
1. How did we arrive at the $700,000,000,000.00 number? Very Unclear.
2. The planned Oversight Board is very very weak and staffed by insiders.
3. To call the section on Executive Compensation 'opaque' would amount to flattery.
4. No clarity on the price that the people would pay to acquire toxic assets.
1. It is customary in planning and budgetary practices to breakdown large dollar numbers into smaller chunks which help demystify and clarify the individual components and constituents which ultimately add upto create the total amount. This is typically done either in the main text or appendices: The only reference to $700 billion I could find was the following sentence:
The authority of the Secretary to purchase troubled assets under this Act shall be limited to $700,000,000,000 outstanding at any one time, by aggregating the purchase prices of all troubled assets held and any expenditures.
No breakup, nothing... Hopefully, a breakup of how the 700 number is clarified in the final version of the bill.
2. Everyone has been clamoring for a strong oversight board - if not to make sure that Secretary Paulson does not go on a trip to Las Vegas with the booty, at least to make sure that the billions are not used in partisan, Street friendly ways. Well, from the looks of it, the oversight board is weak and not independent at all. Judging from the fact that most of the players who indirectly wrote / co-wrote this are on the oversight board - cat guarding the henhouse...
The Emergency Oversight Board shall be comprised of the following:
- Chairman of the Board of Governors of the Federal Reserve System
- The Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation
- Chairperson of the Securities and Exchange Commission
- Two members who are not government employees, having appropriate financial expertise
The first three individuals mentioned were government employees tasked with making sure that we did not fall into this mess in the first place and they failed. Now we put them on an oversight board to bail out companies responsible for bringing the economy to its knees...
Hopefully, we see a little more independent oversight teeth added to the final version.
3. The other item deemed important was the need to put checks and balances on executive compensation such that all entities seeking to sell assets through the bailout under the Act meet some kind of punitive standards. One of the ideas advanced was to limit compensation for the CEOs of such entities to be lower than the United States President... Well, the bill is as vague as it can get in this subject...
The Secretary shall require that all entities seeking to sell assets through a program established under this Act meet appropriate standards for executive compensation and shareholder disclosure in order to be eligible, which standards shall include
- limits on compensation to exclude incentives for executives to take risks that the Secretary deems to be inappropriate or excessive;
- a claw-back provision for incentive compensation paid to a senior executive based on earnings, gains, or other criteria that are later proven to be inaccurate and
- such limitations on the entity paying severance compensation to its senior executives as are determined to be appropriate in the public interest in light of the assistance being given to the entity.
Pretty much means - the CEOs keep on making what they currently get - the bill will couch it in a language so broad and unclear, you CEOs need not have to worry one bit...
Hopefully, we will see clearer punitive measures added to the final version.
4. As far as the prices that they plan on purchasing the assets at – the bill is very, very vague – Are they planning on purchasing the assets at market price (par) or substantially above market price (both of which has its own advantages and disadvantages in a macro economic aspect)…
This definitely needs a lot of work and is not something that the lawmakers should rush and sign…
Wednesday, September 17, 2008
On flipping flopped companies
Looks like the Fed is flipping and flopping a lot like the McCain campaign in its policy pronouncements. “Being for something before being against the same”.
When the financial markets were melting down on Monday with Lehman going under and jobs lost all around, McCain coolly comes up and tells us that the economy is strong. Later he backtracks and says that he was talking about the American people and not the health of the economy actually. Likewise, the Fed initially said that they will not bail out AIG before actually deciding to bail them out late evening yesterday. Yes, it called for an injection of $85 billion of taxpayer money this time. Of course, this is on top of the bail out of Bear, Fannie and Freddie.
The latest bailout might be labeled as the ‘mother of all bailouts’ since it was not just the company (AIG) that was bailed out, but all those toxic assets from companies that AIG had insured. In essence, AIG's clients still got to chew on their toxic mortgage meatballs while the taxpayers stepped in to foot the bill. Of course, many will advance the argument that AIG was 'too big to fail'. Even if one agrees with this theory (yes, this too big to fail thing is fast becoming a theory as more and more banks are signing on the bailout bucket list), the bailout should have come with regulatory conditions that will prevent this mess from happening again. Of course, none of that happened. Taxpayer money was pledged to straighten a large Wall Street firm with minimal guarantees ensuring the survival of the firm, ensuring the people at the top get their regular bonuses and also ensuring that nary a legislation or regulation is passed that would have prevented a meltdown like this from happening in the future. Well, this is free market at its best.
Two things were clear after the latest bailout: The first being that the Fed is absolutely clueless and has just about zero control over the rapidly deteriorating situation in the financial markets. The other being that we have just further slowed down what was essentially an already very slow moving financial train wreck. What is that expression of Chinese torture – death by a thousand cuts – is what we will be subject to….
When the financial markets were melting down on Monday with Lehman going under and jobs lost all around, McCain coolly comes up and tells us that the economy is strong. Later he backtracks and says that he was talking about the American people and not the health of the economy actually. Likewise, the Fed initially said that they will not bail out AIG before actually deciding to bail them out late evening yesterday. Yes, it called for an injection of $85 billion of taxpayer money this time. Of course, this is on top of the bail out of Bear, Fannie and Freddie.
The latest bailout might be labeled as the ‘mother of all bailouts’ since it was not just the company (AIG) that was bailed out, but all those toxic assets from companies that AIG had insured. In essence, AIG's clients still got to chew on their toxic mortgage meatballs while the taxpayers stepped in to foot the bill. Of course, many will advance the argument that AIG was 'too big to fail'. Even if one agrees with this theory (yes, this too big to fail thing is fast becoming a theory as more and more banks are signing on the bailout bucket list), the bailout should have come with regulatory conditions that will prevent this mess from happening again. Of course, none of that happened. Taxpayer money was pledged to straighten a large Wall Street firm with minimal guarantees ensuring the survival of the firm, ensuring the people at the top get their regular bonuses and also ensuring that nary a legislation or regulation is passed that would have prevented a meltdown like this from happening in the future. Well, this is free market at its best.
Two things were clear after the latest bailout: The first being that the Fed is absolutely clueless and has just about zero control over the rapidly deteriorating situation in the financial markets. The other being that we have just further slowed down what was essentially an already very slow moving financial train wreck. What is that expression of Chinese torture – death by a thousand cuts – is what we will be subject to….
Tuesday, September 16, 2008
Executive paycheck watch - II
As the investors keeps getting hammered with more bad news (AIG falling under after ratings cut last night, Goldman announced a couple of minutes back that their profits were down 70%, the first time since the company went public, Merrill to see large layoffs, thousands of Lehman workers out on the street), here is a bit of news that looks to the bright side of things...
From here: Merrill Lynch & Co. Chief Executive Officer John Thain and trading-division head Thomas Montag may reap payouts totaling more than $47 million if they leave or are given lesser roles after Bank of America Corp. buys the firm.
The ultimate irony with the whole payout was that John Thain was hired into Merrill nine months back explicitly to turn the ailing company around. Instead, he turns tables and sells the company lock stock to Bank of America (of course, he had no other option after the debacle at Lehman). Yes, greed is good.
The executive paychecks for CEOs who were responsible for sending Fannie Mae and Freddie Mac into the ground covered here previously.
From here: Merrill Lynch & Co. Chief Executive Officer John Thain and trading-division head Thomas Montag may reap payouts totaling more than $47 million if they leave or are given lesser roles after Bank of America Corp. buys the firm.
The ultimate irony with the whole payout was that John Thain was hired into Merrill nine months back explicitly to turn the ailing company around. Instead, he turns tables and sells the company lock stock to Bank of America (of course, he had no other option after the debacle at Lehman). Yes, greed is good.
The executive paychecks for CEOs who were responsible for sending Fannie Mae and Freddie Mac into the ground covered here previously.
Monday, September 08, 2008
Of Largesse and oversized executive pay
"If you have a bazooka in your pocket and people know it, you probably won't have to use it." - U.S. Treasury Secretary Hank Paulson said at a July 15 Senate Banking Committee hearing referring to the fact that if he has a blank check for bailing out Freddie and Fannie, people will continue to trust the institutions without him having to resort to writing taxpayer monies on the blank check that was ultimately offered to him.
The Treasury department rescued Fannie Mae and Freddie Mac by placing them into a conservatorship. Paulson was proved spectacularly wrong on his bazooka based thinking when the ever falling markets combined with creditors from Asia demanding fair share for their invested bucks threatened to topple these fair handmaidens of the mortgage industry. It is indeed ironic that the bastion of free market enterprise, the United States has to resort to government backed bailouts at the end of the day. Unclear still is the cost of the bailout - which could either be $25 billion or $100 billion depending on who you talk to. We are not even sure what the exact amounts the taxpayer will have to bear.
If one assumes that a conservative 20% of the holdings of Fannie and Freddie (assets currently at $5.3 trillion) are toxic, the amount that the government will have indirectly committed would be approximately $1030 billion – or about a trillion dollars of taxpayer monies. I feel for our children who will see the effects of this played out in their lifetimes…
All said and done, this might have been the right thing to do to restore needed faith and credit in our local economy and stabilizing the global markets at large.
However, I ran into the following bit of news that smacked of double standards.... Normal wisdom and classic free market principles would allow one to punish stewards of companies by slashing pay and withholding perks for jobs poorly done. Yes, bigger screwups bestow smaller paychecks - or so the saying goes - not so for the CEO's of Freddie Mac and Fannie Mae.
From here:
Daniel H. Mudd, the departing head of Fannie Mae, stands to collect $9.3 million in severance pay, retirement benefits and deferred compensation, provided his dismissal is deemed to be “without cause,”
Richard F. Syron, the departing chief executive of Freddie Mac, could receive an exit package of at least $14.1 million, largely because of a clause added to his employment contract in mid-July as his company’s troubles deepened.
Looks like the chiefs were fattening their pockets for many years…
Mr. Mudd’s predecessor at Fannie Mae, Franklin D. Raines, took home more than $52 million while he was chief executive from 1999 to 2004 while Mr. Syron’s predecessor at Freddie Mac, Leland C. Brendsel, took home more than $28.4 million from 1993 to 2003
The Treasury department rescued Fannie Mae and Freddie Mac by placing them into a conservatorship. Paulson was proved spectacularly wrong on his bazooka based thinking when the ever falling markets combined with creditors from Asia demanding fair share for their invested bucks threatened to topple these fair handmaidens of the mortgage industry. It is indeed ironic that the bastion of free market enterprise, the United States has to resort to government backed bailouts at the end of the day. Unclear still is the cost of the bailout - which could either be $25 billion or $100 billion depending on who you talk to. We are not even sure what the exact amounts the taxpayer will have to bear.
If one assumes that a conservative 20% of the holdings of Fannie and Freddie (assets currently at $5.3 trillion) are toxic, the amount that the government will have indirectly committed would be approximately $1030 billion – or about a trillion dollars of taxpayer monies. I feel for our children who will see the effects of this played out in their lifetimes…
All said and done, this might have been the right thing to do to restore needed faith and credit in our local economy and stabilizing the global markets at large.
However, I ran into the following bit of news that smacked of double standards.... Normal wisdom and classic free market principles would allow one to punish stewards of companies by slashing pay and withholding perks for jobs poorly done. Yes, bigger screwups bestow smaller paychecks - or so the saying goes - not so for the CEO's of Freddie Mac and Fannie Mae.
From here:
Daniel H. Mudd, the departing head of Fannie Mae, stands to collect $9.3 million in severance pay, retirement benefits and deferred compensation, provided his dismissal is deemed to be “without cause,”
Richard F. Syron, the departing chief executive of Freddie Mac, could receive an exit package of at least $14.1 million, largely because of a clause added to his employment contract in mid-July as his company’s troubles deepened.
Looks like the chiefs were fattening their pockets for many years…
Mr. Mudd’s predecessor at Fannie Mae, Franklin D. Raines, took home more than $52 million while he was chief executive from 1999 to 2004 while Mr. Syron’s predecessor at Freddie Mac, Leland C. Brendsel, took home more than $28.4 million from 1993 to 2003
Tuesday, July 01, 2008
Poem
“Andrew Seabrooks passed away on 6/21/08”
She walked out into the moist morning air
last week, looking for candles.
(It had rained the night before, but
she did seem to notice the petering drizzle).
She did not find them at the corner bodega,
found some old candles at the supermarket
among the mops and liquid cleaners.
As she paid, she asked for a
few pieces of tape. The cashier obliged,
noting her puffy eyes and unmade hair.
She then went to the cab stand where
Andrew Seabrooks, the man she loved,
had worked for most of his life.
The dispatcher at the cab stand helped her,
together, they laid it outside the storefront,
the candles on the ground, the taped piece
of paper at the gate. She wrote slowly,
in unsteady hand, in blue ink, her phone
number, in case, anyone had questions
about the sudden news of
the death of Andrew Seabrooks.
The piece of paper showed an image,
It was almost a silhouette, a burly man,
a khaki military uniform, a camouflage hat,
the sun strong behind him,
Andrew Seabrooks standing tall.
After lighting the candles and securing the tape
one more time, she stopped by his barber to tell
about the prayer service that afternoon.
She also informed the postman about the same.
They all came to the prayer service for Andrew Seabrooks,
who once drove a cab, sometimes installed car stereos,
but who could not find enough to pay the mortgage...
It was the thought of losing their home,
home to his wife, and their
four year old son Xavier Seabrooks,
that made him go to Kandahar.
Just before he left, (she seemed to remember)
the first foreclosure notice was delivered
by the same postman in the pew.
And for some reason, it helped cement his
shaky decision to save their home.
7,000 miles away, the week before,
Andrew Seabrooks passed away on 6/21/08.
A resident of South Ozone Park NY,
collector of action DVDs,
inveterate homebody,
a tinkerer of things mechanical,
an occasional joke player
and last, but not least,
a National Guardsman,
killed by an improvised explosive device
outside Kandahar, Afghanistan.
It is amazing what strange bedfellows
like the subprime mortage crisis
and an army trolling
for bodies (willing to die) can accomplish.
I wrote this poem using lines adapted from a story printed in yesterday’s New York Times.
She walked out into the moist morning air
last week, looking for candles.
(It had rained the night before, but
she did seem to notice the petering drizzle).
She did not find them at the corner bodega,
found some old candles at the supermarket
among the mops and liquid cleaners.
As she paid, she asked for a
few pieces of tape. The cashier obliged,
noting her puffy eyes and unmade hair.
She then went to the cab stand where
Andrew Seabrooks, the man she loved,
had worked for most of his life.
The dispatcher at the cab stand helped her,
together, they laid it outside the storefront,
the candles on the ground, the taped piece
of paper at the gate. She wrote slowly,
in unsteady hand, in blue ink, her phone
number, in case, anyone had questions
about the sudden news of
the death of Andrew Seabrooks.
The piece of paper showed an image,
It was almost a silhouette, a burly man,
a khaki military uniform, a camouflage hat,
the sun strong behind him,
Andrew Seabrooks standing tall.
After lighting the candles and securing the tape
one more time, she stopped by his barber to tell
about the prayer service that afternoon.
She also informed the postman about the same.
They all came to the prayer service for Andrew Seabrooks,
who once drove a cab, sometimes installed car stereos,
but who could not find enough to pay the mortgage...
It was the thought of losing their home,
home to his wife, and their
four year old son Xavier Seabrooks,
that made him go to Kandahar.
Just before he left, (she seemed to remember)
the first foreclosure notice was delivered
by the same postman in the pew.
And for some reason, it helped cement his
shaky decision to save their home.
7,000 miles away, the week before,
Andrew Seabrooks passed away on 6/21/08.
A resident of South Ozone Park NY,
collector of action DVDs,
inveterate homebody,
a tinkerer of things mechanical,
an occasional joke player
and last, but not least,
a National Guardsman,
killed by an improvised explosive device
outside Kandahar, Afghanistan.
It is amazing what strange bedfellows
like the subprime mortage crisis
and an army trolling
for bodies (willing to die) can accomplish.
I wrote this poem using lines adapted from a story printed in yesterday’s New York Times.
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