Another Government Bailout
#91
09-25-2008, 03:23 AM
If everyone gets a bail out then there will be no one left to pay the piper. :? I think the best thing to do is break up these companies and sell off their assets. I think the cost to us taxpayers would be less than if we gave them a blank check. :?
#92
09-25-2008, 08:49 AM
Seems one of the sticking points is over executive compansation, apparently Treas. Sec. Paulson wanted to keep it "as is," but Congress has been getting so many emails to the contrary, they are now "negotiating" the compensation for the CEO's "golden parachutes." I say just fire them and don't pay them a damn cent.
Good news is now the FBI is investigating 26 different companies for fraud. Including, FannieMae, FreddyMac, AIG, Lehman and Bear Stearns. There will be persons going to jail over this, and they shouldn't be let out of jail until the taxpayers have gotten their money back. That seems fair. But I am almost certain no real details will emerge from this "deal of a lifetime" until AFTER the ELECTIONS and the same incompetent legislators return to Washington.
#93
09-25-2008, 10:11 AM
To kill a little time until we get hit with the final price tag of the bailout, I'll offer one more bit of light historical reading. LA Times - May 31, 1999.
Your money quotes:
All of this suggests that Clinton’s efforts to increase minority access to loans and capital also have spurred this decade’s gains. Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining†by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.
Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more.
The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer. Although Fannie Mae actually has exceeded its target since 1994, it is resisting any hike. It argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers. HUD says Fannie Mae is resisting more low-income loans because they are less profitable.
Barry Zigas, who heads Fannie Mae’s low-income efforts, is undoubtedly correct when he argues, “There is obviously a limit beyond which [we] can’t push [the banks] to produce.†But with the housing market still sizzling, minority unemployment down and Fannie Mae enjoying record profits (over $3.4 billion last year), it doesn’t appear that the limit has been reached.
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#94
09-25-2008, 01:41 PM
In the fall of 2004, Arthur Anderson Co. found some "accounting irregularities" at Fannie Mae. (Guess that never got fixed either.)
Then in March 2005, Fannie Mae, HUD and Bush, announced A "New Deal" for Americans wanting to own their own home. A "0" Down payment!! Nada, zilch, free basically. Just sign on the dotted line and move in. (it may have been directed at first time buyers, but by this late date all the "qualified" buyers probably had already received a loan.) Was anybody paying any attention? Wasn't there maybe just 1 person in Washington that would speak out and say this is a disaster waiting to happen? Is this the "best and brightest" America has to offer? If it is, then no wonder we are broke!
#95
09-25-2008, 02:17 PM
The following was said on the floor of the senate in May of 2006: (I linked it a few pages back)
Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac. The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform. For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay. I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. I urge my colleagues to support swift action on this GSE reform legislation. It is probably worth noting that the senator quoted above didn't sign on as a cosponsor until a year after the bill was introduced at the start of the 2005 session by Chuck Hagel (That speech here, if anyone cares to read it). The quoted senator saw the regulator's report in 2006 and tried to revive the issue. The response to his plea might be described as deafening though, in light of the two years that followed.
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Reading this blog will make you smarter and/or more attractive. (The preceding statement has not been evaluated by the FCC.)
#96
09-25-2008, 02:55 PM
Originally Posted by gordoUSA
In the fall of 2004, Arthur Anderson Co. found some "accounting irregularities" at Fannie Mae. (Guess that never got fixed either.)
Then in March 2005, Fannie Mae, HUD and Bush, announced A "New Deal" for Americans wanting to own their own home. A "0" Down payment!! Nada, zilch, free basically. Just sign on the dotted line and move in. (it may have been directed at first time buyers, but by this late date all the "qualified" buyers probably had already received a loan.) Was anybody paying any attention? Wasn't there maybe just 1 person in Washington that would speak out and say this is a disaster waiting to happen? Is this the "best and brightest" America has to offer? If it is, then no wonder we are broke!
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You take it cheap, what's to motivate them to ever give you a raise? . Funny is Rookies telling pro's how to make good money running cheap. . Liberals - Relentless, Vile, Sniveling, Whining, Lying, Vitriolic Complainers.
#97
09-25-2008, 02:58 PM
Originally Posted by 2
Can you mis-manage things this bad, without a purpose?
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Reading this blog will make you smarter and/or more attractive. (The preceding statement has not been evaluated by the FCC.)
#98
09-25-2008, 02:59 PM
I guess so now. After the fact. Pure greed and a "culture of corruption" in Washington.
But probably 80-85% of the incumbents will be re-elected to office. Another argument for term limits, get them out of office before they learn to steal too much.
#99
09-25-2008, 06:33 PM
WaMu is largest U.S. bank failure
By Elinor Comlay and Jonathan Stempel Thu Sep 25, 11:25 PM ET Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion. Thursday's seizure and sale is the latest historic step in U.S. government attempts to clean up a banking industry littered with toxic mortgage debt. Negotiations over a $700 billion bailout of the entire financial system stalled in Washington on Thursday. Washington Mutual, the largest U.S. savings and loan, has been one of the lenders hardest hit by the nation's housing bust and credit crisis, and had already suffered from soaring mortgage losses. Washington Mutual was shut by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. This followed $16.7 billion of deposit outflows at the Seattle-based thrift since Sept 15, the OTS said. "With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business," the OTS said. Customers should expect business as usual on Friday, and all depositors are fully protected, the FDIC said. FDIC Chairman Sheila Bair said the bailout happened on Thursday night because of media leaks, and to calm customers. Usually, the FDIC takes control of failed institutions on Friday nights, giving it the weekend to go through the books and enable them to reopen smoothly the following Monday. Washington Mutual has about $307 billion of assets and $188 billion of deposits, regulators said. The largest previous U.S. banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984. JPMorgan said the transaction means it will now have 5,410 branches in 23 U.S. states from coast to coast, as well as the largest U.S. credit card business. It vaults JPMorgan past Bank of America Corp to become the nation's second-largest bank, with $2.04 trillion of assets, just behind Citigroup Inc. Bank of America will go to No. 1 once it completes its planned purchase of Merrill Lynch & Co. The bailout also fulfills JPMorgan Chief Executive Jamie Dimon's long-held goal of becoming a retail bank force in the western United States. It comes four months after JPMorgan acquired the failing investment bank Bear Stearns Cos at a fire-sale price through a government-financed transaction. On a conference call, Dimon said the "risk here obviously is the asset values." He added: "That's what created this opportunity." JPMorgan expects to incur $1.5 billion of pre-tax costs, but realize an equal amount of annual savings, mostly by the end of 2010. It expects the transaction to add to earnings immediately, and increase earnings 70 cents per share by 2011. It also plans to sell $8 billion of stock, and take a $31 billion write-down for the loans it bought, representing estimated future credit losses. The FDIC said the acquisition does not cover claims of Washington Mutual equity, senior debt and subordinated debt holders. It also said the transaction will not affect its roughly $45.2 billion deposit insurance fund. "Jamie Dimon is clearly feeling that he has an opportunity to grab market share, and get it at fire-sale prices," said Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. "He's becoming an acquisition machine." BAILOUT UNCERTAINTY The transaction came as Washington wrangles over the fate of a $700 billion bailout of the financial services industry, which has been battered by mortgage defaults and tight credit conditions, and evaporating investor confidence. "It removes an uncertainty from the market," said Shane Oliver, head of investment strategy at AMP Capital in Sydney. "The problem is that markets are in a jittery stage. Washington Mutual provides another reminder how tenuous things are." Washington Mutual's collapse is the latest of a series of takeovers and outright failures that have transformed the American financial landscape and wiped out hundreds of billions of dollars of shareholder wealth. These include the disappearance of Bear, government takeovers of mortgage companies Fannie Mae and Freddie Mac and the insurer American International Group Inc, the bankruptcy of Lehman Brothers Holdings Inc, and Bank of America's purchase of Merrill. JPMorgan, based in New York, ended June with $1.78 trillion of assets, $722.9 billion of deposits and 3,157 branches. Washington Mutual then had 2,239 branches and 43,198 employees. It is unclear how many people will lose their jobs. Shares of Washington Mutual plunged $1.24 to 45 cents in after-hours trading after news of a JPMorgan transaction surfaced. JPMorgan shares rose $1.04 to $44.50 after hours, but before the stock offering was announced. 119-YEAR HISTORY The transaction ends exactly 119 years of independence for Washington Mutual, whose predecessor was incorporated on September 25, 1889, "to offer its stockholders a safe and profitable vehicle for investing and lending," according to the thrift's website. This helped Seattle residents rebuild after a fire torched the city's downtown. It also follows more than a week of sale talks in which Washington Mutual attracted interest from several suitors. These included Banco Santander SA, Citigroup Inc, HSBC Holdings Plc, Toronto-Dominion Bank and Wells Fargo & Co, as well as private equity firms Blackstone Group LP and Carlyle Group, people familiar with the situation said. Less than three weeks ago, Washington Mutual ousted Chief Executive Kerry Killinger, who drove the thrift's growth as well as its expansion in subprime and other risky mortgages. It replaced him with Alan Fishman, the former chief executive of Brooklyn, New York's Independence Community Bank Corp. WaMu's board was surprised at the seizure, and had been working on alternatives, people familiar with the matter said. More than half of Washington Mutual's roughly $227 billion book of real estate loans was in home equity loans, and in adjustable-rate mortgages and subprime mortgages that are now considered risky. The transaction wipes out a $1.35 billion investment by David Bonderman's private equity firm TPG Inc, the lead investor in a $7 billion capital raising by the thrift in April. A TPG spokesman said the firm is "dissatisfied with the loss," but that the investment "represented a very small portion of our assets." DIMON POUNCES The deal is the latest ambitious move by Dimon. Once a golden child at Citigroup before his mentor Sanford "Sandy" Weill engineered his ouster in 1998, Dimon has carved for himself something of a role as a Wall Street savior. Dimon joined JPMorgan in 2004 after selling his Bank One Corp to the bank for $56.9 billion, and became chief executive at the end of 2005. Some historians see parallels between him and the legendary financier John Pierpont Morgan, who ran J.P. Morgan & Co and was credited with intervening to end a banking panic in 1907. JPMorgan has suffered less than many rivals from the credit crisis, but has been hurt. It said on Thursday it has already taken $3 billion to $3.5 billion of write-downs this quarter on mortgages and leveraged loans. Washington Mutual has a major presence in California and Florida, two of the states hardest hit by the housing crisis. It also has a big presence in the New York City area. The thrift lost $6.3 billion in the nine months ended June 30. "It is surprising that it has hung on for as long as it has," said Nancy Bush, an analyst at NAB Research LLC.
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My reading of history convinces me that most bad government results from too much government. Thomas Jefferson- Democratic-Republican That some should be rich, shows that others may become rich, and, hence, is just encouragement to industry and enterprise. Abraham Lincoln "America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves." -Abraham Lincoln
#100
09-25-2008, 11:39 PM
Anybody see these protest websites?
http://www.theybrokeityoubuyit.com/ http://www.buymyshitpile.com/ |
