Deal reached in US financial crisis [Update- NOT Passed]

[missdpuck]

Originally Posted by tussery

I was going to write a long winded post but I figured it would be more beneficial to go and invest in a life time supply of KY because it looks like I will be getting screwed for awhile.

Seconded. So what company makes KY? There's a stock tip.

[HotHotHeat]

Sept. 26 (Bloomberg) -- Wall Street's five biggest firms paid more than $3 billion in the last five years to their top executives, while they presided over the packaging and sale of loans that helped bring down the investment-banking system.

Merrill Lynch & Co. paid its chief executives the most, with Stanley O'Neal taking in $172 million from 2003 to 2007 and John Thain getting $86 million, including a signing bonus, after beginning work in December. The company agreed to be acquired by Bank of America Corp. for about $50 billion on Sept. 15. Bear Stearns Cos.'s James ``Jimmy'' Cayne made $161 million before the company collapsed and was sold to JPMorgan Chase & Co. in June.

Democrats and Republicans in Congress are demanding that limits be placed on executive pay as part of the $700 billion financial rescue plan proposed by U.S. Treasury Secretary Henry Paulson. The former Goldman Sachs Group Inc. CEO, who received about $111 million between 2003 and 2006, said in testimony to Congress on Sept. 24 that he would accept such limits as part of the plan, after initially opposing them.

``Shareholders and boards should have done something about this a long time ago,'' said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware in Newark. ``They justified these levels of pay on the idea that they're all geniuses. I think that balloon has burst.''

http://www.bloomberg.com/apps/news?p...EHc&refer=home

This is the most outrageous part of this whole thing. Unbelievable to think that these sleazy CEO's are being paid this much...For what? Guidance and leadership? To ensure the maximum value of shares?

I'm actually somewhat surprised at the wording politicians are using coming out of this bailout....

Pelosi said the provisions added by Congress will protect taxpayers from having to pay for the bailout.

"We sent a message to Wall Street - the party is over," she said at a press conference with Reid and other Democratic leaders from the House and Senate.

I guess time will tell if she's just talking out of her ass.



....it has to be said one more time. THREE BILLION in CEO pay?!?!? Really? I mean really? Considering these investment firms must have seen all this coming, did they really figure they could just walk away with hundreds of millions of dollars each?

[Displaced Flames fan]

110 page full text of the bill for those interested.

http://i.cdn.turner.com/cnn/2008/ima...o08c04_xml.pdf

[HotHotHeat]

FUNDING.—(1) Of the amounts made available
to the Secretary of the Treasury under section 118,
14
$50,000,000 shall be available to the Special Inspector
15
General to carry out this section. 16


WTF is this noise? $50 million for a special investigator? I can hear the toilets flushing.

oh, and this is a nice little number...

$11,315,000,000,000

Thanks for the link DFF.

[Dion]

Originally Posted by peter12

What a joke. The market will sort itself out. Poor American taxpayers on the hook because Wall Street companies can't figure out a good business plan.

It's not a joke. No bailout means more lending instutions going under and more fear and panic on the market.

[RougeUnderoos]

Originally Posted by missdpuck

Seconded. So what company makes KY? There's a stock tip.

Johnson & Johnson (JNJ). Went up 0.04% on Friday. You might be on to something.

They also make diapers, Rogaine and Imodium, all of which could be seeing serious sales bumps in the next while.

[Phanuthier]

Originally Posted by Phanuthier

(Anyone), if you do get a chance, I would love to hear where you think this $700B comes from.

Bump

After doing a lil research, it appears that in acquiring some of these mortgages and debts that the feds are actually owning assets, but are they really printing cash here?

[Displaced Flames fan]

Originally Posted by HotHotHeat

FUNDING.—(1) Of the amounts made available
to the Secretary of the Treasury under section 118,
14
$50,000,000 shall be available to the Special Inspector
15
General to carry out this section. 16


WTF is this noise? $50 million for a special investigator? I can hear the toilets flushing.

oh, and this is a nice little number...

$11,315,000,000,000

Thanks for the link DFF.

Special Inspector General...not investigator.

[Bring_Back_Shantz]

One of the things that kind of makes me laugh is how everyone is concerned that the burden for all of this is coming down on the lowly American taxpayer.

Keep in mind that this whole crisis was brought on by those same taxpayers getting themselves too far in debt and defaulting on their mortgages and other debts and causing the values of the securities against those mortgages to go into the toilet.

Yes not everyone was doing this, but there was clearly a large enough portion of the poplulation that was doing this that it would cause such a huge problem.

Also, I realize it is the banks fault for giving out all of those loans/mortgages to people that had no business getting them, but that's a bit of a chicke and egg arguement.

[kevman]

Originally Posted by Bring_Back_Shantz

Keep in mind that this whole crisis was brought on by those same taxpayers getting themselves too far in debt and defaulting on their mortgages and other debts and causing the values of the securities against those mortgages to go into the toilet.

Quoted for Truth!

I love how the media, at times, tries to play the citizens as the victims while their brand new truck is being repo'd... I don't feel sorry for anyone that was living outside of their own means when they default on their loans!

[Slava]

Originally Posted by Phanuthier

Bump

After doing a lil research, it appears that in acquiring some of these mortgages and debts that the feds are actually owning assets, but are they really printing cash here?

I thought that this was kind of covered already, sorry for not replying. I can't say for sure that there is money being printed, but the money is definitely coming from the taxpayers.

[Bagor]

Originally Posted by kevman

Quoted for Truth!

I love how the media, at times, tries to play the citizens as the victims while their brand new truck is being repo'd... I don't feel sorry for anyone that was living outside of their own means when they default on their loans!

Yep, there was a lot of stupidity involved by US consumers no doubt but at the same time the lenders have to take responsibility for their greed. It all went against conventional risk assessment. In fact there doesn't seem to have been any at all, and if so it was ignored.

Money shouldn't have been made available to them. Who the hell buys a house at 36 months interest free and 15% thereafter?

A combination of extreme greed and extreme naivety/stupidity.

A few quotes from a very interesting read into what was going on.

http://www.responsiblelending.org/pd...went_wrong.pdf

"I would reject a loan and the insanity would begin," Audrey Streater, a former underwriter and underwriting team leader for IndyMac in New Jersey, said in an interview with CRL. "It would go to upper management and the next thing you know it’s going to closing. . . . I’m like, ‘What the Sam Hill? There’s nothing in there to support this loan.’

"Her lawsuit claims IndyMac purposely structured the deal so it was ignorant of her financial means and ignored clear evidence that something was amiss with the information submitted for her application. IndyMac specifically instructed the broker to send copies of her Social Security award letters with the dollar amounts blacked out. In other words, the lender wanted proof that she was receiving Social Security but didn’t want to know how much.

Her IndyMac loan file is full of inaccurate and contradictory information. One document indicated she was getting $1,100 a month in retirement income. Another said she was employed and earning $2,100 a month. Another pegged her income at $3,200 a month. Similarly, IndyMac paperwork and computer files show her assets growing from zero to $2,100 to more than $20,000 – all in the matter of 10 days.."

[Slava]

Originally Posted by Bagor

Who the hell buys a house at 36 months interest free and 15% thereafter?

People who want a house and get told that they can simply re-finance before they ever see the 15% rates. When the average guy is told this by an "expert" its a compelling argument for them to buy the house they always wanted...

[peter12]

Originally Posted by Phanuthier

Yeah, maybe... in 10 years.

Who is to say that a bail-out will work now? There is a lot of economic evidence that FDR's bailouts in the 30s actually PROLONGED the Great Depression.

This slump is the natural event that occurs when creditors make risky and unwise decisions. They should have to pay the price for this and so should the American consumer who unwisely has been using up resources and spending far outside of their fiscal means.

[Finner]

HOLY F...congress rejected bailout, market just dived.

[Iowa_Flames_Fan]

Originally Posted by Finner

HOLY F...congress rejected bailout, market just dived.

Wow. For the first time I'm genuinely getting worried. This is not good news IMO.

[I-Hate-Hulse]

Whoa - they havent quite rejected it yet have they? CNN is showing 207 of 218 votes needed to pass the bill.

[Wookie]

yeah I've been searching but havent found anything that says "nay"

[HOOT]

Breaking News on CNN: "$700 Billion bailout bill has failed in the house"

[Finner]

http://www.theglobeandmail.com/servl.../BNStory/Front

Markets dive as U.S. bank bailout appears headed for rejection

TSX is down 840 right now.