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Congress Shocked To Find That Being CEO Of A Bankrupt Company Is The New Killing It
Two weeks ago we reported with sheer disgust that the outgoing CEO of bankrupt Freddie Mac, Ed Haldeman, was to pocket over $4 million for his brief two year stay at the nationalized GSE, which money was to reward him for lots of hard work collecting bail out cash from the Treasury. $21 billion to be precise. Apparently it is not easy to beg from Tim Geithner which explains the compensation for a task which is essentially supervising a financial black hole with an attached run off portfolio. Nonetheless the optics of this farce are rather unpleasant which is why we said that this is the (one of many) reason "why people in America are very, very pissed." Today Congress, which has yet to ban itself from trading on inside information, has decided to at least rectify this one sticking point, and moved forward with a "bill to block multimillion-dollar executive pay packages at Fannie Mae and Freddie Mac even as their regulator defended them as necessary to retain top talent and limit taxpayer losses at the bailed-out companies." And where are they going to go: MF Global? Morgan Stanley? RBS? Jefferies? As for what new pay wil be: "The committee adopted an amendment that would use the pay scale that applies to independent financial regulators, such as the Federal Deposit Insurance Corp, which allows for higher pay than at most federal agencies. Representative Al Green, who offered the amendment, said this would have the effect of limiting the highest salaries to about $260,000 per year." While still about 3 times more than what they deserve, this is a good start. And an even better one would be to if not unwind the GSEs, then to at least recognize that their $7 trillion in debt should be counted toward the US Federal debt, as Peter Orzsag suggested once. Naturally were that to happen US total debt/GDP would be over 150%, and the bond vigilantes would suddenly be confused whether their time is not better spent on this side of the Atlantic. Yet the biggest twist in this story, is that not only are the GSEs bankrupt, but as the NYT reported earlier, the FHA itself has a "close to 50% chance of requiring a bailout." Add to that that the corporate retirement guys (PBGC) and the post office (USPS) are now effectively broke as well, and very soon being the CEO of a bankrupt company will be the new killing it.
From Reuters:
Lawmakers from both parties have expressed shock at revelations the two government-owned mortgage finance firms, which have been propped up with about $169 billion in federal aid, were paying out $12.79 million in bonuses for 10 executives. "The taxpayer-funded bailout of Fannie Mae and Freddie Mac is the biggest bailout in history," said Representative Spencer Bachus of Alabama, chairman of the House panel. "Adding insult to injury, the top executives of these failed companies receive multi-million-dollar pay packages."
One wonders, inversely, just how shocked the public would be to find out how many congressmen and women traded in advance of congress itself legislating new rules as relate specifically to the GSEs.
The response, of course, is that nobody would ever surf porn all day for the paltry sum of $260,000:
DeMarco said the firms, the top two providers of funding for U.S. mortgages, need to be able to compete with other financial service companies for highly skilled executives.
"We have an entire competitive marketplace in the industry that suggests compensation is an important factor in attracting and retaining top talent," he said.
As the regulator, DeMarco has broad authority to direct the companies' activities, and he approved the pay in consultation with the Treasury Department. The pay packages have followed the same pattern over the last few years; the structure was set in 2009.
He said one of the "biggest concerns that has driven" the the executive compensation packages is an apprehension that the two companies will lose key staff if they are not fully compensated for their marketable skills. As employees leave, DeMarco has tried to reduce pay levels for their replacements.
Senate Banking Committee Chairman Tim Johnson, a South Dakota Democrat, expressed concern that tying pay to a government scale could do more harm than good.
"I fear that the federal pay scale will chase away the knowledgeable people we have and rely on to do a great job in a highly complex situation," he told Reuters.
Acording to DeMarco it is best to phase in reforms ala Italy: 2 years over 15 years or something.
DeMarco told the Senate committee any changes in pay should not be a "sudden shock" and said the best way to reduce compensation would be for lawmakers and the Obama administration to agree on a future course.
"Then we could have a final resolution of Fannie Mae and Freddie Mac in conservatorship, which would resolve the compensation issue once and for all," he said.
Because who knows what chaos would ensue if the overseer of a bunch of insolvent loans with massive negative equity decided to go wild and act all irresponsible. Let's see: none?
And in other news, while the expert insider traders squabble over other people's pay, even as they "hit the bid" all day long, yet another housing entity is about to get the chop... and thus billions more in taxpayer funds.
The Federal Housing Administration has a “close to 50” percent chance of requiring a bailout if the housing market deteriorates next year, the agency’s independent auditor said in a report released Tuesday.
The F.H.A., which offers private lenders guarantees against homeowner default, has just $2.6 billion in cash reserves, the report found, down from $4.7 billion last year.
The agency’s woes stem from the national foreclosure crisis. In the last three years, the F.H.A. has paid $37 billion in insurance claims against defaulting homeowners, shrinking its cash cushion.
The auditors determined the agency’s level of supplemental cash reserves by projecting losses on its mortgage portfolio and counting them against expected premium revenue. This year, the audit found that the F.H.A. supplemental reserve was less than one-quarter of a percentage point of its current portfolio: $2.6 billion against a $1.1 trillion mortgage portfolio, as of Sept. 30. Legally, the housing agency is required to keep a 2 percent cash buffer, a target it has not met since 2008.
F.H.A. officials argue that the likelihood the 77-year-old agency will need its first taxpayer bailout is slim. “It would take very significant home price declines to create a situation in which the portfolio would require any additional support,” said Carol Galante, acting commissioner. “There is no evidence or widespread prediction that home prices are going to decline to the kind of levels” requiring a bailout, she said.
Where does one even start...
Maybe by pointing out that in addition to all of the above, both the PBGC and the USPS are also bankrupt.
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i always thought that was everyones goal in life
How does the level of disgust at this whole fucking debt-driven farce rise any higher? Every time you think you can't be any more sick of this fucking shit, they turn over another rock and more cockroaches go scurrying. And where the fuck is Mister Hope and Change and "I didn't get elected to help fat-cat bankers"? Where the fuck is that guy and his transparency? Oh, that's right, he is too busy trying to figure out how to get the NBA going again.
And on top of the fucking debacle that are Fannie and Freddie we all know that the FHA has been the world's largest dumping ground the past 3 years in any attempt to keep housing unaffordable while still spending billions and billions for "affordable housing". It is sick in every fucking sense of the word. Fuck this fucking fuck of a fuck.
And the helicopters hover over the Financial District. Probably to keep tabs on some rag-tag "protestors" while the rapists continue to sodomize the economy and walk off with huge rewards for fucking everybody in the shower. And the police are just there to make sure are rights are not exercised in any way that threatens their masters.
Nice job, you fascist fucks that like to have your pictures taken and pretend you are human. And fuck your children, too. We all know they will be as fucking disgusting as your are.
sad to say, but in remembering Marie Antoinette, the whole family was disposed of. I don't advocate killing, but possible imprisonment of their whole genetic line (will rid us of most sex offenders/incestual sick mother fuckers). Suggestions include waterboarding the Blankfeins??? Just food for thought.......
Amanda
ROTFL..."top talent" in organizations that are fucking 55% black??!?! WTF, talk about does not fucking compute.
FNM/FRE are diversity dumping grounds full of complete incompetence.
And Bachus can go fuck himself along with the entire Congress. Fucking new rules going into effect to shut down coal plants, driven by the NE demofags. Where the fuck is their electricity supposed to COME FROM? Fucking FAIRIES?
Oh, but look, NG is so cheap, let's put EVERY single watt of generation capacity onto that...so when it peaks and declines savagely we can all go fucking dark in an instant. JFC, these morons all need to be locked in a room and burnt to death. I mean, they are so sick and revolting that you kind of demand a really tortuous death for them.
Guess you make living from dirty coal.
Just reading about clusters of asthma in hundreds of children from West Virginia.
Trav, please read "The Delinquent Teenager".....just got finished with it and it gives you great "reasonable" discussion points to deal with those energy idiots.
You're still a bit of a dick but +1 for goddamned style / being dead on target on this one!
A bit of a dick? This guy is a fucking nazi. Diversity dumping grounds? Yeah, well, like the point of the article was that the good ole white boys at the top who are killing it aren't exactly role models for work ethic, neither are they successful at running the company, or smart. In fact they're incompetent morons who lucked into a bailout bonanza. Guess you missed that point. Go fuck yourself.
http://en.wikipedia.org/wiki/Charles_E._Haldeman
Good ole white boy from Pennsylvania. MBA from Harvard. Diversity dumping ground. JFC. Trav you are mentally handicapped. You probably could get diversity hired for that. Should really look into it. Fucking tard.
some chinese friends of mine taught me this one, which they explained basically implied f-you and your family all the back to the cave.
#5. "Fuck the 18 generations of your ancestors" (Cao ni zu zong shi ba dai)Read more: The 9 Most Devastating Insults From Around the World | Cracked.com http://www.cracked.com/article_16275_the-9-most-devastating-insults-from-around-world.html#ixzz1dpkxHUNe
+1 Excellent Rant!
"One wonders, inversely, just how shocked the public would be to find out how many congressmen and women traded in advance of congress itself legislating new rules as relate specifically to the GSEs."
Hold me closer tiny dancer...
Former White House Chief of Staff Rahm Emanuel is the latest lawmaker to get caught up in allegations of insider trading while a member of Congress.Then-Rep. Emanuel reportedly sold up to $250,000 in Freddie Mac stock on February 21, 2003 days before it dropped by 10 percent — and weeks before it was publicly revealed that the entity was under criminal investigation for inflating earnings.
Read more: http://www.businessinsider.com/book-rahm-emanuel-dumped-tons-of-freddie-mac-stock-days-before-it-collapsed-2011-11#ixzz1dp54abbP
Thumb through this site http://www.crewsmostcorrupt.org/search/node/Giffords
Talk about useless eaters
I didn't see Bwaney Fwank.
Has he turned his other cheek? ;-)
Rahm Emanuel is corrupt?
Damnit, my faith in our system is slipping.
Make Change
https://contramanfund.wordpress.com/2011/11/15/occupiers-guide-for-the-9...
"...eliminate the money motive from politics."
No amount of new laws or regulations will achieve such a goal. Money and power will always be linked. The penners of the constitution understood that, and offered no provision for gubermint funded housing schemes. If we'd just pay attention to that document in the first place, most of these human greed issues would be kept at a minimum.
Agreed... nothing is perfect. However, it's much better than the Status Quo if everyone has an equal, democratic voice, no? So then, should we rotate the political term limits of public service for the rich and powerful pocket politicians? Hard annual "date certain" service limits would aid in breaking up crony relationships as mentioned, allowing us all to participate, at some time or another, with introducing legislation favouritism now given only to the powerful elite? Perhaps, only then can we remove legislative corruption and power from the all powerful Corporate Entity. Proportional Representation Bitchez!
Throw out the illgotten 16th and 17th amendments as a first step. Those two have screwed us more than we know. Let's try it as it was intended before trying to erect some new "system". We haven't had a constitutional republic since 1913.
You are delusional if you think that
Because politicians will be in a hurry to pilfer as much as they could in the short time they have. Corruption will be far more overt, rampant, and pervasive.
Perhaps not. There is a precedent of citizen government with limited terms that lasted for quite some time.
The glory of Rome at it's finest......and don't anyone dare disagree without reading Will and Ariel Durant's History of the World......Rome had some non-corrupt centuries.
That is exactly why we need many more "sosoome's", "pvzh's", "wonder_hampster's" and even more lunchbox "Joe Doe's" elected to be our Reprsentatives, but only elected by "natural persons" - not via 1350 inner-nominated directorships, non-publically elected, corporately-controlled boards of more than 35,000 large scale donation providers/corporate lobbying groups, but rather real people, now the 99%, who have been stuck holding the bag.
So, those newly-elected 99% political leaders, "...will now be in a hurry to pilfer as much as they can in the short time they have. Corruption will be far more overt, rampant, and pervasive" towards the 99%... and that is by some accounts, a good form of democratically-elected "crony capitalism".
Don't hold back man, tells us how you really feel
Good points all
Many are outraged, but not enough yet. most are worried about the more important things like rent and dinner.
Its clear now that chaos is gaining traction. they will allow a few weeks of protest to let the plebs blow off some steam. then just end it when they see fit.
Pent up disgust will explode from the stupidist thing happening like police brutality or shooting, not from the theft of billions from good ole boys.
O/T its been a while since ive been to the Village, down town, hate the fucking no parking
ENJOY http://www.youtube.com/watch?v=kzq4-vgLvzY
Here is some GOOD news:
"Senators introduce "STOCK Act" to stop "insider trading" in Congress
http://www.cbsnews.com/8301-503544_162-57325280-503544/senators-introduc...
Some one makes a difference; gets the coverage from 60 minutes show, shines light on crony capitalism.
Pfft! Pure election-year fodder for the herd, designed to highlight the upcoming election as the "most important one, EVAR!"
Maybe, we can call and show support. Fuck them for profit on inside information that directs course of country.
Congress work is long hours, and less pay, so this nice little perk, fuck them, work for the people.
Well, the good news is that they may admit that this might be wrong.
The bad news is that there is no mention of trusts (family trusts, "blind trusts", etc...) or the "hey buddie, you might want to put some money into this" bullshart that happens every freakin day.
Ron Paul is right about auditing the Fed. Who wants to audit Congress? (I'm including all of their non-personal accounts). Nobody is talking about those.
Dear .gov
If you let home prices fall to 1x income, where they should be, as you let our incomes fall (currently, incomes are lower than 1973 when adjusted for inflation), I, the RafterMan do solemnly swear to buy a farm with 10 acres for the sum of 35,000 Federal Reserve (redeemable for nothing, nowhere, on demand) Notes.
Until then, I'll quietly vote with my shut pocket-book while you try your damnedest to fuck this nation in the ass and save your bankster buddies by keeping the housing market marked-to-fantasy.
Great vow, Rafter, and I'd probably enjoy having you as a neigbor.....if you could better define inflation?
Well I'd say inflation is an expansion in the money supply, coupled with a static or increasing velocity of said money.
Von Mises says:
So I suppose I am close to correct. Let me know where that plot of land is, I have experience in small scale farming and a 6.8 SPC AR platform rifle; and much more! Contact for resume. :)
WestVillageIdiot figured it out:
+6.02x10^23
"Here's to your fuck, Frank."
"Fuck this fucking fuck of a fuck."
Yes.
Classic " Fuck this fucking fuck of a fuck. "!
your response contained a bit of foul langaue...but I couldnt agree more! Its an absolute joke the shit thta goes on in this country...but the day is coming when these financial wizards will be drug from their homes and then beaten and burned!
WVI, I am the one who voted your wonderful rant down. As of this post, 60 people liked your rant, and I'm the only one who voted it down....for the love of gawd, man, you should have used the word f$ck more often......I'm disappointed you held back.
And of course I agree with everything you said.
"Winning by fucking-up as often as possible!!!"
If the post office goes bankrupt will we finally send everything to email?
*Snarks*
Why not, MF Global did it
Banana Republics reward incompetence and cronyism like capitalism used to reward hard work and brains.
Guess what kind of Republic we're now.
"If the post office goes bankrupt will we finally send everything to email?"
2002 missed this post.
(Translation.....that's when the post office "officially" went bankrupt.)
Man, you kill me, Tyler. Lolololol.
Where can Cdad get one of these CEO jobs?
You could do it.
I could do it.
A rolloff or runoff portfolio doesnt require two million per year salary.
Can you do basic financial math?
Do you understand the concept of convexity?
You are hired. Congratulations
Sweet! Where is my corner office, and how hot is my secretary?
You get Sharon Buy-a-lick
@Cdad
There's a long initiation ritual. For starters, you need to find a first-born and eat it. Later stages require a lot of sodomy (pitch AND catch) and lots of feces eating.
Cue James Brown singing "Killing it in America!
Seriously, look at the HUD/FHA forecast of hoime prices. +6.1% in 2014 NO MATTER WHAT SCENARIO OCCURS (Euro meltdown, etc).
HUD Release FHA Annual Report – Optimistic House Price Assumptions (Pollyanna Ignores Europe)
http://confoundedinterest.wordpress.com
These clowns will say anything to stay in the game.
What else can they do? Admit incompetence?
Admit it? They can't even spell it.
We're pissed about the $14B LOSS BEING REPORTED BY THE USPS today also.......
another diversity dumping ground.
Diversity fucking kills everything it touches
This post adequately sums quite nicely the disgusting corruption between D.C. and bankers on Wall Street. And why we are fucked.
Be prepared for this story on the Department of Housing and Urban Development / Federal Housing Authority to become a big news item (at least on internet forums). I just recently helped a woman acquire a deed in lieu of foreclosure from HUD. The process is very simple and there are a lot (probably hundreds of thousands) of mortgages sitting in HUD, many of them to seniors. The loan, for which we were seeking a deed in lieu of foreclosure, was a reverse mortgage for $79,500 issued to an 88-YEAR OLD woman on a house with an assessed value for $64,500. The loan was originated by a mortgage originator, subsidiary of Countrywide, that was sold to a subsidiary of Lehman, which was sold to a subsidiary of another bank that went belly up, and finally ended up on the books at HUD, as the loan had been guaranteed by the FHA. This is not the first large reverse mortgage that I have encountered sitting in the finances of people well into their 80s or 90s: all guaranteed by the FHA.
Rober Wagner needs to a make a living. Pimping reverse mortgages seems to be his thing. Didn't he kill his wife?
50% of seniors in their 80s or 90s have some form of dementia: cerebrovascular, alzheimer's, pick's disease, etc... . I would say, of that 50%, 50% were taken advantage of by unscrupulous reverse mortgage pimpers or their own relatives and are actually in substantial debt. Of course, in estate settlements, funeral homes, health-care providers, and attorneys take the first fruits, leaving the rest for other creditors. Fortunately, few people in their 80s or 90s rack up substantial bills at funeral homes or health-care providers, or with attorneys settling multiple claims against a bankrupt estate.
Franklin Raines. Let's have a clawback.
What did that book cooking crook get, something like $90 million?
You reach for the claw.. I'll reach for the guillotine blade.
I think he and Mozillo are at a private country club laughing about how fucking stupid Americans are. Castration is too good.
think stan o'neal is cadding for them? he left with 165MM
someone ought to find that piece of shit and splatter his brains on the sidewalk....
Cut the salary to $50,000 as a nice round number (about median US income). And I'll take a $2MM signing bonus, a cost of living allowance to compensate for the DC area, housing allowance because I gotta live there and can't sell my house back hiome at a loss, executive perks like daily per deim, club memberhsips (I like to golf, so how's about Congressional) chauffered SUV ( they run just fine on Iraqui oil) with a armed guard (the masses are angry at some people for some strange reason) and fuck the references, intrviews, and testimony becasue it might make sure another crook doesn't get the job.
Solutions by Knukles!
You left out: guaranteed carry permit.
Fear not, as of Oct.1st Fannie and Freddie can only insure mortgages up to $625k instead of the previous $730k...wind down these GSE's? Theyre covering 90% of new mortgages. It'll never happen. not soon anyways.
All in the name of making housing affordable. What the fuck? And still most Americans eat this shit up and actually still believe in the criminal world of residential real estate.
hold the phone...start taking away rich peoples easy money and they'll push back. seems they want an extension to the $730K rule.
"There is some support for the measure in the House GOP conference, mostly consisting of lawmakers representing wealthier coastal states with the higher home prices most likely to be affected by an extension (or lack thereof) of the limit increase. Reps. John Campbell (R., Calif.) and Gary Miller (R., Calif.), for example, have urged Republican leaders to support the extension, arguing that the housing market remains too vulnerable to limit federal support at this time. Campbell said in a recent interview with Roll Call that if the new limit is not extended, home prices will “crater, and it’ll be our fault.”
John Campbell (R., Calif.) and Gary Miller (R., Calif.)....make note, these guys are true patriots, hah.
Fucking RINOs. Why should Nebraska, Minnesota, Wyoming, etc. foot the bill for overpriced pieces of shit on the coasts?
Cuz Buffet needs a garage near his Queen Pelousy.
The lower mortgage amount does not limit the house price. Someone buying the $1,000,000+ house should have a big downstroke. Maybe he can get the Fairy Godmother or Aunt Tootsie to take a second.
Inside-traders at Congress are shocked? Yeah, sure they are.
Making a killing as CEO of an insolvent company is mighty trendy...
I've run a loss-making company and tried to turn it around. It's tough. But in the private sector you take wage cuts (or no wages at all) until you turn it around
In the Govt propped up zombie world of bankrupt WS banks and insolvent MF'ing Globals and GSE's you siphon ff millions just before they go down the toilet and siphon off even more while they're still sucking on the States (taxpayers) teets
Rewarding failure ...generously
The worlds gone upside down and inside out... this is what happens when you put the parasites and its monopoly institution, Govt, at the top of the food chain instead of the free market and productive competitive people
And so long as every taxpayer contnues to pay tax and sponsor this sham called Govt, keep sucking on the rotten results while the parasites keep sucking off you ...'Wakey Wakey'
Monopolies are not capitalism. Monopolies kill capitalism. And who can think of two bigger piece of shit monopolies than Fannie and Freddie? No monopoly can exist without the biggest monopoly of all, government. And yet we will have people telling us in the next five years that more government is the solution to our problems. I am saturated with the stupidity.
Spot On.
Kill the monopoly of/on society, Govt, and you kill all the monopolists
Zero Tax = Zero Govt
it's that simple
fukin right......
Back in 2008/2009 we took a 15% pay cut and no paid time off and we were MAKING a profit but did it to make sure we were able to run cash only, no tapping the credit line.
We have since given raises , but only to the very top performers and then only 4-8% , these fukin money losers don't have a clue how to run anything much less make a profit and keep the shareholders happy.
fukin gvt slobs. burn in hell and we pay your salary you useless clown fucks.
"DeMarco added that executives who work at Fannie Mae and Freddie Mac, regardless of how well they perform their duties, "risk tarnish to their reputations" just by working at the firms."
I LOVE THE REV. AL GREEN!
http://www.youtube.com/watch?v=hsU6_eSG4k4
Was Venezuela's gold supposed to be departing London and New York by now ?
There is no reason to count the Freddie/Fannie bonds as US debt, though Orzag (and Obama) would have loved to officially drag them into the status of full-faith-and-credit arms of the government. The firms are wholly private since 1968, receiving only voluntary (laugh) tax-payer support and control. We were assured of this voluntary aspect when they announced that it was not "receivership" but merely conservatorship. Best to let the bonds get marked down, let investors in the non-full-faith-and-credit bonds take the hit, and let the portfolios run down. Oh, and stop insuring new loans if they aren't 20% down, including FHA, Ginny Mae, and VA loans. Go build your RE development fortune on somebody else's dime. It blows my mind that ZH would repeat the conceit that the two GSE's are the tax-payers' responsibility. Ginnie Mae? Yes. Freddie and Fanny? No. It was an utterly corrupt practice for the executives of Frannie to pretend they had to meet the housing goals stated by HUD, while taking bonusses and making dividends totally in line with their private-sector ownership. They were legislatively encouraged to do so only if they could do so while maintaining a sound financial profile. It was a goal, not an order, and the bond-holders knew it. Every time I took the risk to get higher agency interest rather than Treasury rates, I knew I was taking a risk. So did everyone else that bought them. Put the tax-payers first. Don't encourage the big lie.
Where to begin...
You're about 3 years late with the disavow Fannie/Freddie rant. The US has guaranteed the debt. You will be shocked to learn that taxpayers are the owners of Fannie & Freddie, so even if you want to pretend there is no guarantee, as the equity holder taxpayers are on the hook.
The Community Reinvestment Act did require Fannie & Freddie to buy crappy mortgages. Remember, it was Fannie & Freddie, together with an unholy alliance of mostly heavy hitter Democrats in Congress that wrote the wrote the law. That's because the more mortgages they wrote, the more bonuses they could extract from the company and the more political pork they could spoon feed to Barney Frank, et al.
20% down on government backed loans, yes that would be great. Even better, get the government out of the housing loan business all together. Some research years ago, squashed by Fannie's storm troopers, showed that government backing of mortgage loans doesn't actually make home loans any cheaper for consumers.
You mean that criminals cannot provide goods and services efficiently?
Color me shocked.
Meanwhile, all of the efficient providers have been run out of the game.
Heck'uva job, Fannie/Freddie.
The GSEs, as originally operated, were great. They did make home loans more available in many parts of the country and somewhat cheaper. Same with FHA. However, there were reasonably modest, by today's standards, loan limits and real underwriting requirements. It was not until the late 1980s that there was a real MBS market for conventional loans.
It take s the folks in Washington a few years to really screw up a pretty reasonable deal. Barney and Chris were able to finish it off.
I agree with your "even better, get the government out of the housing loan business alltogether."
I don't want to "pretend" that taxpayers are not on the hook. They aren't on the hook. The owners of equity are only on the hook to the amount of their equity. That's what corporations are for. Limited liability. Cite me a statute which guarantees the bonds and certificates and I'll change my view on the two trillion liability as opposed to the equity.
I also cannot find a statutory basis for F/F liability should Fannie and Freddie have decided not to insure or securitize bad loans imprudently, because the relevant statute changing their charters (notwithstanding the HUD guidelines) provided Fannie and Freddie with an out. They simply had to assert the claim that they'd hit the limit of financially prudent risk. They could thereafter miss the quotas without penalty.
I've been quietly making the rant for 3 years. I simply haven't gained the attention of many tax-payers. I understand the incentives of the executives involved. I'm hardly an innocent. For me the biggest fact in the stench (apart from direct Congressional involvement) was that from the beginning of the real-estate run-up in 2001-2 the GSE's were being set up as recipients of bad loans made by, and necessarily sold on by, organizations audited by the same firms that audited the GSE's. Indeed those audit firms were represented on the boards of directors by retired leads of those firms. PW and Freddie comes to mind, from the beginning of the run-up until the collapse.
Taxpayers don't own Fannie and Freddie delisted common equity. The US has not guaranteed the bonds of Freddie or Fannie. It has all been "by implication." Oh, and buying up 10% preferred in exchange for cash. And the GSE's were never required by law to buy lots of qualifying subprime. They were "incentived" to do so by credits from HUD to the extent the GSE's met their "quotas." It's time people stopped playing the "implicit guarantee" game and walk away from these bonds. After all, the Fed is holding mortgage rates down all by themselves these days with their mortgage bond buy-ins.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") revised and standardized the regulation of both Fannie Mae and Freddie Mac. Prior to this act, Freddie Mac was owned by the Federal Home Loan Bank System and governed by the Federal Home Loan Bank Board, which was reorganized into the Office of Thrift Supervision by the Act. The Act severed Freddie Mac's ties to the Federal Home Loan Bank System, created an 18-member board of directors, and subjected it to oversight by the U.S. Department of Housing and Urban Development (HUD).
In 1995, Freddie Mac began receiving affordable housing credit for buying subprime securities, and by 2004, HUD suggested the company was lagging behind and should "do more."[12]
Freddie Mac was put under a conservatorship of the U.S. Federal government on Sunday, September 7, 2008.
It's an easy thing to criticize but I assure you it is an enormously difficult task they undertake.
Dear Timmah,
Give me mo.
Sincerely,
Freddie
So difficult.
Socialism creates the most monopolies. All socialist stooges are put in power of Corporations. That's what socialism/fascism is.
Mr. Kyle Bass teaser on the BBC
http://news.bbc.co.uk/2/hi/programmes/hardtalk/9639507.stm
What's the incentive to be fiscally responsible? Blow all the money and come back for more. Books can be cooked/losses hidden. Nobody goes to jail. Too big to fail, let the taxpayer keep bailing you out,
Just another sign we are close to a bloody revolution.
... well, at least the CEO of a bankrupt quasi-governmental company ...
Used to be just the power was enough to comp pay with all the inside info and kickbacks Now they get six sigma pay for being and acting like the old stupid ass govt workers they always were and are
Fed pay is fucking disgusting
Time to Amend the Constitution to exclude the Corporate 1%:
https://contramanfund.wordpress.com/2011/11/15/occupiers-guide-for-the-9...
"Where does one even start...'
That says it all, that, says it all.
I'm lovin this: (notice the TD quote below video)
http://www.marketskeptics.com/2011/11/60-minutes-blows-the-lid-off-congressional-insider-trading-2.html
It's just the next dog and pony show, where once again, the criminals in power swear to not let the next batch of criminals be successful. It's just another manifestation of Abused Spouse Syndrome amongst the voting class.
And one of the Tyler's fell for it. :P
The FHA has been technically insolvent for 3 years now. Seems like the plan is to ignore it, do nothing, hope knowone notices, and that it goes away. It would be unbelievable in a different time, but now it is just par for the course.
Democracy is dead.. the people need to rise up and .. (insert appropriate word here)
Let it all burn down.
Congress is just glad that it had its insider information to short that stock before it collapsed
[url=http://postimage.org/image/z5qud78j3/][img]http://s11.postimage.org/z5qud78j3/77095_156452407730936_100000985327358...[/img][/url]
I hope this works... if not, sorry - but Maxine said it best...
The deck is stacked in favor of graft and embezzlement. What once was prosecuted as felony offense is now called regulation. Any legislation only finds a new depth of lawlessness.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Poor baby boomers, their greed and avarice is coming home to roost. A life time of shuffling paper has left them dying of money.
I find it somewhere between comical and troubling that while so many here agree that this is nothing short of outrageous, many of those same people expressing said outrage are also ridiculing the OWS protesters who are protesting because they are...fed up with bullshit like this.
What's the thrust here? It's ok to protest as long as you are doing it by posting on a blog but if you have the wherewithal and courage to get up off your ass and go out and physically participate in protesting these outrages then you are a "socialist"?
It's like someone once said: "If you give food to the hungry, they call you a saint...but if you ask why the people have no food...they call you a communist"
The reason OWS gets ridiculed is because most of the protesters are people who took on a bunch of debt to get a shitty go no place degree. And now they want the producers to pay for their poor decision making. Most of us would never agree to the OWS solutions which is giving more power to the government. That's just ridiculous. We all hate the corruption and the bail outs. But the majority of us would be happy if the government would have let all these fuckers fail and prosecuted the criminals.Most of us know the real problem lies with the fed and it needs to be abolished.
And your little quote there.. If I give food it's because of my own free will. But if you empower government to take it and give it to somebody else, well that's just theft by a third party . And that my friend is communism.
As I noted on an earlier ZH post...
Fanny and Freddie were used by the Private Banks as a repository to off load the toxic waste off the banks books to the Taxpayer.
How ? Who Helped? Try this one.
JAMES B. LOCKHART. Jim was the head of Fannie Mae, He oversaw the transfer of debt off the banks books onto Fannies (ie Your Debt and My Debt).
What reward did Jim get for Transfering The Wealth? ( ie Debt from Banks to YOU) ? James B. Lockhart III to become Vice Chairman of WL Ross & Co. You see, for these guys, doing a stint in the Gov or Regulatory agencies is like doing time in the service to their "Country" (ie Corporations).
After doing his stint in Fanny, Jimmy Lockhart was rewarded with a 'retirement' at Wibur Ross's company. 'You did a good job for us Jimmy, You get a corner office and a bimbo secretary with kneepads for the rest of your days.'
http://www.zerohedge.com/article/meet-foreclosure-experts-hair-stylists-walmart-floor-workers-and-assembly-lines-workers-all-#comment-647929
WestVillageIdiot summed it up boys....Just when you think you've heard it all, it gets more stupider. There seems to be absolutely no out-of-bounds for anything, its a frenzied fucking mad grab for whatever you can get. The US is blowing the greatest lead in the history of leads....between suckering the planet into taking Dollars and a serious tech/innovation advantage, you Cannot ask for much more of an edge. Here we are, industry in shambles and the Govt/Banking system in shambles as the laughing fucking stock.
Haldman is just maintaining the status quo.
"Why steal less when you can steal more."
Spencer Bachaus - HEY YOU burn in hell as I am sure you are just dandy with all your buddies getting their ass bailed out by Fred/Fan for all those shit loans they pawned off you corrupt slime of an asshole.
Rot in hell bitch.
To listen to the clowns on the west coast in RE, they would say that the current high prices in RE are justified on fundementals. "It's different there", so to speak. SO why do they need govie support?????? Oh yeah, prior to the RE bubble their home prices were not that far off from more normal places. FUcking idiots........
these wiz kids lost money on derivative bets is my understanding. so that bonus money is going to those that directly lost money. but hey isn't that our system (not that oiws has any real beef). the failures get paid off. you can't loose once in the club, we still have timmy, bernanke, summers is respected add rubin (all should have been hung a long while ago). the lords of walls treet getting baiouts and bonus. treasury paying goldman 100 cens on teh dollar for aig crap. and treasuty making sure aig got their bonus money s(stuck in after midnight by a sneaking dodd for geithner). the list is endless. It's not just these guys. the entire system is rotten to the core (our elected reps included). the endless money aving a system that got the elites their money at my sxpense (see the europ project). no referendums on policies. this is just a symptom
It appears that the Newtster collected 1.2 million off Freddie Mac between 1998 and 2002.