Question;
Regardless of what anyone thinks of bailouts it is clear that holding up the bailout at this point would be immediately bad for markets (markets may very well go down a lot anyway).
The dems seem more focused than republicans (my perception of what I have read and seen) on the issue of CEO golden parachutes. While the idea that CEOs of failed companies should not get a seven or eight figure check on the way out the door is very logical should it hold up the bailout?
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9 comments:
It's really a question of what you think represents the greater stupidity: Trusting that those who got us into this mess in the first place can get us out of it with our hides intact or trusting that those who didn't prevent them skinning us the first time will serve us better now.
Personally I'd rather trust in neither and buy some time to think the problem through via something like the FDIC process; e.g.,
1. Any financial institutions unable to meet their obligations will be taken into federal receivership and run off. Their deposits and other valuable resources may, if desired, be handed over to solvent institutions to strengthen those who have prudently managed their businesses while delivering the appropriate punishment to those who made poor choices or committed outright fraud.
2. Financially solvent corporations with investment-grade credit ratings as of September 20, 2008, temporarily unable to roll their short-term debt due to the market crises, should be able to borrow directly from the Federal Reserve, one time, for up to 6 months, at a rate somewhere between the normal discount rate and that which they were paying on their previous debt.
3. Foreign entities can be included in an asset buyback if and only if the national bank of their respective jurisdiction(s) formally agrees to guarantee the asset(s) involved.
One thing is for certain: Anyone who would trust the administration of George W. Bush with a blank check for any reason is probably someone too stupid to remember to inhale after they gasp for air.
first it is not clear that this bailout will solve anything other than save the remaining investment bankers.
Second, if the republicans did not want to hold the bailout they can very easily agree on no golden parachutes.
Third, this is taxation without representation. I do not recall casting a vote for Ben Bernanke, Hank Paulson, Chris Cox nor any of the CEOs of the investment banks. If my elected representatives want to delay the bailout I am on the side of the elected representatives.
In 2004 the SEC created exemptions for Bear Stearns, Lehman, Merrill, Morgan and Goldman from the 12-1 leverage limits allowing them to leverage up the wazzoo over the next few years.
In 2004, the SEC created exemptions for Bear, Lehman, Merrill, Morgan and Goldman allowing them to pursue naked short selling legally.
In the last 4 years these five paid hundreds of billions of dollars in bonuses to their executives. Money that did NOT go to shareholders.
Since we have given up on capitalism and embraced socialism (or communism) then we may as well go back and get that bonus money and use it for the bailout. Save the tax payers hundreds of billions of dollars.
Morgan Stanley and Goldman Sachs have been baptized as reborn bank holding companies. So, if you squint a bit, you can see all of the gang of five are gone.
Barney Frank's populist demagoguery is disgusting.
Does anyone know the specifics of what Ben & Hank said in the close meeting that scared the crap out of everyone there?
I'm certainly no expert on frozen credit markets, but why shouldn't these banks and institutions be forced to deal with each other by, well, market forces? He went from "let them work it out amongst themselves" to "OK, I was just kidding" in 3 days. I'm not clear how my best interests as a taxpayer are being protected here AT ALL. And I certainly don't trust the foxes guarding this particular hen house to get this right. No oversight, review or judicial accountability? Are we NUTS?
"I hope that you're always going to question everything around you, that you will be skeptical and questioning. Because that's the only way you're going to figure out what's really going on. And that's the only way you'll be successful. Because the conventional wisdom is never the way to the top" Jim Rogers (2004?)
Ok, what color will the globalized currency be?
Regarding the creation of "King Henry":
"Whoever controls the volume of money in our country is absolute master of all industry and all commerce ... and when you realise that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." -- President James A. Garfield, just a few weeks before he was assassinated on July 2nd, 1881.
"Allow me to control the money and I care not who writes our laws"-- Baron DeRothschild
..."should it hold up the bailout?"
Yes!
Or, to put it less succinctly, if the bailout is sooooo critical, should the assurance that a handful of ultrawealthy failed CEOs may receive 7 or 8 figure golden parachutes hold up the bailout?
Absolutely it should hold up the bailout! I find it difficult to believe that this is, in fact, a sticking point. Why should CEO's get millions in taxpayer funds for screwing up and, in essence, destroying our country's economy, and yet there's nothing that helps protect those people who are affected by their actions.
It appears to me that if the true reason for the bailout is to help the economy, then the way to do that is to pass on the aid to the people who are struggling so, not the millionaires on Wall Street who made the mess to begin with.
The free market system will solve the CEO comp. problem. Before you guys get all riled up about it---how would you like congres, especiall THESE guys on the senate banking committee, deciding how much you could make. Besides, this has already started changing.
The simple reason it is even brought up, is it provides fodder to stall the deal. Yes, it is all politics. The dems will stall until the market is down another 2000 pts. It will all be Bush's fault.
The democrats are purposely stalling to make this worse, hoping it will buy them some votes in November.
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