Can you believe this: the government restructures its loan/investment in AIG and the first thing AIG plans to do is pay out tens of millions of dollars in bonuses, etc. Are these people nuts; or just incredibly greedy???
Of course, their argument is that they need to pay these incredible awards in order to keep good talent. Well there are at least two things very wrong with this kind of thinking: (1) in every industry every year executives plan to leave for another job just AFTER they receive their annual bonus; and (2) the people receiving these awesome rewards are the very same people who made the decisions that got AIG into this mess in the first place!
This whole meltdown mess is driving me nuts. I take no comfort in the fact that the G20 leaders gathered to discuss how to avoid a global recession, or worse. In fact, they plan to reconvene in April, 2009. How bad could things get by then?
But, I suppose we can take some comfort in that there is movement on naming the members of the US Oversight Committee. Yesterday, the Democrats named their 3 nominees. However, the Republicans have not named their 2 nominees as yet. Until there is a full committee named and approved, the Oversight Committee will continue to do nothing. This situation just gets crazier and crazier every passing day.
Lord knows what next week will bring.
Sunday, November 16, 2008
Thursday, November 13, 2008
The Hits Just Keep on Coming!
Every day brings more bad news about the financial markets. Consider the following: retailers crashing; auto industry near collapse; foreclosures mounting; personal savings eroding; jobless claims hit 7-year high; world stock markets in complete turmoil; and on and on and on.
American Express turns into a bank holding entity so it can gain access to some of the billions in bailout funds! And, AIG says the original $125 billion in loans just isn't enough to straighten them out so the government reworks the package and increases the amount to $150 billion!!
But the worst news of all hits today. The Washington Post reports that "no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste"!
Frankly, I find this to be absolutely astounding! Who in their right mind would think it appropriate to hand over in excess of a trillion dollars of government money without anyone designated to check on what's happening and report to the American people. Secretary Paulsen may be brilliant (although I have my doubts about that), but someone should be keeping tabs on what he is doing and how he is making his decisions.
As I said in an earlier post, what we have here is a credibility crisis! Until our leaders do something to restore the credibility of this process it has little chance of succeeding. High credibility wins! But, a lack of credibility usually leads to disastrous results.
American Express turns into a bank holding entity so it can gain access to some of the billions in bailout funds! And, AIG says the original $125 billion in loans just isn't enough to straighten them out so the government reworks the package and increases the amount to $150 billion!!
But the worst news of all hits today. The Washington Post reports that "no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste"!
Frankly, I find this to be absolutely astounding! Who in their right mind would think it appropriate to hand over in excess of a trillion dollars of government money without anyone designated to check on what's happening and report to the American people. Secretary Paulsen may be brilliant (although I have my doubts about that), but someone should be keeping tabs on what he is doing and how he is making his decisions.
As I said in an earlier post, what we have here is a credibility crisis! Until our leaders do something to restore the credibility of this process it has little chance of succeeding. High credibility wins! But, a lack of credibility usually leads to disastrous results.
Thursday, October 30, 2008
What we have is a Credibility Crisis!!!
The worldwide credit crisis is really a horrendous credibility crisis. No one trusts the government. No one trusts the financial institutions. And, hardly anyone trusts anyone else. All this adds up to a credicility crisis!
When our venerable institutions lose all credibility with virtually everyone you see the meltdown we are now experiencing. And, worst of all it seems we are now finding out that the deal that Secretary Paulson "sold" Washington on is nothing more than a federal giveaway to his rich buddies.
Can you believe the audacity it takes to ask for a handout of billions of dollars and then turn around and hold a ridiculously lavish party (see AIG and $463,000) while claiming that doom is upon us if we don't rescue them from their own greed? That take real gumption (or whatever word you like) where I come from!
Today I read that some of the banks that received funds from the bailout are now going ahead and distributing dividends!!! I was taught that dividends could only be distributed to shareholders from profits. How does a "loan" from the government count as profits???
We have truly fallen through the looking glass into Wonderland where very little is as it once was. In my universe high credibility wins. Perhaps the lack of real trustworthiness and greed leading to the destruction of credibility has put us where we are.
But, in the final analysis the organizations that work to restore their public credibility will win in the long run. The only problem is that it will take years after the current debacle.
The worldwide credit crisis is really a horrendous credibility crisis. No one trusts the government. No one trusts the financial institutions. And, hardly anyone trusts anyone else. All this adds up to a credicility crisis!
When our venerable institutions lose all credibility with virtually everyone you see the meltdown we are now experiencing. And, worst of all it seems we are now finding out that the deal that Secretary Paulson "sold" Washington on is nothing more than a federal giveaway to his rich buddies.
Can you believe the audacity it takes to ask for a handout of billions of dollars and then turn around and hold a ridiculously lavish party (see AIG and $463,000) while claiming that doom is upon us if we don't rescue them from their own greed? That take real gumption (or whatever word you like) where I come from!
Today I read that some of the banks that received funds from the bailout are now going ahead and distributing dividends!!! I was taught that dividends could only be distributed to shareholders from profits. How does a "loan" from the government count as profits???
We have truly fallen through the looking glass into Wonderland where very little is as it once was. In my universe high credibility wins. Perhaps the lack of real trustworthiness and greed leading to the destruction of credibility has put us where we are.
But, in the final analysis the organizations that work to restore their public credibility will win in the long run. The only problem is that it will take years after the current debacle.
Monday, April 21, 2008
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