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.
Subscribe to:
Posts (Atom)
