While many are out of jobs or struggling to make ends meet some are raking it in.
In the last few months we have heard over and over again how the financial institutions that were on the brink of collapse decided to reward top executives with huge bonuses worth million of dollars.
The good times also apply to Fannie Mae and Freddie Mac who were in the middle of the mortgage mess. Both mortgage finance giants have been under government control since last year.
According to CNN Money:
“Fannie Mae CEO Michael Williams, who was promoted to CEO on April 21, will receive about $4.2 million in base salary and deferred cash payments for his time in the top job. The filing does not detail how much he was paid for his time as chief operating officer before his promotion, or what he will earn in 2010.”
The NYT published an article about Goldman Sachs and their creation of complex mortgage related securities and selling them to their top clients.
Other financial institutions including Morgan Stanley and Deutsche Bank also created similar securities.
The problem is that these institutions created these securities so that they could bet against them in case the mortgage market imploded. Basically they sold short.
Goldman clients including “Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments.”
Meanwhile Goldman raked in the profits first on the fees they collected on selling these securities to their clients and then on their bets that these securities would tank, which they did.
“How these disastrously performing securities were devised is now the subject of scrutiny by investigators in Congress, at the Securities and Exchange Commission and at the Financial Industry Regulatory Authority.”
“..authorities appear to be looking at whether securities laws or rules of fair dealing were ..continue reading
The Republicans and FOX (aren’t they the same thing?) have the answers for increasing jobs and helping the economy.
Cut the minimum wage and eliminate unemployment benefits.
FOX is pushing the “cut the minimum wage” as a solution to the job problem even though almost every study done on the correlation between minimum wage increases and job loses shows that it has no effect and in fact increasing the minimum wage has expanded jobs in some areas.
Onto the next Republican idea to spur the economy.
Yesterday Michael Steele, RNC chairman appearing on NBC suggested that in order to get banks lending to small businesses the unemployment tax should be cut.
“Well, I think, first off, he should recognize that banks aren’t going to lend money to people who can’t pay them back. … So there’s — there’s this whole cycle of not understanding exactly how the ..continue reading
An article in this week’s BusinessWeek titled “Wall Street Plays Hardball” makes it clear that the taxpayers are taking a hit, again.
“Wall Street targeted cities big and small with risky financial products that promised to save them money or boost returns. Investment bankers sold exotic derivatives designed to help municipalities cut borrowing costs. Banks and insurance companies constructed complicated tax deals that allowed public utilities, transit authorities, and other nonprofit organizations to extract cash immediately from their long-term assets. Private equity firms, pointing to stellar historical gains, persuaded big public pension funds to plow billions of dollars into high-cost investments at the peak of the market. Many of the transactions shared a striking similarity: provisions that protected the banks from big losses and left the customers on the hook for huge payouts.”
“Now, as many of those deals sour, Wall Street is ramping up its efforts to collect ..continue reading
Talking about something that is annoying… The constant barrage of anti-Republican and highly political messages here! Don’t get me wrong. I don’t like the GOP… I don’t like Sarah Palin but it would be nice to see basic annoying topics here like…. Shoe laces that never stay tied or the call procedures at the DMV.. I’ve been a member of this site for 6 months and joined because I loved the inane annoyances.. For political banter I can go to CNN.com, the Onion, The SmirkingChimp, Buzzflash, NewsMax…. and the list goes on… Leave politics where they belong.. on their own trashy sites….