GM has made the Volt the centerpiece of its push to build smaller, more fuel-efficient vehicles and it has spent nearly $1 billion developing the car.Gotta hope that the Volt is worth the investment.. we Americans seem to be on the hook for it as our government pledged another $30 billion yesterday to keep GM afloat.
"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," said Summers, chairman of the White House National Economic Council. "What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is outrageous," Summers said.Like it or not AIG has the US taxpayer over a barrel.. our congress gave them a boatload of cash before we read the fine print.. AIG played us well. The AIG CEOs' letter seems to be a reactionary response to Geithner's phone call.. I am sure that he would have done nothing before the call.. maybe this personal approach is just what these folks need? Maybe President Obama needs to make the next phone call? Maybe we all need to give him a call and express our outrage?
In a phone call Wednesday to AIG CEO Edward Liddy, Treasury Secretary Timothy Geithner said it was unacceptable for the company to give out tens of millions of dollars in bonuses for senior executives after the government committed $170-billion to keep the struggling company afloat -- far more government bailout money than has been awarded to any other firm.
In a letter to Geithner Saturday, AIG's chairman and CEO agreed to restructure some of the payments. But Liddy wrote, "quite frankly, AIG’s hands are tied," arguing the firm would risk a lawsuit if it scrapped the bonuses.
Liddy also wrote the government's demands could affect AIG's ability to retain "the best and brightest talent to lead and staff the AIG businesses" if "employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."
Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.It appalls me that President Bush and the US congress (both sides of the political aisle including then Senator Obama) doled out all of that cash last fall with no stipulations on how it would be used. On the flip side, the greedy actions of corporate execs giving themselves these outrageous bonuses give Calvinists more evidence of the total depravity of man.
That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.
While the payouts paled next to the riches of recent years, Wall Street workers still took home about as much as they did in 2004, when the Dow Jones industrial average was flying above 10,000, on its way to a record high.
Some bankers took home millions last year even as their employers lost billions.
Senators Richard Shelby of Alabama and Jon Kyl of Arizona said it would be a mistake to use any of the Wall Street rescue money to prop up the automakers. They said an auto bailout would only postpone the industry’s demise.I tend to agree with the senators. How about you?
“Companies fail every day and others take their place. I think this is a road we should not go down,” said Mr. Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee.
“They’re not building the right products,” he said. “They’ve got good workers, but I don’t believe they’ve got good management. They don’t innovate. They’re a dinosaur in a sense.”
Mr. Kyl, the Senate’s second-ranking Republican, added, “Just giving them $25 billion doesn’t change anything. It just puts off for six months or so the day of reckoning.”
Troubled financial giants getting cash infusions from the U.S. Federal Reserve owe their executives more than $40 billion for past year's pay and pensions as of the end of 2007, the Wall Street Journal said in an analysis.Here is hoping that wisdom will reign in DC and wealthy executives will not benefit from the government's ginormous bailout.
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The Journal also cited investment banks Goldman Sachs Group Inc (GS.N), which owes its executives $11.8 billion; JPMorgan Chase & Co (JPM.N), which has a payment of $8.5 billion pending; and Morgan Stanley (MS.N), which owes between $10 billion and $12 billion to executives.
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But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces, the Journal said.
I saw Jim Cramer (pictured right) on the Today Show where he acknowledged his apology for recommending that viewers of his "Mad Money" TV show buy Wachovia stock just two weeks ago - a recommendation that he acknowledged was spurred by the appearance of his longtime friend and former boss, Wachovia CEO Bob Steel, on his program. Mr. Cramer has been an advocate of the 700 billion dollar US government bailout of Wall Street.WaMu's new CEO, Alan Fishman, might go down as the ultimate showcase of executive greed if he doesn't do the right thing in the next few days. After just 432 hours on the job -- during which time he presided over the complete collapse of the company -- Fishman stands to collect more than $19 million in pay.I don't know about you but when I read this stuff I think that people like Treasury Secretary Hank Paulson (one time CEO of Goldman Sachs) just don't get it and are not the right people to be formulating a fix to this Wall Street crisis.
That's right: $19 million for 18 days work, or an annualized rate of $385 million. $1.05 million per day. $44,000 per hour. More money than most people will make in several lifetimes, all to watch one of America's largest banks spiral into failure.
Here is how I responded to Brian's post on the Bailout:I think that leadership on this bill came from main street Brian. Many DC politicians are afraid of the backlash of voting for this bailout.. especially the ones that are up for re-election.Of course, if you can believe this, Congress unbelievably did bailout Detroit last Saturday to the tune of 25 billion dollars.. wonder why we haven't heard more about it?
My thinking is that they need to take their time on this legislation and get it right.. the word of the day should be patience not expediency.
I think that wisdom might come if our congressional leaders stand up to the pressure to get-er-done and find a way to insure that the interests of American taxpayers are at the heart of legislation.. the bill needs to protect Main Street and not Wall Street.
A few excerpts from this Christianity Today interview with Christian author and financial guru Dave Ramsey on the $700 billion plan for the government to purchase troubled mortgage assets.What do you think of the bailout?Regardless of your take on this enormous bailout I think that you will agree that the congress needs to slow down and take a more thoughtful measured reaction to this Wall Street crisis.
I think it's a disaster. It's the largest government department ever formed in the history of man, and they are doing it in five days, and they are doing it based on a spirit of fear.
There are other things we could be doing to calm markets. All of the Bush administration appears to be in a dead dog panic. I'm afraid it's going to pass, but that doesn't mean we're going to like it.
What do you recommend instead?
Change the market accounting rules. Do away with the capital gains tax, which will cause money to flood into the market instantaneously in 24 hours. Last, if we do need to do some insurance of some of these bonds, we can insure them rather than just buying them all. Only 7 percent of them are in foreclosure, while 93 percent of them are paying, so why are we buying them all—so we can make Paulson king?
