I'd suggest he check the ventilation fan in his shop, first thing tomorrow, lest he end up looking like this.
(Wow, check out the left side of this guy's face too...wonder if McCain is a huffer)
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"It's not that the Democrats are playing checkers and the Republicans are playing chess. It's that the Republicans are playing chess and the Democrats are in the nurse's office because once again they glued their balls to their thighs."
I'd suggest he check the ventilation fan in his shop, first thing tomorrow, lest he end up looking like this.
(Wow, check out the left side of this guy's face too...wonder if McCain is a huffer)
Wow that Harvard MBA is a crackpot. I can't believe he thinks that there are enough berries in the world for all of the cavemen to win. What a freakin retard.
The Wachovia takeover was what regulators call an "open bank" transaction, the first in the current panic. In other words, the regulators didn't wait around for the bank to fail before swooping in and picking up the pieces. Instead, they acted creatively and in concert with a private buyer to remove an ailing bank while minimizing the collateral damage and taxpayer exposure.
In exchange for getting Citi to step in before a collapse, the FDIC agreed to take on some of the risk on $312 billion worth of Wachovia assets. Under the terms announced early Monday morning, Citigroup will be on the line for the first $42 billion in losses in that portfolio. The FDIC would be on the hook for any deeper losses. Citi will give the FDIC $12 billion in preferred stock and warrants as the price for that downside protection.
I believe the issue with existing golden parachute deals is for the company to unilaterally change them is akin to pulling the rip cord and favors the golden parachute'r not the company. Those guys have contracts and to change them materially by this act will just employ the fuck out of lawyers for years.
The best thing would be for all the companies needing a bailout with executives unwilling to voluntarily accept new employment contracts to go broke, and have the government parcel out their good assets to companies who are willing to resolve their legal and personnel contract issues, while the "toxic assets" are taken over by the government. Anyone in the companies that go this path without an employment or compensation contract (aka golden parachute) gets to keep their job with the new entity.
But, don't expect that kind of requirement to be easy or timely. It will do nothing but add roles for the government to fill, if temporarily, and take time, which is probably also not a commodity that is plentiful. Jim
Here is the difference the article apparently considers negligible. The bailout plan spreads the loss to investors across the spreadsheets of all taxpayers, as opposed to those who chose to take the risk.
Unfortunately, these are the banks, providers of credit not only to everyone and their businesses, but also to one another except until recently.
Regardless of the bailout, some bank or small set of banks will end up with the spoils. With the bailout, more banks can survive the massacre and as a consumer/taxpayer, competition is good.
I believe the issue with existing golden parachute deals is for the company to unilaterally change them is akin to pulling the rip cord and favors the golden parachute'r not the company. Those guys have contracts and to change them materially by this act will just employ the fuck out of lawyers for years.
The best thing would be for all the companies needing a bailout with executives unwilling to voluntarily accept new employment contracts to go broke, and have the government parcel out their good assets to companies who are willing to resolve their legal and personnel contract issues, while the "toxic assets" are taken over by the government. Anyone in the companies that go this path without an employment or compensation contract (aka golden parachute) gets to keep their job with the new entity.
But, don't expect that kind of requirement to be easy or timely. It will do nothing but add roles for the government to fill, if temporarily, and take time, which is probably also not a commodity that is plentiful. Jim
I don't think the law has to be any more complicated than this. While I'm glad the house stopped the prior bill, I am upset that it's taking so long for them to get where the people want them to be - which is where you were describing.
Unfortunately, these are the banks, providers of credit not only to everyone and their businesses, but also to one another except until recently.
Regardless of the bailout, some bank or small set of banks will end up with the spoils. With the bailout, more banks can survive the massacre and as a consumer/taxpayer, competition is good.
Any bank which is not illiquid should still be providing credit, using responsible practices, like they always have. It's not like there's a big mystery about where the creditworthiness issue starts and ends. If anyone needs a Bush pep-talk about what the nation's expectations of them are, it's the banking industry.
Congress takes a hard look at marking-to-market By Matt Andrejczak, MarketWatch
Last update: 3:26 p.m. EDT Sept. 29, 2008
SAN FRANCISCO (MarketWatch) - Congress is looking at playing with mark-to-market accounting rules as part of the now-stalled $700 billion-dollar bailout plan for the U.S. financial system.
A provision in the bill, whose adoption was in doubt after the House of Representatives rejected it Monday, gives the Securities and Exchange Commission the right to suspend -- by rule or order -- mark-to-market accounting under Statement Number 157 of the Financial Accounting Standards Board.
The SEC would be allowed to step in front of mark-to-market accounting standards if it was in the public interest and consistent with the protection of investors, the House bill said.
As of Monday afternoon, House Democrats were trying to rescue the failed bill after more Republicans than Democrats opposed it.
Mark-to-market accounting, or "fair-value" accounting, is cited as one of the major reasons for the meltdown in the U.S. banking system. The rule, which went into effect Nov. 15, 2007, forces financial institutions to put a fair value on their assets or liabilities each quarter.
And this year, the accounting rule has wiped out well over $100 billion in asset-values tied to home mortgages and loans issued to finance acquisitions.
Using this method, the value of those assets is determined by what sales-price those assets would fetch in the current marketplace from a buyer, not based on the price a seller would hope to get. This kind of bookkeeping crushed Wachovia Corp. shares Friday.
J.P. Morgan Chase wrote down $30 billion of Washington Mutual's mortgage-related assets when it bought WaMu's banking business last Thursday night. This spooked Wachovia investors since Wachovia held a portfolio of similar mortgage portfolio that had been valued at a higher price. Citigroup acquired Wachovia's banking operations on Monday.
Also in the bill that House leaders are trying to revive: Congress is asking the SEC to conduct a study on what impact mark-to-market accounting has had on the recent bank failures and the balance sheets at financial institutions. A report would be delivered to Congress 90 days after the bailout pass is passed.
Investor Barry Ritholtz, CEO at Fusion IQ, said mark-to-market rules should be left alone.
"It seems to be pulled straight from the Bank of Japan's playbook: Take the right downs later rather than sooner, once the market returns to normalcy. That's a deeply flawed philosophy," Ritholtz wrote on his Big Picture blog.
Other critics included former SEC Chairman Arthur Levitt and Lynn Turner, who worked as the SEC's chief accountant during part of Levitt's tenure.
"To ask for a suspension in fair-value accounting is to ask the market to suspend its judgment," Levitt and Turner wrote in a Wall Street Journal opinion piece. "By reporting assets at what they are worth, not what someone wishes they were worth, investors and regulators can (see) how management is performing."
The bailout package and the fair-value accounting provision may never come to pass.
Monday afternoon House Democrats were hoping to come up with a new plan. Any legislation would have to be adopted by the Senate and then signed into law by President Bush. The Senate was expected to meet this week on the bill.
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