“The truth is, through criminal neglect and competence, the people at the
top of these firms chose to look away, to take more risk, to enrich themselves
and to put shareholders and indeed, the country itself and the country’s
economy at risk. It is truly not only a shame, it is a crime” – 60 Minutes
Forget the blame game, forget the justified rants of anger. US taxpayers were asked to risk $700 Billion for a Wall Street bailout that may not even work – but do they really know why?
The rest of the world has been swept up in this crisis, with citizens all over the world afraid their banks are going to shut down – but do they really know why?
I’ll get to the why in a second.
In the meantime, as the world sweats, CEO’s at Lehman, Bear Stearns, AIG, Fannie, Freddie, etc., etc. each walked away with tens and even hundreds of millions of dollars in cash and stock. Lehman CEO, Richard Fuld, himself walked away with $480,000,000 (yes, 480 million) since 2000. That equates to $60,000,000 per year for a guy that drove Lehman into bankruptcy and significantly contributed to the current crisis.
Yes, Fuld “feels horrible about what happened” but I suspect $480,000,000 goes a long way towards treatment of his horror.
Other CEO’s that feel horrible:
Stanley O’Neal, Merrill Lynch’s former CEO, took home compensation with an estimated value of $145.2 million from 1997 to 2007, according to Equilar. Sorry, forgot to add that he received a $161-million retirement package when he was ousted in October.
Kerry Killinger, who last month lost his job as CEO of the failing Washington Mutual, took home pay valued at $98 million, Equilar said.
THE WHY
They all did it by selling garbage they knew would not pay – and then selling insurance against the garbage that they knew they could not cover. To avoid regulation, they didn’t call it “insurance”, they called it a “credit default swap”.
How big is the market for credit default swaps? $50 – 60 TRILLION dollars. We can’t be sure because it is an unregulated market.
In short, they were smart enough to create a $50 Trillion industry and call it something that would escape regulation – but they couldn’t see the implosion coming?
How about this – they just ignored it for as long as they could collect $60,000,000 per year and then F$%K everybody else when it all collapsed because “I got paid”.
Thanks to Paul Kedrosky, who found this fantastic 60 Minutes segment that you absolutely need to watch. In case you never thought about it, had any doubts as to Wall Street’s guilt, or simply needed the hard evidence/info necessary to back up your claims, this is the video to watch. A great use of 12 minutes of your time.
UPDATE: One small but juicy piece of good news is that Richard Fuld was knocked out cold at a gym by one hell of a pissed off investor. One punch and out.
UPDATE 2: October 9th and Dylan Ratigan of CNBC is very pissed on CNBC after Dow falls 680 points … wants people to go to jail. Welcome to the club Dylan, we’ve got jackets!
Regards,
George
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I still do not understand all the hype about taking away executive pay packages. What needs to be taken away is the executive’s ability to issue themselves stock options for pennies and then exercise the options and take home a hundred million dollar payday every 3 to 6 months. That is the real SCAM!!!
Hey, folks, wake up:! This Crisis has been ENGINEERED — just like 1929 Stock Market Crash, and all the others before and since. Follow the money.: Rothschilds, Morgans, Warburgs, etc. The Multinational Banksters are (trying to) rake in their chips. This crisis started in 1913, if not before, when we got the FEDERAL RESERVE BANKSTERS; and shortly after: the IRS. Who ULTIMATELY owns the mortgages – of the homes where the folks are being forced onto the streets? Don’t panic; ask your neighbor for some food, some shelter, some love — OR Give some. The folks at the top have to fall, but in the mean time, the system they have created must bite the dust. God still loves us. Forgive the bastards, but let ’em FALL!!!!!!!!!!!!!!!
Well, at least we can sleep easy knowing that all that money goes for a good cause: http://abcnews.go.com/Blotter/story?id=5973452&page=1
Response to RL:
“Aside from putting the U.S. Economy in ruins, what (if any) personal ramafacations will these execs face? I think there should be an investigation and/or tribunals set up in order to get to the bottom of this mess. They must be held accountable, so that we never have a repeat of this situation.”
I agree but if Fuld and all these other CEO’s are walking away from this burning wreck unscathed, it might imply that they may have served superior purposes….
(First, sorry for any mistakes in my translation from the Dutch to English).
… It was better for the most people to dream about everything that couldn’t…
Just for the record, I’m also not become better of this whole crisis situation..!!
The fingers are now only pointed to the people of whom we find they are responsible for the whole situation, we think that they have only worked with dollar signs in their eyes.
…But let us know that we are all responsible for our own enrichment behaviour.
A much too expensive house (or a second house) with unnecessary luxury,… an oversized car (or a second one).
Many people have lived like a little child in a candy store and thought “the sky is the limit”.
Everyone knows that you must first be able to pay your first necessary of life before you…… But no….., all we want is Luxury!!!
…Where the most people are only allowed to dream of, has become to a nightmare, …. A nightmare that we all could have foreseen.
… This kind of enrichment behaviour is abused by other greedy people.
But the world wouldn’t listening to people who already saw signs of the current mess (like child’s who wouldn’t listen to their parents who are trying to protect them for making any errors), …
Let us try together to create a good basis and ensure that this couldn’t happen again!
…Dreaming of something, you would like to have, could be also very nice.
Gr. jwdv
I keep hearing ( the governments bailing them out ) or ( the government’s is paying 700 billion) NO THEY ARE NOT. This is our money, the taxpayers, the government is not a whole seperate entity onto itself. We the people are the the government and the citizenry, our elected officials are supposed to act in our ( the people ) best interests. Just as much as these greedy CEO’s, these politicions that are tied to the hip of the large corporations must be held accountable.Can we the people expect to receive a check every month including interest from these banks and insurance companies, will we receive a copy of a loan agreement for this money, will we hold lein rights to the properties that these banks and insurance companies own to secure our loan to them. We all know the answers to these questions, this too after time will be swept under the rug and we the people will be left with the tab.
Thanks George. Most enlightening. I didn’t realize the scope of the problem; that these companies would cover themselves with naked insurance deals that were called something other than insurance so as to avoid being regulated. That’s criminal.
I hope Americans pass the link to this clip from ’60 Minutes’ onto their representatives. I hope these CEOS end up going to jail. Regretfully, the damage is already done. How many years will it take to recover?
fw
This bail out was only to help Bush’s friends,the ones that use him as puppet
Governments won’t care to help their own people,if they did care, they would keep the jobs in the Country,they would provide free health care,forgive the loans to working class .
What we seen was reward the CEO’s, they should be inside the cage and throw the key way.
No justice what so ever.
Mr r pickell is either stupid or a criminally neglectful ceo. totally selfinflicted as stated in the clip.
what avenues are open to prosecute?
THANKS
Bill
Hi George,
These people, i.e., the CEO’s, Fed officials, top Politicians etc., are all tied to the same stick. All are to blame. The lawmakers are either retarded or purposely turned a blind eye to what has been happening during the past years. Any politician worth his or her’s salt should have been screaming loud and doing something about this long before it developed into this mess.
I suppose it could be said that the voting public is to blame because they didn’t lobby the politicians.
And . . . let’s not forget . . . we need more Ron Paul’s in this world.
Good to see that I’m not the only one feeling this way. I know there are FBI investigations underway and can only hope and pray that the likes of Richard Fuld spend a few years in jail and coming out with no more than 1% of their personal windfall created on the backs of global citizens.
Please make sure to forward this blog post to your respective e-mail contacts.
Regards,
George
George:
I couldn’t agree more with your view on this. Martha Stewart went to jail for peanuts compared to this so why shouldn’t these criminals be sent to jail for much longer and have their ill-gotten gains confiscated? They have stolen money, peace of mind and created hardships for millions of people and they need to pay for this if only to make their successors think twice before engaging in similar criminal activity.
Ulrich
Aside from putting the U.S. Economy in ruins, what (if any) personal ramafacations will these execs face? I think there should be an investigation and/or tribunals set up in order to get to the bottom of this mess. They must be held accountable, so that we never have a repeat of this situation.