WaMu Fails. First major comercial bank to go.(online.wsj.com)
online.wsj.com
WaMu Fails. First major comercial bank to go.
http://online.wsj.com/article/SB122238415586576687.html?mod=special_page_campaign2008_mostpop
14 comments
$7.5 million signing bonus? What kind of board of directors would approve such a retarded amount?
The guy would have taken the CEO job without the bonus; it serves zero purpose to the shareholders to give him $7.5 million.
Why don't companies base executive compensation on performance? Doesn't that seem logical?
The guy would have taken the CEO job without the bonus; it serves zero purpose to the shareholders to give him $7.5 million.
Why don't companies base executive compensation on performance? Doesn't that seem logical?
It seems logical, but the problem with basing executive compensation on company performance is that, in a public company, it just incentivizes the executives to chase quarterly profits at the expense of medium- to long-term goals. This means that executives will do anything they can to pump up quarterly numbers, especially if they know that their tenure at the helm of their company is fairly finite.
In a public company, the pressure to chase quarterly profits exists anyway because of the shareholders. If company A does something of questionable morality or risk, but it nets their shareholders a lot of value, it gets hard for the executives at company B to say 'no' to the strategy, even if they know better.
My suspicion is that this is why some companies start out as good and are later perceived as evil. The game changes once you have legal fiduciary responsibilities to shareholders. It seems to me that it can get very hard to defend your strategy of not maximizing profits when others around you are raking it in.
My suspicion is that this is why some companies start out as good and are later perceived as evil. The game changes once you have legal fiduciary responsibilities to shareholders. It seems to me that it can get very hard to defend your strategy of not maximizing profits when others around you are raking it in.
indeed, corporations are in legal terms considered with legal equivalence to an individual, and a public traded company is legally bound to maximise shareholder profit, we have basically created a legal psychopath, they're (the board, ceo etc) legally bound to do anything within the law to generate profit/growth. As you say, hardly surprising that companies with mottos like 'do no evil' end up censoring bloggers in the PR of China.
I've heard this argument a lot and it seems like a solvable problem:
Put the money in a 5 years escrowed account. If the changes that you made were sound and the company continues to succeed, you get it. Otherwise, you forfeit.
Put the money in a 5 years escrowed account. If the changes that you made were sound and the company continues to succeed, you get it. Otherwise, you forfeit.
What you've just described is a stock option. This is an extremely common form of executive compensation. The problem is that it incentivizes greater (and potentially dangerous) risk taking. Greater risks increase the probability of large payouts and losses. But if there's a great loss, the CEO still makes the base salary -- he can't be held financially responsible for all the company's losses. So to the executive it doesn't really matter whether the company loses small or loses big. But there's a big difference between winning small and winning big.
They do this anyway.
In China these people would be executed. If I remember correctly that's what happened to the CEO of the company that made all that bad pet food. I'm not saying we need to gather a lynch mob or anything, but we certainly need some kind of balance between that and the fake outrage we have in this country. I don't think jail time would be unreasonable for executives that, through gross negligence, run economy-critical businesses into the ground.
I think it's fairly telling about how bad our situation is when we start comparing our options versus what the Chinese would do... and we use the Chinese option as the POSITIVE side of the argument.
You should have start doing long time ago... savings (China) vs. "deficits don't matter" (USA), being the biggest creditor in the world (China) vs. being the most indebted nation to foreigners in the history of the man-kind (USA)... production and underconsumption (China) vs. spending on credit and overconsumption (USA).
Your situation is bad exactly because you are not paying attention to this how to build an empire (China) vs. collapse one (USA).
Your situation is bad exactly because you are not paying attention to this how to build an empire (China) vs. collapse one (USA).
Why is it so hard to figure out that certain executives command a certain pay? If Wamu paid less, they wouldn't get the guy they are looking for. It's supply and demand. There are a certain number of top executives when it comes to these searches. Just like top athletes or actors. It's not like these Boards are arbitrarily picking someone from the mail room and giving them $19m.
It's more like they are arbitrarily picking someone from their circle of friends at the country club and giving them 'reasonable compensation'.
Beyond that the board wants to reassure themselves that they are making good decisions, consequently they can justify a slightly larger payday for the new CEO on the grounds that since they are such fine people they have hired an above average CEO and should pay him slightly more than the median compensation for Executives in comparable companies...
Beyond that the board wants to reassure themselves that they are making good decisions, consequently they can justify a slightly larger payday for the new CEO on the grounds that since they are such fine people they have hired an above average CEO and should pay him slightly more than the median compensation for Executives in comparable companies...
Bullocks.
Acting like Fishman was appointed CEO just because he was a friend of the board is completely false.
He was preivously the CEO of two other banks: Sovereign Bank and Independence Community Bank. He has 25+ years experience as a senior executive in banking.
Acting like Fishman was appointed CEO just because he was a friend of the board is completely false.
He was preivously the CEO of two other banks: Sovereign Bank and Independence Community Bank. He has 25+ years experience as a senior executive in banking.
the problem of choosing a good leader hasn't been solved by humans yet.
This is a gross simplification. Good leaders do exist. The real problems are politics and corruption, which happen to run rampant in...well, politics and public companies. These areas are where the "problem of choosing a good leader" is most pressing.
It would work out nicely if every leader thought leading was so fun that he'd do it for free. Berkshire Hathaway chooses its managers in this way. The people they hire seem to enjoy building something rugged.
Unfortunately, many leadership positions just aren't fun enough for this to be a viable option. And it's not even just a question of choosing the right man for the job. Public companies are notorious for their ruthless owners (the market), which often require different things than what would be necessary for long-term growth and stability. Even if all shareholders were interested in the distant future, the market is nothing if not a committtee. Necessary decisions are sometimes unpopular. No one who masters his craft (in this case domain-specific leadership) wants to be bogged down with politics, but this is exactly what public companies offer.
Hence, these positions attract the wrong type of people - those who are attracted to money or power. The 'right man for the job' is probably enjoying a tenth of the salary leading some small company somewhere, because leading a large market-exposed company just isn't worth it. It's not just a question of choosing the right guy and writing him a big check; he might not want the job.
It would work out nicely if every leader thought leading was so fun that he'd do it for free. Berkshire Hathaway chooses its managers in this way. The people they hire seem to enjoy building something rugged.
Unfortunately, many leadership positions just aren't fun enough for this to be a viable option. And it's not even just a question of choosing the right man for the job. Public companies are notorious for their ruthless owners (the market), which often require different things than what would be necessary for long-term growth and stability. Even if all shareholders were interested in the distant future, the market is nothing if not a committtee. Necessary decisions are sometimes unpopular. No one who masters his craft (in this case domain-specific leadership) wants to be bogged down with politics, but this is exactly what public companies offer.
Hence, these positions attract the wrong type of people - those who are attracted to money or power. The 'right man for the job' is probably enjoying a tenth of the salary leading some small company somewhere, because leading a large market-exposed company just isn't worth it. It's not just a question of choosing the right guy and writing him a big check; he might not want the job.
For example: George W. Bush
LOL, funny I lost karma for saying that.. :)
GW picked a great leader: Dick Cheney
depends on perspective. dick has been great for GW's self interest, I'm not so sure about how great he's been for the country though
Sorry. The snark I feel is never the snark you read. I made a pretty borderline comment anyway.
Must remember </sarcasm> tag
Must remember </sarcasm> tag
What kind of board of directors would approve such a retarded amount?
A board of directors in a state of panic. Note that Mr Fishman was serving as Chairman at the third largest mortgage brokerage in the country (who do commercial, industrial and multi-unit residential deals - not sub-prime stuff) - not the type of job to leave for a company about to go under without big incentives.
A board of directors in a state of panic. Note that Mr Fishman was serving as Chairman at the third largest mortgage brokerage in the country (who do commercial, industrial and multi-unit residential deals - not sub-prime stuff) - not the type of job to leave for a company about to go under without big incentives.
The kind of board of directors who know what the rest of the market is paying? If you want a certain caliber of employee of any kind, you have to lure them with at least what they'd get elsewhere. It only seems out of joint because the dollar amounts are higher than in (e.g.,) software, but it's the same principle.
That's $159,166 an hour.
well maybe the guy will have some honor and will do what the AIG ceo did and refuse the golden parachute
They didn't expect to fail, at least not so quickly (but then again, I'm not much of a conspiracy theorist)
It's certainly possible Fishman will decline to take some or all of the compensation, like one of the other failed institution's CEO (can't remember which now)
It's certainly possible Fishman will decline to take some or all of the compensation, like one of the other failed institution's CEO (can't remember which now)
I know it's probably a stretch to ask this, but: is there a Republican in the house?! Can you please explain to me how it is even remotely morally OK to pay people this much money to do what basically amounts to jack shit?
I'm a former Republican, and I used to say two things:
(1) it's none of our business whether a private citizen is earning $10 or $10,000,000;
(2) supply and demand produces, over the long run, an optimal distribution of resources, because a society's needs (i.e. for goods and services) and abilities (i.e. the ability to provide those goods and services) need to be matched in a way that reflects the actual priorities of that society.
It's hard -- probably impossible -- to justify Wall Street compensation packages on supply-and-demand grounds. In the 70s, CEOs earned about 30 times the earnings of their workers. By 2007, they earned 344 times the average pay of their workers.
CEOs do not provide 10 times the value they produced in the 70s. They are not 10 times more scarce. Corporations are not 10 times more profitable. They are not 10 times more prosperous by any measure -- if they were, they would offer 10 times more compensation, on average, to everyone at their company.
So if I were still a Republican, I'd probably say something like this: banks like Bear Stearns were irrational, and they should pay the consequences. The fewer bad banks we have, the better it is for all of us in the long run.
I don't know how many Republicans would agree with that last bit. Truth be told, most of them aren't even pro-free-trade. They're just anti-socialist. Anything that sounds like socialism sends them running for the hills. "Supply and demand" are useful to them only as a cudgel with which to attack the socialist view.
And this sort of justification is trumpeted only by the educated, Wall-Street-Journal-reading elite of the Republican party. Their popular support base in rural areas couldn't care less about economic issues.
It's hard -- probably impossible -- to justify Wall Street compensation packages on supply-and-demand grounds. In the 70s, CEOs earned about 30 times the earnings of their workers. By 2007, they earned 344 times the average pay of their workers.
CEOs do not provide 10 times the value they produced in the 70s. They are not 10 times more scarce. Corporations are not 10 times more profitable. They are not 10 times more prosperous by any measure -- if they were, they would offer 10 times more compensation, on average, to everyone at their company.
So if I were still a Republican, I'd probably say something like this: banks like Bear Stearns were irrational, and they should pay the consequences. The fewer bad banks we have, the better it is for all of us in the long run.
I don't know how many Republicans would agree with that last bit. Truth be told, most of them aren't even pro-free-trade. They're just anti-socialist. Anything that sounds like socialism sends them running for the hills. "Supply and demand" are useful to them only as a cudgel with which to attack the socialist view.
And this sort of justification is trumpeted only by the educated, Wall-Street-Journal-reading elite of the Republican party. Their popular support base in rural areas couldn't care less about economic issues.
What does Republican have to do with it?
Look at who gets the money from Wall Street. Why? Big biz loves regulation that it can control. (When buying and selling is regulated, regulators are the first thing that will be bought and sold.)
FWIW, Sen Clinton does very well but Sen Obama is clearly at the top of the class. In three years, he got more from Fannie and Freddie than Clinton did in 8 and almost as much as Kerry did in 20. The highest 20 year total is Dodd, but Obama would have passed him by the end of his full term as Senator.
Meanwhile, Barney Frank is still out there arguing that we should be giving mortages to folks who can't pay them.
Look at who gets the money from Wall Street. Why? Big biz loves regulation that it can control. (When buying and selling is regulated, regulators are the first thing that will be bought and sold.)
FWIW, Sen Clinton does very well but Sen Obama is clearly at the top of the class. In three years, he got more from Fannie and Freddie than Clinton did in 8 and almost as much as Kerry did in 20. The highest 20 year total is Dodd, but Obama would have passed him by the end of his full term as Senator.
Meanwhile, Barney Frank is still out there arguing that we should be giving mortages to folks who can't pay them.
I ask because they are the only ones who (in my personal experience) try to justify 8-digit salaries.
Find a prominent Dem who has advisors who have turned down an 8 digit salary. (Obama has at least two who took at least 8 digits from Fannie/Freddie.)
Never confuse publicity with policy.
Never confuse publicity with policy.
Because the shareholders, the owners of the company, are free to piss away their money as they so choose.
I think there is an argument to be made for better, more transparent corporate governance rules, that would make it easier for the shareholders to say "uh, no" to stuff like this, but it's ultimately their money.
(BTW, I am not a Republican).
I think there is an argument to be made for better, more transparent corporate governance rules, that would make it easier for the shareholders to say "uh, no" to stuff like this, but it's ultimately their money.
(BTW, I am not a Republican).
The shareholders are not making these decisions (directly), the Board of Directors is. And who is on the BOD? Why other CEOs who expect their actions to be reciprocated. This is [logrolling](http://en.wikipedia.org/wiki/Logrolling).
The talk about short term profit taking being driven by the market is BS as well. If a company were to take actions that would depress its earning in the short term for the sake of (demonstrable) long term growth and profits, the smart segment of the market would recognize that and respond favorably.
One partial solution: outlaw stock options in publicly traded companies. Use cash bonuses and have the usual Employee Stock Purchase Plan that provides a 15% discount on investing in the company.
The talk about short term profit taking being driven by the market is BS as well. If a company were to take actions that would depress its earning in the short term for the sake of (demonstrable) long term growth and profits, the smart segment of the market would recognize that and respond favorably.
One partial solution: outlaw stock options in publicly traded companies. Use cash bonuses and have the usual Employee Stock Purchase Plan that provides a 15% discount on investing in the company.
The shareholders are choosing where they put their money.
Shareholders could choose to buy stock based on how the CEO is paid but few do.
Shareholders could choose to buy stock based on how the CEO is paid but few do.
You can call them the "first major commercial bank to go", as if they're the ominous start of a trend --- and maybe they are, but weren't they also basically one of the ringleaders of the mortgage valuation debacle?
Notice also (if you're a tea-leaf reader) that the WSJ and NYT stories on WaMu didn't end with "raises new and troubling questions" about some other big financial; WaMu was a festering infected band-aid waiting to be ripped off our carcass, just like Lehman. Is there another big one? Wachovia is the next-most exposed company, aren't they? And they're considered pretty strong.
Notice also (if you're a tea-leaf reader) that the WSJ and NYT stories on WaMu didn't end with "raises new and troubling questions" about some other big financial; WaMu was a festering infected band-aid waiting to be ripped off our carcass, just like Lehman. Is there another big one? Wachovia is the next-most exposed company, aren't they? And they're considered pretty strong.
"Integrity is not a commodity. It’s the most rare and precious of personal attributes. It is the core of a person’s and a company’s reputation."
-- Dick Kovacevich, Chairman of Wells Fargo
Reuters: AIG's ex-CEO refuses $22 million severance payout. Have faith all. The core of the United States will persist.
Reuters: AIG's ex-CEO refuses $22 million severance payout. Have faith all. The core of the United States will persist.
I just opened up a savings account and a checking account there yesterday. Hope the FDIC gives me my $10 back.
My WaMu account currently has a whopping $4.84 in it ;)
But in all seriousness, the FDIC arranged for JP to buy WaMu's deposits so they won't have to dip into (i.e. severely deplete) the FDIC insurance fund. Your WaMu account will just end up a Chase account in a few weeks/months.
Just logged in my account and got this message:
http://www.chase.com/welcomewamu/
But in all seriousness, the FDIC arranged for JP to buy WaMu's deposits so they won't have to dip into (i.e. severely deplete) the FDIC insurance fund. Your WaMu account will just end up a Chase account in a few weeks/months.
Just logged in my account and got this message:
http://www.chase.com/welcomewamu/
I have a few WaMu accounts, and I just received several emails from them offering me a higher APY (4%) and 'holiday savings starting now' right before I clicked over to HN and saw this post. I've never gotten a promotional email from WaMu before, and then I suddenly get four in one day?! At first I thought it was a phishing scheme, but they're all legit emails.
It also seems like AIG has increased their advertising for certain business units AFTER their recent plummet...
I shudder to think about taxpayer money being used for new marketing campaigns to "bolster confidence."
It also seems like AIG has increased their advertising for certain business units AFTER their recent plummet...
I shudder to think about taxpayer money being used for new marketing campaigns to "bolster confidence."
I actually have their savings account that earns me 4% APY. When I got it I earned 5%, and last month it was at only 3.75%. I'm planning on leaving it there under JPMorgan's rule unless they offer me less.
From my reading (because I can't call it research yet), WaMu's fall was triggered/multiplied by a lot of withdrawals from their customers because of fears that this would happen (chicken/egg). In fact, $19 billion was supposedly withdrawn over the past few weeks, which put them under their loan ratio (banks must maintain a certain cash/loans ratio). Of course it now makes sense that they offer such a great interest rate - they needed the money!
My concern now is what will happen to my interest rate?
From my reading (because I can't call it research yet), WaMu's fall was triggered/multiplied by a lot of withdrawals from their customers because of fears that this would happen (chicken/egg). In fact, $19 billion was supposedly withdrawn over the past few weeks, which put them under their loan ratio (banks must maintain a certain cash/loans ratio). Of course it now makes sense that they offer such a great interest rate - they needed the money!
My concern now is what will happen to my interest rate?
Chase's savings accounts are about 0.25% around here, so you'll probably get that. I recommend moving to ING Direct or similar.
Check more financial news at http://www.newmogul.com/ , founded by nickb.
Just to let everyone know, Wells Fargo is the only bank in the U.S. that still holds an "Aaa" rating.
I just have to say... I love my credit union.
Some credit unions are having issues as well.
Yup, just pray it doesn't get rapidly downgraded like wamu, lehman, bears, AIG, etc.
I doubt it. It's been outperforming its sector since july.
There might be other financial institutions to get downgraded, but WFC will be in the back of the line.
There might be other financial institutions to get downgraded, but WFC will be in the back of the line.
And if other banks look like they'll fold, expect the government to throw more money at the problem than just FDIC insurance dough. A GOVERNMENT CANNOT CONTROL THE FREE MARKET. IT WILL ALWAYS FAIL. It's like a drunk trying to stay on the road who overcompensates for every mistake until he zooms into a ditch.
Bad lenders and dim-witted/confused borrowers screw one another? Then dilute the dollar. "Borrow" a trillion fucking dollars that you don't have to sedate the market. Oh, that one will work great. I say, just let it be, before this thing spirals out of control. That $700B would do plenty to alleviate poverty for anyone who is, in fact, financially ruined by failing lenders.
We'll let the entrenched poor rot for decades, but bail out the rich in a week. I'm outright disgusted.
What can be done? I heard there was a small protest in NYC yesterday, maybe we'll have one in DC.
Bad lenders and dim-witted/confused borrowers screw one another? Then dilute the dollar. "Borrow" a trillion fucking dollars that you don't have to sedate the market. Oh, that one will work great. I say, just let it be, before this thing spirals out of control. That $700B would do plenty to alleviate poverty for anyone who is, in fact, financially ruined by failing lenders.
We'll let the entrenched poor rot for decades, but bail out the rich in a week. I'm outright disgusted.
What can be done? I heard there was a small protest in NYC yesterday, maybe we'll have one in DC.
You are very very badly informed!
The bailout will mean a 100% loss for all the "rich" people. It's the "poor" that will win - they borrowed money, and don't have to pay it back.
The bailout will mean a 100% loss for all the "rich" people. It's the "poor" that will win - they borrowed money, and don't have to pay it back.
And you're very shortsighted! As are many people who believe that throwing money at the problem is the answer.
This will just allow these unscrupulous lenders to maintain business as usual (assuming the companies are re-sold a few years down the road, which is the plan). That $700B will have to come from somewhere, and that place is nowhere. This may be disastrous for the economy.
And you misquoted me, leaving off "entrenched" in "entrenched poor." If you can buy a house, I have news for you, you are not a member of the entrenched poor. The middle and lower-middle classes were able to buy real estate like never before, and they will be bailed out.
Why, I ask, is rescuing new homeowners a priority now, when the third-world poverty of the inner city and rust-belt country is viewed as some incurable ailment? We know damn well why: Because this coincides with saving the bankers' asses.
This will just allow these unscrupulous lenders to maintain business as usual (assuming the companies are re-sold a few years down the road, which is the plan). That $700B will have to come from somewhere, and that place is nowhere. This may be disastrous for the economy.
And you misquoted me, leaving off "entrenched" in "entrenched poor." If you can buy a house, I have news for you, you are not a member of the entrenched poor. The middle and lower-middle classes were able to buy real estate like never before, and they will be bailed out.
Why, I ask, is rescuing new homeowners a priority now, when the third-world poverty of the inner city and rust-belt country is viewed as some incurable ailment? We know damn well why: Because this coincides with saving the bankers' asses.
>This will just allow these unscrupulous lenders to maintain business as usual
How will that happen when they won't exist anymore?
>That $700B will have to come from somewhere
No it won't. The number is the total debt the US would be on the hook for - if people pay off their loans, then the US won't have to spend any of it.
What exactly do you want to do about the "entrenched poor"? Give them presents? This has nothing to do with them.
I don't know if the bailout is a good idea or not, I haven't looked at it in detail, but it's not as bad as you are making it out to be.
How will that happen when they won't exist anymore?
>That $700B will have to come from somewhere
No it won't. The number is the total debt the US would be on the hook for - if people pay off their loans, then the US won't have to spend any of it.
What exactly do you want to do about the "entrenched poor"? Give them presents? This has nothing to do with them.
I don't know if the bailout is a good idea or not, I haven't looked at it in detail, but it's not as bad as you are making it out to be.
Yes, we should be Santa Claus and give them presents. I'll turn elsewhere for a serious debate. If you think that's the only way the government could help the poor, or that the big-wigs who caused this mess will just vanish as their companies are bought out, you've got another thing coming.
That's exactly my point! They won't vanish, so bailing them out is not going to cause them to stick around. They'll stay either way.
Basically I'm saying that hoping we'll get rid of bad managers is a bad reason to be opposed to the bailout.
If you have ideas for what to do for the poor post them. I don't. But I do know that keeping some companies alive will do more to help people then giving the money to poor people will.
Basically I'm saying that hoping we'll get rid of bad managers is a bad reason to be opposed to the bailout.
If you have ideas for what to do for the poor post them. I don't. But I do know that keeping some companies alive will do more to help people then giving the money to poor people will.
> What exactly do you want to do about the "entrenched poor"? Give them presents?
No let's give them to multi-billion corporations and banks. There is no capitalism in the US anymore. Bad decisions at the corporate level are not being allowed to be punished by Market. Instead Market is manipulated, so we all get punished. This my friend is called SOCIALISM. Even freakin' swedish don't bail out their business. This nation became a parody of values it used to represent.
No let's give them to multi-billion corporations and banks. There is no capitalism in the US anymore. Bad decisions at the corporate level are not being allowed to be punished by Market. Instead Market is manipulated, so we all get punished. This my friend is called SOCIALISM. Even freakin' swedish don't bail out their business. This nation became a parody of values it used to represent.
Again, you don't realize what the bailout will mean to the companies - they will be gone! Kaput. The US will own them. They just won't renege on obligations is all.
BTW: Why do you exclude the gov from the market? These days the fed owns all sorts of things, maybe they'll make a profit.
Look, again, I'm not saying that the bailout is a good idea. I'm saying your stated objections to it were poor and based on "it's not fair" rather than analyzing what the effects on the economy might be.
I don't really care about fair or not: I want to chose the course of action with the best effect. We can debate which course is best, but I hope we don't have to debate if that's the proper thing to debate.
Sigh, this conversation is reminding me too much of reddit, and it's partially my fault.
BTW: Why do you exclude the gov from the market? These days the fed owns all sorts of things, maybe they'll make a profit.
Look, again, I'm not saying that the bailout is a good idea. I'm saying your stated objections to it were poor and based on "it's not fair" rather than analyzing what the effects on the economy might be.
I don't really care about fair or not: I want to chose the course of action with the best effect. We can debate which course is best, but I hope we don't have to debate if that's the proper thing to debate.
Sigh, this conversation is reminding me too much of reddit, and it's partially my fault.
> Again, you don't realize what the bailout will mean to the companies - they will be gone! Kaput. The US will own them. They just won't renege on obligations is all.
Good. This is how capitalism works. Right? You take risks and when you loose you pay the price. If it works out you rich. Banks have been going kaput since beginning of time, big deal. It is like with forest fire. It kills old and weak trees, so new forest can grow on it. Let the banks with bad, sometimes even illegal practices fail, so the new ones that will replace them won't take such a risky bets and give loans to people who can't repay them. What is wrong with that? Capitalism has 2 parts - boom and bust.
Why Wall St, is SOOOO capitalistic in boom times and SOOOO socialistic in bust times? Give them some of their own medicine. They made their decision they should pay for them, not a taxpayer. Let the market clean up the mess from the system!
> BTW: Why do you exclude the gov from the market? These days the fed owns all sorts of things, maybe they'll make a profit.
Oh yeah sure! Let's nationalize our insurance industry, our financial industry, our automotive industry and so on. Is how America was built?
> Look, again, I'm not saying that the bailout is a good idea. I'm saying your stated objections to it were poor and based on "it's not fair" rather than analyzing what the effects on the economy might be.
The effects on the economy would be great. Sure, there would be a period of deep recession, but this is better than popping up inflation. This will not make a single of these banks solvent. We will pay inflation tax for it and at the end of the day, we still have "toxic" assets in books. In government books instead of - so called private - banks - but the issue will be still there.
Good. This is how capitalism works. Right? You take risks and when you loose you pay the price. If it works out you rich. Banks have been going kaput since beginning of time, big deal. It is like with forest fire. It kills old and weak trees, so new forest can grow on it. Let the banks with bad, sometimes even illegal practices fail, so the new ones that will replace them won't take such a risky bets and give loans to people who can't repay them. What is wrong with that? Capitalism has 2 parts - boom and bust.
Why Wall St, is SOOOO capitalistic in boom times and SOOOO socialistic in bust times? Give them some of their own medicine. They made their decision they should pay for them, not a taxpayer. Let the market clean up the mess from the system!
> BTW: Why do you exclude the gov from the market? These days the fed owns all sorts of things, maybe they'll make a profit.
Oh yeah sure! Let's nationalize our insurance industry, our financial industry, our automotive industry and so on. Is how America was built?
> Look, again, I'm not saying that the bailout is a good idea. I'm saying your stated objections to it were poor and based on "it's not fair" rather than analyzing what the effects on the economy might be.
The effects on the economy would be great. Sure, there would be a period of deep recession, but this is better than popping up inflation. This will not make a single of these banks solvent. We will pay inflation tax for it and at the end of the day, we still have "toxic" assets in books. In government books instead of - so called private - banks - but the issue will be still there.
/me wonders if this is a good time to start analyzing bank stocks to find a good buy...
I had Chase when I lived in Chicago and when I moved out to SF there weren't any branches so I got Wamu. Sad to see Wamu go. I wonder what will happen to my awesome savings account interest rates.
The branches are being acquired by Chase. Perhaps the interest rates may be similar to what Chase offers.
Perhaps the interest rates may be similar to what Chase offers
Ouch, I hope not. Regular savings accounts are getting 0.10% - 1.95% depending on the type of account and balance. Compare to Wamu's 4% APY
Ouch, I hope not. Regular savings accounts are getting 0.10% - 1.95% depending on the type of account and balance. Compare to Wamu's 4% APY
That's because Chase is not desperate for cash.
In Chicago, WaMu had much better business rates than Chase. I used Chase for some personal accounts because of ATMs, but WaMu for several business accounts.
Good grief. Are we looking at another Great Depression here?
I ask seriously. I don't know much about this economics jibber jabber, but I know that I sure have been seeing a lot of bad news lately...
I ask seriously. I don't know much about this economics jibber jabber, but I know that I sure have been seeing a lot of bad news lately...
No, a few rich people lost a lot of money and are looking for a helping hand by the US gov. but these company's are a small fraction of the US economy. In the end it's not vary important what the rich do as depressions are mostly about how the middle class react when things start to get bad.
Seems to send the message its ok to go bankrupt cause the gov will bail you out, so wth, lets do it!
OK for who? It's not OK for the bank of the shareholders - they lost everything! The customers don't really care.
So OK for who?
So OK for who?
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The coolest part is that the CEO who has been on the job for LESS than 3 weeks will get paid $19.1 million.
From the article:
The company’s new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered, according to people briefed on the situation. Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus