This is topic Check this out...WAMU CEO gets 20 million for 17 days on the job in forum Off-Topic Post, Non Stock Talk at Allstocks.com's Bulletin Board.
That's just what one Alan H. Fishman might have thought when he woke up Friday morning.
Fishman was the new chief executive officer for Washingon Mutual — WaMu — the nation's largest savings and loan, which was taken over Thursday night by federal bank regulators and quickly dumped in a fire sale to JPMorgan Chase for the Wal-Mart-like price of $1.9 billion.
But don't cry for Fishman, who reportedly was sky-high — literally — last night, on a flight from New York to Seattle, when WaMu collapsed. Even though he's only been on the job for less than three weeks, he's bailing out with parachute worth close to $20 million, according to an executive compensation analysis conducted for the New York Times by James F. Reda Associates.
That's right, $20 million for 17 days on the job ... and his company failed.
Fishman, who formerly was chairman of Meridian Capital Group, apparently was much coveted by WaMu, which was counting on him to lead the failing thrift out of mortgage troubles that pushed the bank to a $3.3 billion second-quarter loss.
According to filings with the Securities and Exchange Commission, WaMu threw a $7.5 million bonus at Fishman when it hired him on Sept. 8, and guaranteed him an immediate cash severence of $11.6 million — both of which he gets to keep.
He also was eligible for annual bonuses of up to 365 percent of his annual base pay — set at $1 million — to go with millions of shares of company stock.
Fishman does lose out on a big bonus that would have kicked in had he remained on the job through 2009.
Documents show WaMu was going to pay their new boss $8 million to simply not screw up and get fired — all negotiated as the Seattle-based banking giant's loses climbed to an estimated $20 billion
____________________________________________
This stuff makes me sick to my stomach. How could you have such a flawed character to take that? Nobody has integrity on Wall Street.
Posted by Machiavelli on :
17 days? lol who can calculate how much per hour or such that is? ... makes traders in the financial markets look like chicken feed...
Posted by cottonjim on :
holy chit, $49,019.60 per hour, even while he slept. Where do I sign up?
Posted by glassman on :
quote:Originally posted by cottonjim: holy chit, $49,019.60 per hour, even while he slept. Where do I sign up?
here:
Posted by bdgee on :
quote:Originally posted by glassman:
quote:Originally posted by cottonjim: holy chit, $49,019.60 per hour, even while he slept. Where do I sign up?
here:
I don't think you can "sign up". Like with dubya, those jobs come with having a certain parentage.
Posted by cottonjim on :
I qualify, I certainly had parentage Posted by glassman on :
Citi and Wachovia now?
hmmmmm...
we are only going to have a couple of banks when this is all done...
Posted by Machiavelli on :
It's going to turn into like Wall Street where just a very few big companies control the industry...
Posted by bond006 on :
I have seen, smelled,and kicked stuff that a man should not have to and this makes me want to cry before I feel like killing.
This is a total revolting mess they should freez every thing and investigate give the bum a buss ticket and tell him to get the hell out of everybodies sight.
Posted by R1 Man on :
Next time someone robs a Bank....they should give them directions to the next bank.
So what happens if you had your house financed with WM? Do you say your bankrupt....I don't owe you crap????
Posted by Relentless. on :
quote:Originally posted by glassman: Citi and Wachovia now?
hmmmmm...
we are only going to have a couple of banks when this is all done...
As usual, you have seen the aim of this timeline.
Posted by SeekingFreedom on :
Just to play Devil's Advocate...
If the Board of WaMu brought him in on contract for (whatever)millions a year KNOWING they were on the way to the crapper, shouldn't they have to recompense him to some degree? Seeing as how he couldn't do anything in two weeks to stop it, isn't that some form of employment fraud?
Posted by glassman on :
quote:Originally posted by SeekingFreedom: Just to play Devil's Advocate...
If the Board of WaMu brought him in on contract for (whatever)millions a year KNOWING they were on the way to the crapper, shouldn't they have to recompense him to some degree? Seeing as how he couldn't do anything in two weeks to stop it, isn't that some form of employment fraud?
in a word no... he didn't have to take the job. that was a give-away..
i haven't looked him up to see his past associations, but he may have been hired JUST to broker the deal... so that's his "commission"...
Posted by IWISHIHAD on :
Quote Glassman;
"in a word no... he didn't have to take the job. that was a give-away..
i haven't looked him up to see his past associations, but he may have been hired JUST to broker the deal... so that's his "commission"..."
_________________________________________________
I was telling my wife i considered this a finders fee, kinda like finding a treasure with gold in it.
There are other companies out there that bring people in to do this same job it is just not as obvious and usually is a much longer process.
Posted by SeekingFreedom on :
quote:Originally posted by glassman: in a word no... he didn't have to take the job. that was a give-away..
i haven't looked him up to see his past associations, but he may have been hired JUST to broker the deal... so that's his "commission"...
Just curious, is that based on any hard information or just cynical assumptions?
Posted by glassman on :
it's based on experience.. taking the job was his decision, offering the bonus was the co's..
the co. didn't hire him to be a dolt...
if he couldn't figure out the co was failing? he wasn't qualified anyway.
Posted by SeekingFreedom on :
But that's just my point, how much of the company's financial books did they show to prospective CEO candidates? I mean, if they really were that deep in the hole, why would they transmit that to people they wanted to run the company? If they DID show him they were on the way to the poorhouse and he took the job, then I would have to agree with you that there was some back room dealings going on. Otherwise, it was the business version of Gotcha! Bring in a new CEO and then blame him when things go south within the first month. That is the reason many of the highest paid CEO's have the Golden Parachute clause in their contracts. Regardless of the actual causes, how the company runs (for good or bad) is blamed on the CEO. If they get dumped for 'poor performance' they may never get another job in the industry again. That's why they demand the insurance in case it isn't their fault they get blacklisted.
Posted by glassman on :
That is the reason many of the highest paid CEO's have the Golden Parachute clause in their contracts.
that's ridiculous. CEO's are not football players.
the fact is? whenever the "aristocracy" starts taking too much profit? the peasants revolt.
in the last 30 years? CEO's have gone from earning 20 times avg employee pay to 400 times..
the peasants have paid. now they are being told to pay again?
accountability has been removed from the investment encyclopedia... and all business is based in trust..
Posted by SeekingFreedom on :
in the last 30 years? CEO's have gone from earning 20 times avg employee pay to 400 times..
And in that same time period, between consolidation and globalization, the amount of assests that these men and women are being required to direct has increased exponentially as well.
accountability has been removed from the investment encyclopedia... and all business is based in trust..
No arguement there at all. However, that accountability must be properly laid for trust to be earned again.
the fact is? whenever the "aristocracy" starts taking too much profit? the peasants revolt...the peasants have paid. now they are being told to pay again?
An interesting question for you...why has EVERY society through history had 'aristocracy' and 'peasants?' Why have there always been those with influence\money\power and some(many) that haven't any of the above?
Posted by Machiavelli on :
quote:Originally posted by IWISHIHAD: Quote Glassman;
"in a word no... he didn't have to take the job. that was a give-away..
i haven't looked him up to see his past associations, but he may have been hired JUST to broker the deal... so that's his "commission"..."
_________________________________________________
I was telling my wife i considered this a finders fee, kinda like finding a treasure with gold in it.
There are other companies out there that bring people in to do this same job it is just not as obvious and usually is a much longer process.
More like he put buyer and seller together and collected a fee for that but to me it doesn't look like that at all...
Posted by Machiavelli on :
quote:Originally posted by SeekingFreedom: An interesting question for you...why has EVERY society through history had 'aristocracy' and 'peasants?' Why have there always been those with influence\money\power and some(many) that haven't any of the above?
You really dont care too much for poor people do you? To you it's their fault for being poor and for staying poor... your too much of a fanboy of the wealthy... and that's sad... they would chew you and your family up and spit youse out without giving it a thought... you have one vice that im sure your God did not intend and that is the love of money... remember the old saying.... Money is the root of all evil or the love of money...
Posted by SeekingFreedom on :
quote:Originally posted by Machiavelli: You really dont care too much for poor people do you? To you it's their fault for being poor and for staying poor... your too much of a fanboy of the wealthy... and that's sad... they would chew you and your family up and spit youse out without giving it a thought... you have one vice that im sure your God did not intend and that is the love of money... remember the old saying.... Money is the root of all evil or the love of money...
I'm curious, Mach, on what do you base that question? As a Christian in general and a Mormon in specific giving to support the poor is a tenet that I adhere to faithfully. As for the love of money quote, did you note the distinction that the Master made? It's not the possession of money, or even the aquisition of money that is the root of evil. It's the LOVE of money. The single minded chase of the dollar without regard for the consequences that leads one astray.
I don't regard the 'rich' and superhuman, but I refuse to jump on the 'all rich people are greedy and dishonest' boat either.
Posted by glassman on :
And in that same time period, between consolidation and globalization, the amount of assests that these men and women are being required to direct has increased exponentially as well.
so? that wealth is not trickling down...
actual real income is down...
it's down nationwide EVEN with their outrageous paychecks..
it's trickling out...
they've done a very BAD job of managing it too as is now proven...
in any management situation? the further away management is from the real work? the less likely they are to be aware of the real problems...
exhorbitent income is just one way to insulate oneself from the real work..
ordering your parts from China while you live in the midwest is another...
lastly? gloabalisation requires alot of oil for transportation... oil prices will determine the real value of globalistaion...
when you can ship couch frames from china to NC for upholstering, and ship them back to China for sale at profit? oil is too cheap....
Posted by glassman on :
It's the LOVE of money. The single minded chase of the dollar without regard for the consequences that leads one astray.
I don't regard the 'rich' and superhuman, but I refuse to jump on the 'all rich people are greedy and dishonest' boat either.
uh, you seem to take the view that we think all the rich are greedy and dishonest tho...
as for the Master's words? it's not impossible for a camel to go through the eye of a needle, or is it?
Posted by SeekingFreedom on :
uh, you seem to take the view that we think all the rich are greedy and dishonest tho...
If you want, Glass, I'll post some quotes from Mach and others as to why I might have that opinion...such as...
"your too much of a fanboy of the wealthy... and that's sad... they would chew you and your family up and spit youse out without giving it a thought..."
Notice how there is no use of "many" of whom would" or even "most of whom would". It's a generalization. It's always as though the Rich are all made from the same mold. That as soon as one acquires money, they suddenly become immune to human need or morality. This is the way class envy works and why I hate it.
as for the Master's words? it's not impossible for a camel to go through the eye of a needle, or is it?
Most biblical scholars agree that the 'eye of a needle' comment refers to a crowded jerusalem market or side street and not the sewing implement. So while difficult, it is doable.
Finally, I actually would like to hear your answer to why every society has 'aristocrasy' and 'peasants'. I think the answer provides an interesting look into one's perspective.
Posted by glassman on :
An interesting question for you...why has EVERY society through history had 'aristocracy' and 'peasants?' Why have there always been those with influence\money\power and some(many) that haven't any of the above?
this might be a shock to you, but there really are people that don't seek power and influence and money... they are competent and qualified yet they fully comprehend that power and responsibiity go hand in hand... and choose not assume the repsonsibility
you stated that for arguments sake you would take the "wealthy" side of this argument.. and you claim to be middle class, so are you satisfied with the job the people that have assumed responsibility have done?
you have made any number of complaints about the status quo...
for instance? welfare.. it wasn't created to help poor people..
it was created to make sure that we don't have a depression starting from the bottom up... we are getting one right now, and like the last one it is coming from the top down...
the war in Iraq? Bush gave everybody a TAX BREAK? LOL... and the economists that say it generates more income get more attention than the economists who disagree... it is not a FACT that supply-side economics work...
in fact? the guy who worked for Reagan that "championed" it later changed his mind...
Posted by glassman on :
Most biblical scholars agree that the 'eye of a needle' comment refers to a crowded jerusalem market or side street and not the sewing implement. So while difficult, it is doable.
do not be so sure..
and "most biblical scholars" is irrelevant..
yes there was a GATE called eye of the needle, but a camel with BAGGAGE could not pass thru...
Posted by bdgee on :
quote:Originally posted by SeekingFreedom:
quote:Originally posted by Machiavelli: You really dont care too much for poor people do you? To you it's their fault for being poor and for staying poor... your too much of a fanboy of the wealthy... and that's sad... they would chew you and your family up and spit youse out without giving it a thought... you have one vice that im sure your God did not intend and that is the love of money... remember the old saying.... Money is the root of all evil or the love of money...
I'm curious, Mach, on what do you base that question? As a Christian in general and a Mormon in specific giving to support the poor is a tenet that I adhere to faithfully. As for the love of money quote, did you note the distinction that the Master made? It's not the possession of money, or even the aquisition of money that is the root of evil. It's the LOVE of money. The single minded chase of the dollar without regard for the consequences that leads one astray.
I don't regard the 'rich' and superhuman, but I refuse to jump on the 'all rich people are greedy and dishonest' boat either.
Like way too many, you seem to be willing to adopt the notion that the English words you read are the actual words of the original text.
In truth, the thought behind what was translated to "love" that you refer to was NOT THE ENGLISH WORD LOVE. A more accurate translation might be something closer to lust or hunger than love, though that certainly isn't exact either. But that isn't really my point.
To set about believing you are correcting someone else about the the intent of some statement in the bible, when what you are basing your objection on is usage, in the English language, of a word or phrase, is silly. Those guys didn't use English.
And the "Master" didn't choose any of the words of the translation, the translators did.
You do regard the rich far above anyone else, but I am not surprised to hear you say otherwise. It is as easy to see your ever present prejudice against non-rich in what you post as it is to recognize that you don't recognize it is glaringly there.
Why not "jump on the "all rich people are greedy and dishonest" boat? It is every bit as reasonable as the all non-rich people are lazy and unworthy" boat you do ride.
Just the simple truth, sorry....
Posted by SeekingFreedom on :
Glass, unless I missed it, I think you still didn't answer the original question. The reason I posed the question is to try and make you (and whoever else is willing) to answer a much more important one...
How much of one's personal responsibility do you really believe in?
Consider this, if you believe that one has no power to affect their lot in life then doing nothing is justified. You give yourself an 'out.' That is the easiest path as the only effort required is, well, no effort at all.
On the other hand, if you do believe that you are responsible for your actions and that they have weight and effect beyond one's self, then you have to accept that the lack of action is in itself a choice.
Either way, if you believe it about one's self, then it translates to one's beliefs about other people and vice versa. To accept(or deny) one's personal responsibility for one's life is to accept(or deny) that others are responsible (or should be) as well.
Which do you believe?
Now, as I've made clear before, I don't believe that everyone has the power\opportunity to become the next Warren Buffet. I do however beleive that with few exceptions, everyone does have the ability to better their lives in some manner. It doesn't have to be economically, it can be any metric that one chooses to measure success by. Money just seems to be a common one in our culture as it happens to be the coin by which most services\education\products are bought with.
Most here place at least a moderately high ranking on money or else they wouldn't be on a stock market based board. Do you believe that they are greedy for that choice? How many of them would do great things with it should they acquire it? Who knows? And if we don't, why do we allow class envy to lump them in with those that haven't?
Posted by The Bigfoot on :
An interesting question for you...why has EVERY society through history had 'aristocracy' and 'peasants?' Why have there always been those with influence\money\power and some(many) that haven't any of the above?
Bait your own hook SF. What is your answer?
Posted by T e x on :
quote:Originally posted by SeekingFreedom: Glass, unless I missed it, I think you still didn't answer the original question. The reason I posed the question is to try and make you (and whoever else is willing) to answer a much more important one...
How much of one's personal responsibility do you really believe in?
Consider this, if you believe that one has no power to affect their lot in life then doing nothing is justified. You give yourself an 'out.' That is the easiest path as the only effort required is, well, no effort at all.
On the other hand, if you do believe that you are responsible for your actions and that they have weight and effect beyond one's self, then you have to accept that the lack of action is in itself a choice.
Either way, if you believe it about one's self, then it translates to one's beliefs about other people and vice versa. To accept(or deny) one's personal responsibility for one's life is to accept(or deny) that others are responsible (or should be) as well.
Which do you believe?
Now, as I've made clear before, I don't believe that everyone has the power\opportunity to become the next Warren Buffet. I do however beleive that with few exceptions, everyone does have the ability to better their lives in some manner. It doesn't have to be economically, it can be any metric that one chooses to measure success by. Money just seems to be a common one in our culture as it happens to be the coin by which most services\education\products are bought with.
Most here place at least a moderately high ranking on money or else they wouldn't be on a stock market based board. Do you believe that they are greedy for that choice? How many of them would do great things with it should they acquire it? Who knows? And if we don't, why do we allow class envy to lump them in with those that haven't?
trust me, I'm not trying to be mean...but you sound like a teen-ager at a swimming-pool party.
You may have a point, but it's hard to hear amid the splish-splash.
Can you clarify?
Posted by SeekingFreedom on :
Bdgee, before you make blanket statements, you could avoid alot of misunderstanding by asking questions before talking.
I speak both english and portuguese. I have read the King James version of the Bible cover to cover in both languages. I understand all too well that the english terms are simply those used that were closest to the original greek. Most of the languages that are closer to the latin base (spanish, portuguese, etc) allow a far greater opportunity to grasp the original concepts as they still have a wider variety of many terms we simplify into one like Love.
So, yes, I actually DO understand some issues involved with translations.
As for the Master not choosing those words in particular, you are absolutely right. They are actually the words Paul chose in a letter to Timothy. But I'm sure you knew that, right?
As for the esteem I have for the rich? It is the same esteem I have for great song writers. It is the same esteem I have for truly great athletes. Other than those who inherited their money (and some of them who made more with their birthright) have accomplished something with their life. They have something that they have dedicated their time to and have acheived their desired goal.
That is worthy of some measure of respect in my opinion.
I find the ever constant vilification of them with no more basis than any other prejudice annoying in the least and disgusting at it's extreme.
Posted by Machiavelli on :
quote:Originally posted by SeekingFreedom: Glass, unless I missed it, I think you still didn't answer the original question. The reason I posed the question is to try and make you (and whoever else is willing) to answer a much more important one...
How much of one's personal responsibility do you really believe in?
Consider this, if you believe that one has no power to affect their lot in life then doing nothing is justified. You give yourself an 'out.' That is the easiest path as the only effort required is, well, no effort at all.
On the other hand, if you do believe that you are responsible for your actions and that they have weight and effect beyond one's self, then you have to accept that the lack of action is in itself a choice.
Either way, if you believe it about one's self, then it translates to one's beliefs about other people and vice versa. To accept(or deny) one's personal responsibility for one's life is to accept(or deny) that others are responsible (or should be) as well.
Which do you believe?
Now, as I've made clear before, I don't believe that everyone has the power\opportunity to become the next Warren Buffet. I do however beleive that with few exceptions, everyone does have the ability to better their lives in some manner. It doesn't have to be economically, it can be any metric that one chooses to measure success by. Money just seems to be a common one in our culture as it happens to be the coin by which most services\education\products are bought with.
Most here place at least a moderately high ranking on money or else they wouldn't be on a stock market based board. Do you believe that they are greedy for that choice? How many of them would do great things with it should they acquire it? Who knows? And if we don't, why do we allow class envy to lump them in with those that haven't?
Not everyone has the ability to pick themselves out of poverty no matter how hard they try... or life's circumstances just didn't permit it... whatever the reason it happens and those are the people that i believe should be helped with social benefits/programs... afterall if no matter how hard they try to better themselves and it still doesn't work, what do you tell them? and their children? tough luck and starve etc...?
Posted by T e x on :
quote:. . . the original greek.
wow
Posted by SeekingFreedom on :
quote:Originally posted by T e x: trust me, I'm not trying to be mean...but you sound like a teen-ager at a swimming-pool party.
You may have a point, but it's hard to hear amid the splish-splash.
Can you clarify?
No worries, Tex, by the way, how are you coming along?
As to the question, here it is in Reader's Digest form...
Do you believe in fate?
If yes, then some are born to succeed and other to fail. Success and failure are predestined. No amount of effort will change things.
Otherwise, each bears responsiblity for the direction their lifes takes (within reason). Some things being out of their control obviously, they can choose how they react to these events\challenges.
Either way, if you believe in it for yourself, do you extend it to others and their lives?
Posted by T e x on :
quote:Originally posted by SeekingFreedom:
quote:Originally posted by T e x: trust me, I'm not trying to be mean...but you sound like a teen-ager at a swimming-pool party.
You may have a point, but it's hard to hear amid the splish-splash.
Can you clarify?
No worries, Tex, by the way, how are you coming along?
As to the question, here it is in Reader's Digest form...
Do you believe in fate?
If yes, then some are born to succeed and other to fail. Success and failure are predestined. No amount of effort will change things.
Otherwise, each bears responsiblity for the direction their lifes takes (within reason). Some things being out of their control obviously, they can choose how they react to these events\challenges.
Either way, if you believe in it for yourself, do you extend it to others and their lives?
well, actually, I'm doing pretty well. On the other hand, I do have plenty of worries--perhaps "concerns" is a better word: I don't tend to worry, much.
Anyway, thanks so much for asking. I trust all is well with you.
As far as "fate" vs "don't worry" goes...???
Gee...I dunno.
Really.
Even after the fire at my house, I just can't say.
I know I didn't set it; on the other hand, I did a gillion nice things for others in my neighborhood. Do I think they tried to kill me?
No, I don't.
Read some Hillerman and get up to speed on his concept of what the Navajo called "walking with beauty."
btw, I don't pretend to understand what real-life Navajos think/feel, etc. However, the beauty way has a life of its own...
Posted by SeekingFreedom on :
quote:Originally posted by The Bigfoot: Bait your own hook SF. What is your answer?
No bait. No hook, Big. There really isn't a 'right' answer here. It's a reflection of one's perspective.
As for my answer, here you go:
In all societies there are rules, it is in the learning of said rules and pursuing success (as one defines it) through the use of these rules that one becomes more than what one was\is.
Societies are ruled by those that know how to use these rules. If one doesn't, then one is usually subject to those that do\did.
Wealth is simply one means of 'rewarding' those that strive and achieve. Other means are awards, titles, fame, etc. Whatever the award, it is usually in response to something they DID. Even if it is as simple as buying a lottery ticket, some action was required to obtain the reward.
Summed up: Those that ACT with regards to the rules that exist achieve success (however it is measured). Those that do not accept what is given.
Posted by glassman on :
Societies are ruled by those that know how to use these rules. If one doesn't, then one is usually subject to those that do\did.
you are very deluded...
those who rule are not limited by the rules that others accept.
Posted by Machiavelli on :
quote:Originally posted by glassman: Societies are ruled by those that know how to use these rules. If one doesn't, then one is usually subject to those that do\did.
you are very deluded...
those who rule are not limited by the rules that others accept.
Behind Biggest Insurer’s Crisis, a Blind Eye to a Web of Risk
* Sign In to E-Mail or Save This * Print * Single Page * Reprints * Share o Linkedin o Digg o Facebook o Mixx o Yahoo! Buzz o Permalink
Article Tools Sponsored By By GRETCHEN MORGENSON Published: September 27, 2008
“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.” Skip to next paragraph Enlarge This Image Keith Waldgrave/Solo Syndication/Zuma Press
Joseph J. Cassano ran an office in London that lost billions of dollars for its company. The Reckoning A Spreading Virus Multimedia An Insurance Giant, Brought DownGraphic An Insurance Giant, Brought Down Three Weeks of Financial TurmoilInteractive Feature Three Weeks of Financial Turmoil Related Times Topics: Credit Crisis Times Topics: American International Group Inc. Add to Portfolio
* American International Group * Goldman Sachs Group Incorporated
Go to your Portfolio » Enlarge This Image Peter Morgan/Reuters
A.I.G.’S EX-LEADER Maurice Greenberg, right, with President Roh Moo Hyun of South Korea at the New York Stock Exchange in 2003.
— Joseph J. Cassano, a former A.I.G. executive, August 2007
Two weeks ago, the nation’s most powerful regulators and bankers huddled in the Lower Manhattan fortress that is the Federal Reserve Bank of New York, desperately trying to stave off disaster.
As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.
The only Wall Street chief executive participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.
Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.
Days later, federal officials, who had let Lehman die and initially balked at tossing a lifeline to A.I.G., ended up bailing out the insurer for $85 billion.
Their message was simple: Lehman was expendable. But if A.I.G. unspooled, so could some of the mightiest enterprises in the world.
A Goldman spokesman said in an interview that the firm was never imperiled by A.I.G.’s troubles and that Mr. Blankfein participated in the Fed discussions to safeguard the entire financial system, not his firm’s own interests.
Yet an exploration of A.I.G.’s demise and its relationships with firms like Goldman offers important insights into the mystifying, virally connected — and astonishingly fragile — financial world that began to implode in recent weeks.
Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.
Originally intended to diminish risk and spread prosperity, these inventions instead magnified the impact of bad mortgages like the ones that felled Bear Stearns and Lehman and now threaten the entire economy.
In the case of A.I.G., the virus exploded from a freewheeling little 377-person unit in London, and flourished in a climate of opulent pay, lax oversight and blind faith in financial risk models. It nearly decimated one of the world’s most admired companies, a seemingly sturdy insurer with a trillion-dollar balance sheet, 116,000 employees and operations in 130 countries.
“It is beyond shocking that this small operation could blow up the holding company,” said Robert Arvanitis, chief executive of Risk Finance Advisors in Westport, Conn. “They found a quick way to make a fast buck on derivatives based on A.I.G.’s solid credit rating and strong balance sheet. But it all got out of control.”
The London Office
The insurance giant’s London unit was known as A.I.G. Financial Products, or A.I.G.F.P. It was run with almost complete autonomy, and with an iron hand, by Joseph J. Cassano, according to current and former A.I.G. employees.
A onetime executive with Drexel Burnham Lambert — the investment bank made famous in the 1980s by the junk bond king Michael R. Milken, who later pleaded guilty to six felony charges — Mr. Cassano helped start the London unit in 1987.
The unit became profitable enough that analysts considered Mr. Cassano a dark horse candidate to succeed Maurice R. Greenberg, the longtime chief executive who shaped A.I.G. in his own image until he was ousted amid an accounting scandal three years ago.
But last February, Mr. Cassano resigned after the London unit began bleeding money and auditors raised questions about how the unit valued its holdings. By Sept. 15, the unit’s troubles forced a major downgrade in A.I.G.’s debt rating, requiring the company to post roughly $15 billion in additional collateral — which then prompted the federal rescue.
Mr. Cassano, 53, lives in a handsome, three-story town house in the Knightsbridge neighborhood of London, just around the corner from Harrods department store on a quiet square with a private garden.
He did not respond to interview requests left at his home and with his lawyer. An A.I.G. spokesman also declined to comment.
* 1 * 2 * 3 * 4
Next Page » More Articles in Business » A version of this article appeared in print on September 28, 2008, on page A1 of the New York edition. Enjoy the convenience of home delivery of The Times for less than $1 a day Ads by Google what's this? The $700 Billion Bailout What went wrong? Get the full story at Heritage.org www.Heritage.org Stock Broker Ratings Is Your Stock Broker Doomed To Fail The Banks and Brokers X List. Free! www.MoneyAndMarkets.com US Economy Crisis Over? When will the Economy crisis end? Free report for economy indicators www.MoneyMorning.com/econ_crisis Past Coverage
* HIGH & LOW FINANCE; A Pledge to Help That Hurts (September 26, 2008) * Companies Under Pressure (September 26, 2008) * ECONOMIC MEMO; Credit Enters a Lockdown (September 26, 2008)
quote:Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.
Wealth is simply one means of 'rewarding' those that strive and achieve. Other means are awards, titles, fame, etc. Whatever the award, it is usually in response to something they DID. Even if it is as simple as buying a lottery ticket, some action was required to obtain the reward. Summed up: Those that ACT with regards to the rules that exist achieve success (however it is measured). Those that do not accept what is given.
holy crap man... i'll say the same thing to you as i did to PM...
heroin is extremely profitable and meth increases productivity.. in your myopic view we should legalise both..
as for your "grand question" about why society stratifies? you're kidding me right?
you expected an answer in a web log? LOL...
Posted by bdgee on :
quote:Originally posted by SeekingFreedom: Bdgee, before you make blanket statements, you could avoid alot of misunderstanding by asking questions before talking.
I speak both english and portuguese. I have read the King James version of the Bible cover to cover in both languages. I understand all too well that the english terms are simply those used that were closest to the original greek. Most of the languages that are closer to the latin base (spanish, portuguese, etc) allow a far greater opportunity to grasp the original concepts as they still have a wider variety of many terms we simplify into one like Love.
So, yes, I actually DO understand some issues involved with translations.
As for the Master not choosing those words in particular, you are absolutely right. They are actually the words Paul chose in a letter to Timothy. But I'm sure you knew that, right?
As for the esteem I have for the rich? It is the same esteem I have for great song writers. It is the same esteem I have for truly great athletes. Other than those who inherited their money (and some of them who made more with their birthright) have accomplished something with their life. They have something that they have dedicated their time to and have acheived their desired goal.
That is worthy of some measure of respect in my opinion.
I find the ever constant vilification of them with no more basis than any other prejudice annoying in the least and disgusting at it's extreme.
Just exactly what questions would you have me ask?
And what "blanket statements have I made? Indeed, what do you mean by a blanket statement?
"They are actually the words Paul chose in a letter to Timothy. But I'm sure you knew that, right?"
Hogwash. Paul didn't speak English either, so those English words were not his, at anytime and in no letter to anyone.
And the bible was not written in any language you are familiar with, so get off that absurd and arrogant notion that you have some hold on a greater claim to knowledge of the bible that anyone else, because of being able to more "correctly" understand what it says.
"As for the esteem I have for the rich? It is the same esteem I have for great song writers. It is the same esteem I have for truly great athletes. Other than those who inherited their money (and some of them who made more with their birthright) have accomplished something with their life. They have something that they have dedicated their time to and have acheived their desired goal."
If that is all you understand of your worship of rich people, you have once again provided evidence of your inability to recognize your own hero worship of rich people you make in your various utterances. It's there, blunt and over riding, whether or not you can see it.
Personally, I don't see any "constant vilification of" rich people but do see your blanket statement that there is such a thing to be another blanket expression you make in the worship of them.
You needn't preach to us, as most of us have had a great deal more of that before you ever came here than you seem to be able to imagine and most of us don't don't particularly like being preached at. It's more than just a tad arrogant and rude, you know.
Posted by T e x on :
kids?
Don't worry about being "right" ...
much better to be balanced, personally.
Posted by glassman on :
I find the ever constant vilification of them with no more basis than any other prejudice annoying in the least and disgusting at it's extreme.
OK, SF, you really need to hear this, and you're not going to like it.
you have been totally indoctrinated into a patriarchal fundamentalist organisation. You have been told "this is right" and "this is wrong" and you have been taught not to question authority.
The so-called vilificataion that bothers you so much here is actually a democratic debate about what is right and wrong.
it is a crying shame that the GOP has spent the last 20 years pandering to people that want to be told how to think. that's the "allure"of Fox "News" and Limbugger... they have the "ANSWER" and they are willing to share it with you as long as they have sponsors... but don't question their pronouncements ever or you're an idiot. Posted by glassman on :
here's your rich heroes:
S.E.C. Concedes Oversight Flaws Fueled Collapse
By STEPHEN LABATON Published: September 26, 2008
WASHINGTON — The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down.
Also Friday, the S.E.C.’s inspector general released a report strongly criticizing the agency’s performance in monitoring Bear Stearns before it collapsed in March. Christopher Cox, the commission chairman, said he agreed that the oversight program was “fundamentally flawed from the beginning.”
“The last six months have made it abundantly clear that voluntary regulation does not work,” he said in a statement. The program “was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily. The fact that investment bank holding companies could withdraw from this voluntary supervision at their discretion diminished the perceived mandate” of the program, and “weakened its effectiveness,” he added.
The program Mr. Cox abolished was unanimously approved in 2004 by the commission under his predecessor, William H. Donaldson. Known by the clumsy title of “consolidated supervised entities,” the program allowed the S.E.C. to monitor the parent companies of major Wall Street firms, even though technically the agency had authority over only the firms’ brokerage firm components.
The commission created the program after heavy lobbying for the plan from all five big investment banks. At the time, Mr. Paulson was the head of Goldman Sachs. He left two years later to become the Treasury secretary and has been the architect of the administration’s bailout plan.
the fact is that these guys knew EXACTLY what they were doing then, and they still do now....
Posted by Machiavelli on :
quote:Originally posted by bdgee: You needn't preach to us, as most of us have had a great deal more of that before you ever came here than you seem to be able to imagine and most of us don't don't particularly like being preached at. It's more than just a tad arrogant and rude, you know.
![[Wink]](wink.gif)
![[BadOne]](graemlins/headbash.gif)