What’s Hank Paulson doing with your money?
Bailout Sleuth is on the case.
Meanwhile, AIG wants a third turn at the public trough.
And get this: Ten Percent Of $700 Billion Bailout Could Go To Bonuses
Posted in: Subprime crisis
See what others have said
Note from Michelle: This section is for comments from michellemalkin.com's community of registered readers. Please don't assume that I agree with or endorse any particular comment just because I let it stand. A reminder: Anyone who fails to comply with my terms of use may lose his or her posting privilege.
Trackbacks
- What’s Hank Paulson doing with your money? | PoliticsMuch.com
- Kick the Anthill » The Audacity of Dope
- Thanks Hank: AIG Wants A Third Loan While Ten Percent Of $700 Billion Bailout Could Go To Bonuses | Right Voices
- How is Your $700 Billion Being Spent? | The Daily Conservative
- Polls Show Obama More A “Head” Than McCain: « Riggword Weblog
Comments
You must be logged in to post a comment.
Categories: Subprime crisis
Big Government
» BREAKING: San Diego ACORN Document Dump Scandal
Villainous Company
» Amateur Hour in the Oval Office Continues....Big Government
» Why Isn’t Anyone Really Investigating ACORN?Big Government
» ACORN Scandal, Part 2: The Evidentiary PhaseMudville Gazette
» War costs money (2)Green Room
» Going Un-Framed?Mudville Gazette
» Surrender, he whispered
Nothing surprises me anymore. We’re screwed and after Nov. 4th we’ll know to what extent – BOHICA or FUBAR.
It should be a simple part of this. You get the bailout, you don’t get a bonus. PERIOD.
This is just more proof that the government shouldn’t have intervened in the first place.
Who needs Obama when Paulson is doing just fine in calling the cadence for Socialism’s March? Gotta love those “lesser of two evils” Presidents… They do the same things as liberals, call it “conservative”, leave “conservatives” with the bill to pay, both in real and political capital, hence perpetuating the liberal cause.
I can’t believe the people want Obama or McCain to tell us what they will do to fix the economy. Sound bites aren’t going to fix anything.
We have hundreds if not thousands of so-called experts scratching their heads on what to do. What makes anyone think either candidate has a clue.
All we’re getting with the bailout solution is a few getting rich and good money going after bad. Maybe they should have figured out where all the money that disappeared in the first place went to before sending more after it.
Pay no attention to the man behind the curtain. Wheee! Socialism is FUNdamental!
30, EXACTAMUNDO
Good lord!
These dumb ass bureaucrats and politicians are going to completely destroy us. They simply don’t live in the same universe as the rest of us.
We have money? I thought it was all the states money.
Agreed, top economists, one being Walter Williams, say these corp.s should not be helped, if they fail, they fail and we all learn from it.
Bonuses? for? driving our economy into default? I want an investigation on Freddy,Fannie and all the bailed out corp.
I want to see some of these crooks in jail for along time. Enron was a lemonade stand compared to these shisters.
He’s partying like it’s 1929!!!
And yet by the time the election rolls around people will have effectively forgotten this even happened.
I used to work for a Wall Street firm, and I would be willing to wager that most of this money will go to bonuses, consulting fees and management fees.
Obama will completely screw up any chance our economy has of making an early recovery from this Democrat caused and enabled meltdown, because he professes to claim an unproven expertise at economic issues – an expertise that would lead his insatiable ego and propensity towards socialist solutions to second guess even the advice of the economic experts on his own team…should there actually be any economic experts on that team.
To President McCain’s credit, he has admitted an ignorance of the economy which will guide him to not second guess the economic advice of his cabinet, and to support free markets.
Not to defend McCain’s ignorance of market economics, but at least he’s got Jack Kemp and Phil Gramm advising him, instead of Jim Johnson and Franklin Raines.
Oh is anyone surprised? These people are as predictable as the sun rising in the East.
While you’re right in principle and I agree with you, there’s no way any politician was going to allow those companies to fail and put tens of thousands of people out of work right before an election.
Guess what, there won’t be an investigation into Freddie or Fannie. These crooks will be put in charge of the some other con job that’s cooking in DC. I’m guessing something to do with global warming and ‘environmental justice’. Business as usual for our ruling class, how does that make you feel?
Of course not, if there were, several dems would be losing thier jobs.
The thing that amazes me about these socialists, is that they haven’t thought this whole thing through to the end game.
All previous despot regimes that turned to socialism, had the U.S. economy to use as backup to bail them out. If it wasn’t U.S. funded U.N. development programs to skim money from, it was direct U.S. investment and direct foreign aid from the U.S. keeping them in power. And when their economy finished hitting the tank, they would have a revolution, find a new despot to “save the people” and start the cycle over.
Without the U.S. funneling money in the hopes of winning the hearts and minds of the American people, where’s the money going to come from when our economy tanks? Cuba?, Venezuela?
I don’t think so.
Let me also point out that some of these companies had no interest in participating in this government seizure of assets – JPM, for instance. They were called in and literally told they were going to take the money (and the government intervention in their businesses) whether they wanted it or not, to set an example so that the gov’t could coerce smaller banks (most of whom also need no help) into knuckling under.
I just got an email from my Democrat Congressman in response to my email about the bail out. He told me that that basically they are going to investigate Wall Street cause it is all their fault and in the meantime they are going to have Paulson extend credit to Fannie and Freddie and by doing so they will have more control of the two so they can help “influence” them further. Not to mention that they are going to have licenses and registrations for Mortgage Brokers so they can set requirements for them.
Got to love Socialism.
Don’t just do something, stand there!
“A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad.”
Theodore Roosevelt
To a large extant this may well have be mostly a Democrat screw up. But enough Republicans hopped on the bandwagon to make this a truly bi-partisan, reach across the isle screw up. They acted and are acting like a bunch of Chicken Littles screaming about the sky falling.
Add to this the Cap and Trade promised by both campaigns and we are in for a rough ride. They keep finding new ways to suck the life out of the economy and our pockets. If 10% or 100% of this money goes to bonuses is of little matter–the money is gone and paid for with recession, inflation, taxes and more government control.
Both President Bush and the then Republican Senate could have cut a lot of these programs when they held the power but refused.
Color me guilty of Bush Derangement Syndrome but the man has not served Conservatism well.
—
ALCOHOL, TOBACCO AND FIREARMS
Should be a convenience store
NOT a Government Agency
Yes, the Boosh has streamlined the march to socialism, but is anybody really surprised? When the Magic One takes the stage, how much use, do you think, the veto pen will get?
One unfortunate tendency of the Bush administration is that they don’t mind the store. Where did all that Katrina cash go? Into the pockets of the Louisiana corruptocracy. Where do you suppose all this bailout money will end up? We know that Bush won’t be around to supervise, but it wouldn’t make a difference if he was!
So Farmer Brown tells Framer Green, “I’ve hired the fox to investigate why we are losing so many chickens lately. In the mean time, I’m going to have the weasel keep an eye on the chickens we have left.”
That sound about right?
Don’t worry, Obama’s going to tax the “rich” to make up for it and spread the wealth even more!
We should have sold our business a year ago.
Who are these rich?
Oh, yeah, the ones who create jobs for the rest of us. Now they won’t be able to do that!
Good one, Odumba.
plymouthacclaim, that will just make it easier for the one to lead us down the path past Socialism and right into Communism.
Can you say bread line?
Who are these rich? Oh, yeah, the ones who create jobs for the rest of us. Now they won’t be able to do that! Good one, Odumba.We can all work for the government! Woot! From each, according to ability, and to each according to need.
I seem to have caught a case of the Red Flu though. My abilities, meager though they are, seem about to disappear.
It does make you wonder if it’s ignorance, stupidity, or conspiracy that drives these libs.
I do not know Rogue Cheddar, Professor Ayres has not told us. But I imagine after the first few purges the Supreme Soviet, Congress, the Caliphate – will not bother to challenge DearLeader BroBama. The proletariat will have chosen The Magic One and that settle that, no need to bother the masses with more messy elections.
Enjoy Sharia
Have a nice Jihad
Buy your burka now
This was yesterday.
Right, what we need is to give consumers more credit so they can but more houses they can’t afford.
Link to the above.
Here’s my solution to the credit crisis:
Repeal all the laws and policies that require banks to give out bad loans. Enact legislation to specifically and firmly make the bad loans illegal.
This will restore confidence in the system.
I have an idea. Why don’t all of us start calling the treasury department and ask them how much they will give us for our individual debt. If they are so willing to just throw money around to everyone why shouldn’t we get in on the action?
How do you get a bonus when you failed?
OOOOHHHH, MARCO #12 you hit it on the head… When active in politics on a state level, one of our sayings at HEADQUARTERS was, the AMERICAN VOTING PUBLIC has the shortest memory on record… We used to say if you can limit bad news to 90 days before election day, the PUBLIC will have forgotten… Have doubts??? WATERGATE was way before the 90 day limit in 1972…
Transparency is always important in public corporations and in government. Without it we have nothing.
I am all for a bonus – send mine today. .01% will do as I am not greedy.
Somebody tell me again why Hank Paulson is running the bailout instead of going to prison?
They didn’t fail – they did exactly what they meant to do from the beginning.
Screw the system. Rob the banks. And leave Joe the middle class smuck with the bill.
Good observation, Arizona. I recall Peggy Noonan saying something similar back in January. People wanted to burn her at the stake. Gotta love the fickleness of “conservatives”. If we can’t call things for what they are, then we’re even more lost than I thought.
“On the pundit civil wars, Rush Limbaugh declared on the radio this week, ‘I’m here to tell you, if either of these two guys [Mr. McCain or Mike Huckabee] get the nomination, it’s going to destroy the Republican Party. It’s going to change it forever, be the end of it!’
This is absurd. George W. Bush destroyed the Republican Party, by which I mean he sundered it, broke its constituent pieces apart and set them against each other. He did this on spending, the size of government, war, the ability to prosecute war, immigration and other issues.”
My guess would be, you put the government in charge.
Don’t know if there’s a more appropriate thread to say so, but Happy Birthday, Michelle!
Wow, that year went by fast. Happy Birthday Michelle. How did you spend your bonus? Lots of coffee I am guessing!
Don’t be ridiculous, a flogging would have satisfied most of us.
Basically it her attacks on Governor Palin that has us upset. Peggy Noonan is getting awfully cozy in the Beltway and skewers the Governor for not being so.
Flogging, get it right.
But this IS the time for Conservatives to make a push to take the Party, marginalize and replace the RINOs. I do not give to the Senate and Congressional Committees as they support RINOs in the primaries against Conservatives. If that does not move us Right perhaps we need to leave the Party–let it go the way of the Whigs. These half measures show a lack of resolve that offers the electorate Twiddle Dee v Twiddle Dum. Why should they bother?
—
ALCOHOL, TOBACCO AND FIREARMS
Should be a convenience store
NOT a Government Agency
Yes, Happy Birthday to all who have had or will have one this year. I stopped at 61.
I don’t think you are going to be able to say that too many more years… I really think we are heading toward “your money” becoming “OUR money”.
As long as Henry Paulson is doling out taxpayer money to all his chums, why not dole out a few million bucks for Richard Fuld, the erstwhile CEO of Lehman Brothers Holdings? After all, Fuld only destroyed a company that had existed for 158 years. That should make him a perfect candidate for government largesse. He does not to have more taxpayer money now that his wife’s art collection is only likely to fetch 20 million at auction. The Fulds are therefore a perfect couple to receive more of the 700 million. I truly understand the need to give away my money for bonuses for people who work at hugely successful companies like Lehman, Wachovia, AIG, Washington Mutual, FANNIE MAE and National City Bank.
If you common folk would not have stopped paying your loans, our bonus money would not even be an issue. That being said, leave my private jet, art collection, day spa’s, hunting trips… and bonus money out of this.
I am pretty sure this is their mindset so I will leave off the sarc tag.
REMINDER:
This crap will continue as long as Americans continue to elect Republicans and Democrats.
RWR
http://www.rightwingrocker.com
Thank you John McCain.
RWR
http://www.rightwingrocker.com
Wow, I am really in the wrong line of work. If I came anywhere near loosing that kind of money I would not only be out of a job, I wouldn’t be able to find a job.
Throw some more of our tax dollars at those greedy, ah, (pause as I keep myself from sounding like a liberal nutcase), people who work so hard to do… What exactly is it they do besides make far too much money? Try to act like they know what they are doing? If they knew how to invest money wouldn’t they be RICH AND RETIRED?
And it’s exactly what you will be getting with President McCain.
RWR
http://www.rightwingrocker.com
One of us is going to have to run.
RWR
http://www.rightwingrocker.com
You’re way behind the times. Libs have always considered it all “their” money, which is why they have no problem with taking as much of it away from you as they want.
Could have fooled me. How exactly did his YEA vote on this moronic bailout qualify as support for this?
RWR
http://www.rightwingrocker.com
So if 10% of the bailout goes to bonuses, then 10% of the bonuses will probably go to campaign contributions to the congress critters that are going to “investigate” this mess. Pretty slick, $7 billion in their pockets should keep them in office a long time.
Replacing two-ply, as far as I can see.
Too much more of this, and squares of Charmin really will be interchangeable with dollars. Thanks for the help, The-opposite-of proGress.
If only …
RWR
http://www.rightwingrocker.com
First thing they will do, once they control the government, is lock down the National Archives…for “renovation”, of course. They certainly don’t want anyone getting any ideas viewing the original Constitution and Bill of Rights. Viewing racist and “hate speech” documents are detrimental to their dreams of total control.
What is the reason for giving ANY bonuses to these guys? The whole idea of giving bonuses in the first place was to reward them for outstanding achievement. Then bonuses became an entitlement to the point that even in bad years they got big bonuses, too. This was justified by Wall Street with the explanation that their top workers would leave if they didn’t give them a huge bonus.
But what possible reason do they have for paying out bonuses now? They certainly don’t deserve bonuses for a job well done. (Remember, these are the Wall Street banks who require a bailout to stay in business.) And they certainly don’t need to pay a retention bonus to any of them. Where are they going to go for higher pay – to defunct Lehman Brothers?
If a waiter knocks over my drink and then charges me for the refill, I don’t have to leave a big tip. If Wall Street turns my 401K into a 201K, I’m not paying them a bonus. As part owner of these companies, I vote to fire any executive who pays out even one bonus this year.
Right after the FIRST bailout, Neil Cavuto interviewed the Libertarian Party’s veep candidate who laughed all through the interview.
He guaranteed his party would win 2012 in a landslide because our economy will be so screwed up. He said people would be begging the Libertarians to straighten things up. There’s confidence, and then there was this guy. You know, I believe him.
Thats racist, Racist.
I assumed that 99.9% of that bailout money would be wasted. It is being used to prop up bad policies(CRA, government guaranteeing loans, etc). The actual details of where the money is going are still infuriating though.
Can you IMAGINE the bump McCain would be getting if he had voted AGAINST this abomination???
(Even though it would have passed, McCain would have been on the
rightcorrect side of the issue.)Whatever the hell he wants now shut up and pay your taxes!!!!
I think that was racist. Racist. I lost track, who was racist again???
This is so sad. Can we get an Extreme Makeover for art collectors who have fallen in the ditch like this? We send Fuld on vacation to Paris, and while he’s gone, famous artists paint a dozen new works for him, so that he and the wife won’t lead a gloomey old age?
That article linked regarding ‘Ten Percent Of $700 Billion Bailout Could Go To Bonuses’ is misleading. Perhaps someone mentioned this already (I have not read all the comments yet), but for example if you have a business with a clear profit of 10bil, their actual revenues may be 100bil, of which 90bil is overheads. A significant portion of most businesses is remuneration, an amount which is certainly going to be more than the 10bil clear profit in this example. The article disregards this fact, so is basically comparing apples and oranges.
I have no doubt there are people there getting bonuses that we would consider undeserved, but it is part of their employment contract signed prior to this mess, and the company can’t just breach contract or they’d be sued for a whole lot more than the value of the bonuses. These are individual’s contracts, and individuals in most cases are not solely responsible for the economic crisis. It is the shareholders who will lose out (and have lost out in a big way), which actually makes sense because a shareholder is effectively an owner of the company, and that’s where the buck stops.
You’re saying that “discretionary bonuses” are part of their employment contract? If that were true, it would be part of their yearly salary, it would not be a bonus. Bonus is defined in the dictionary as “something in addition to what is expected or strictly due.”
ny, If you have any evidence that these discretionary bonuses are contractual, please provide it.
I don’t know. Ask Obama because he’s the one who wants to spread the wealth.
Sure – at least I’ll try. If a bonus was not written into your contract, the company would never pay you one, that’s a given. It is the amount that varies from contract to contract, and how it is calculated varies from business to business and contract to contract too, obviously. Although the company net worth may have dived, that is due to asset devaluation in most cases at present. Bonuses can be based purely on revenues, so although these monster corporates are still making billions in revenue (which is what the bonus may be based on), the balance sheet still shows a loss because of loss in value of assets, which effects dividends and share value, not revenue and bonuses (depending on how the company sets up their incentive program). If the bonuses were based on the bottom line, then these employees would likely be in a profit-sharing scheme, which is something entirely dfferent. Does that make more sense?
Sure that may be the dictionary definition, but in the finance industry in NYC it is very rare that an employment contract would not include a provision for a bonus, so in that sense it is expected, despite the dictionary definition. See above for the rest of my answer…
How and why the regulators were not regulating more, better, enough. Freddie paid lobbyists to ensure some GOP senators looked the other way. Fannie and Freddie spent “legendary” amounts on lobbying in the last several congresses…a well known effort in the mortgage industry, BTW. Does anyone know F or F lobbying budget?
I give the above quote as just one example of how bonuses get paid. A bonus is not part of yearly salary unless certain goals are met.
In the case of Fannie Mae, employees cooked the books so executives would receive the highest possible bonuses. One year, the earnings were exactly to the penny of what was required to trigger maximum bonuses. Later, they would be forced to restate earnings at a lower amount, but executives were not required to pay back the bonuses that were fraudulently paid out.
In a capitalist economy, bonuses would only be paid when companies or departments truly meet earnings goals. None of the Wall Street companies being bailed out have even come close to meeting their earnings forecasts for this year.
Not only should there be no bonuses, but because there is a surplus of unemployed financial workers right now, the law of supply and demand dictates that their inflated salaries should be reduced as well. Anything else is socialism. I see no reason why our tax dollars should be used to subsidize bonuses of failed financial workers. Do you?
With President Bush having his “Emergency” economic meetings with World leaders… I can tell you EXACTLY WHERE THIS IS GOING! Believe it, or NOT.
http://www.liveleak.com/view?i=11d_1224365393
I didn’t say I agreed with them getting bonuses, just saying that they do, and one possible explanation of how. Again, just because we don’t like it doesn’t mean we have the right to make some company renege on an employee contract that says a bonus will be paid based on some specified calculation. The Fannie Mae example you gave seems clear cut fraud to me, and I think that will catch up with those involved in time, but that’s just one or two people out of hundreds of thousands of employees that get bonuses legitimately, even though the bottom line for these same companies is a devastating loss for that financial period thanks in part to mark-to-market and GAAP reporting.
I imagine future employees will have a very different contract when it comes to bonus structure – which is indeed one of the agreements these corporates have to submit to if they want to be part of this bailout, but again, this can not be done retroactively.
You may be right. It would not surprise me if bonuses were pegged to gross revenues rather than net earnings.
But even so, these companies got in trouble because they invested heavily in subprime mortgages and other investments that have lost value recently. That means that investments they purchased this year have also lost huge amounts of value. So, if these failing companies are claiming “billions in revenue”, it must be based on the original purchase price of the assets and not on the current value. If so, this revenue is only on paper and is not real revenue.
If bonuses are tied to imaginary rather than actual revenue, they are a scam. In any case, if we had let these companies go bankrupt, there would be no money to pay these bonuses. If we are stuck with bailing out these businesses, our money should only go to essential expenses required to keep these companies from failing. Bonuses do nothing to help keep them afloat. If employees and executives want to quit in protest, fine. Let them join the unemployment line with the rest of their friends.
As you say, it all depends when the assets were purchased – in the same year or in a prior year, which reflects the matching principle.
Investments (assets) already ‘expensed’ out in a prior year that lose value this year become a loss on capital as opposed to an expense or liability. That’s not quite right, but I seem to having difficulty articulating what I mean. Revenue is revenue, assets are assets – they’re two different things. Investments are assets, but the gains (or losses) on them are revenue, but ONLY when they are realized (sold, or when interest is paid etc), until then it is just on paper, not ‘real’ as you say. That’s where mark-to-market can be a killer in this current market.
It is quite possible that the investments regain their value in future years if the company just sits on them, in which case the company itself was effective always financially sound from that perspective, however with mark-to-market, they are effectively giving an ‘as if realized’ figure, which is only on paper, and not ‘real’ until the company sells those assets, so you could just as easily say that the current crisis is only on paper. But it gets more involved – a company in that situation will have liquidity problems and then pays a higher rate to borrow in order to meet expenses, dividends have to be lowered accordingly, shareholders start selling off shares, and the company has even more liquidity issues, and basically it’s a nasty little downward spiral from there if they’ve got too heavily into whatever that investment is (in the current case, the mortgage market)..
Umm.. I lost track of where I was going with this, lol.
Basically if a company says ’screw you’ to it’s employees it’s not going to last much longer, which means it has no chance at all of waiting things out until the economy improves and those risky investment ‘assets’ regain some of their prior value. Problem is (IMHO) the housing market was way over-valued anyway. The govt is banking it will come back, which it eventually will, but as to how many years… too long for many of these companies to hold on for, thus the bailout.
egad what a rant, sorry.
Dude, where’s my bailout and my 10% bonus on top of that?!?!?
Ok I’ll put it another way.
“Ten Percent Of $700 Billion Bailout Could Go To Bonuses”
is the same as saying
“Ten Percent Of $700 Billion Bailout Could Go Continuing to Operate the Businesses Concerned.”
(which is what it’s supposed to do, but never mind, that’s just a technicality..)
My point is, it’s a very misleading statement.
McCain is making a mistake by tying Obama to Bill Ayers instead of to Jim Johnson. Ayers is a moron who should have spent years in the federal pen. That we all know. But few people now know who Ayers is and when our 401K plans and IRAs are going down the cliff, few people care about Ayers. But McCain should be raising holy heck about Obama’s close ties to FANNIE MAE head Jim Johnson. McCain should have asked Obama in the debate? Senator Obama, You have railed about corporate greed. Yet the very first decision you made was to make Jim Johnson, who got tens of millions from FANNIE MAE at a time when he was leading FANNIE MAE into a subprime meltdown. Do you think this decision was wise? Then McCain should have asked Senator Obama the following questions: Was Jim Johnson morally and ethically justified in burying his salary and benefits so that the taxpayers could not find them? Was Jim Johnson justified in receiving those tens of millions from FANNIE Mae at a time when Johnson was leading FANNIE on a path to destruction?
Sadly, the Republicans allowed liberal moderators like Brokaw who would never allow such questions and McCain is not quick on his feet the way Romney would have been.
I don’t think so. People on the right have been at odds with Bush for at least the last two years. The final straw for me was when he finally engaged the conservative blogs – in an effort to ram shammnesty down our throats.
This is actually very predictable. There is absolutely no reason for AIG to ever payback the govt ‘loans’ or to cut back any compensation or other ‘events’.
AIG is now a part of the federal government and is too big to fail.
As long as taxpayer dollars continue to prop them up, this situation can never change.
I figure that sometime in Jan we will start seeing AIG money showing up in congressional pockets!
Paulson has been given $700 billions and almost dictatorial powers to spend as he wishes in the name of calming the markets!
The bafoon was ready to sell Wachovia to Citi for dimes on the Dollar.
The sale to Citi (with bailout money) was hailed as smart until Wells Fargo showed up with its own $13 billions to buy the troubled bank!
Any bet, the Americans are going to see their $700 billions again with his expertise!