Posted on 05/12/2008 12:13:09 AM PDT by fightinJAG
If you're wondering how otherwise extremely bright people at the top of our country's best banks led us into the subprime mess, here's a simple answer:
There was too much money in it for them to resist.
We hear all the time that companies have to pay top execs tens of millions of dollars a year to "attract the top talent."
But dangling huge payouts in front of bank CEOs in exchange for short-term bursts of growth brought just the opposite: the worst performance by some of the best-paid execs in decades, taking a big toll on homeowners and bogging down the whole economy.
Countrywide Financial (CFC, news, msgs) chief Angelo Mozilo cashed out $400 million in stock options from 2003 to 2007. In 2007 and 2008, the company's stock fell to multiyear lows, and the lender may soon disappear.
Washington Mutual (WM, news, msgs) chief Kerry Killinger took home $24 million in 2006. A crash that started in 2007 as subprime-related problems surfaced has wiped out all shareholder gains since 2000.
(Excerpt) Read more at articles.moneycentral.msn.com ...
Long, but . . . read it and weep.
You have a point. However, when an entertainer or athlete does something stupid in the course of their job, it doesn’t usually have consequences outside their immediate sphere. These guys affect the global economy with their decisions.
Don’t you see this as Socialist propaganda? A straw man argument to hide the fact that all solutions lead to more revenue streams and more government control, in other words Socialism.
Google Twenty Five Rules of Disinformation
Amazing that a huge bank CEO barely makes as much as a high-school graduate working in the movie industry, working 7 weeks of the year, acting in a lame movie.
The difference is, the actor makes money for the investors over the course of his/her career.
Investors Business Daily published an editorial recently that highlighted the fact that the big banks and mortgage companies were intimidated into making bad loans by left-wing activist groups. Some of these groups even stalked the managements’ children at school! The major media, of course, never carried a word of this. I tried to find the article on Investors.com, but I couldn’t come up with it.
I did find this article, which is similar, though not exactly about the same group: “Damn social engineering groups (socialists) caused the crisis, not the market”.
http://www.redpills.org/?p=1120
Meet a left-wing housing entitlement thug
http://www.freerepublic.com/focus/f-news/1995412/posts
“he calls himself a “bank terrorist.”
Yes. Bruce Marks and NACA. Thankyou. Marks has been terrorizing people for years and the MSM has never said peep. The recent IBD article was the first I had heard of him.
Greed, Arrogance and Fraud. And Theft.
This is the kind of crap that gives Socialism a good name.
5 CEOs.
$663 Million Dollars.
2 Banks gone. 2 Lenders almost bankrupt.
“These guys affect the global economy with their decisions.”
So obviously the global community needs to take over those companies eh?
/puke
“The difference is, the actor makes money for the investors over the course of his/her career.”
Most of the CEOs have made a lot of money for their investors. If not then its the investors fault for hiring the CEO.
The problem isn’t shakey loans, it’s loans on property that are far in excess of the property’s value. Even if the mortgagee can make the payments, the only way a $200,000 loan on a $100,000 house can sustain its value is if dollars are inflated to half their previous value. Because these inflated loans have been packaged and traded at par (as ‘good’ dollars), we have in effect already inflated the dollar: our current problems are largely a matter of markets catching onto the fact that the dollar’s value is less than they thought it was.
Lender greed was certainly a factor but I doubt mandated subprime loans are anything but a convenient excuse. It’s not just the low end of the market that’s in trouble.
I have worked in banking almost my entire career and I can tell you, without exception, the worst lending decisions I saw at any bank lay directly at the foot of the CEO.
Back in 96-97 when the Hedge Fund Crisis hit B of A took a huge hit. The loan was personally approved and endorsed by the CEO, who was then forced out as part of the merger with NationsBank.
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