Kind of depressing too.
Quote: To: Daniel Mudd, former CEO, Fannie Mae
Richard Syron, former CEO, Freddie Mac
Dear Mr. Mudd and Mr. Syron,
I was sorry to hear that you got fired from your jobs at Fannie Mae and Freddie Mac. It's sad that the job market is so tough right now. Let's just hope it's a quick downturn so we can get our country moving again!
As someone who has himself been fired, I wanted to give you some tips for coping with your sudden unemployment.
First, expect to feel sad for awhile. Recovering from the loss of a job has been equated to the grieving process after losing a family member. It's no fun, but the key is to recognize it and stay busy. After you've updated your resume, joined online job-search sites like Monster.com, and scoured the classifieds in your local paper, you may find that waiting for responses and getting the wheels turning again feels like forever. Again: stay busy! Work in the yard (if you have one) or start a home-improvement project you've been putting off.
Second, be very careful with your nest eggs. Richard, you're only getting $14 million in severance pay, retirement benefits and deferred compensation. Daniel, you’re only getting $9 million. The key is to make that money last as long as possible. Fact is, it could take awhile to score another job. So try and whittle down your expenses to $1 million per month. Eat out less. Carpool. Look for bargains at the Goodwill store. Turn the thermostat a bit lower this winter. And don’t add anything to your credit card that you can't pay off. That last one's a biggie. Oh, and sign up for unemployment benefits now---I think you can even do it online.
Finally, lean on your support network. They're there for you. I knew a guy once who got fired from Burger King. Next thing he knows, he's talking to an uncle who gets him a gig at KFC. My friend didn’t even know his uncle was a manager. His uncle later got arrested for operating a coke-smuggling ring from his store, but all the corporate awards he won for cleanliness and efficiency will look great on his resume when he gets sprung in 2025.
I have to close for now because I have to get back to work. (Oops, sorry, bad choice of words.) Don’t let the voices of negativism you're hearing in your head get the best of you. I know your hard work, experience and perseverance will pay off!
Sincerely,
Bill in Portland Maine
P.S. Forgot to mention one other tip: eat sh!t and beat yourself with a shovel. Hugs, B.
The point of the article is that you, I and every other tax payer just gave the CEO's of the two companies a combined $23 million dollars in retirement pay for doing such a "great" job that it is going to cost we same taxpayers over a trillion dollars to fix the mess via what is expected to be the most expensive bailout in government history.
BlazerMatt Wrote:The point of the article is that you, I and every other tax payer just gave the CEO's of the two companies a combined $23 million dollars in retirement pay for doing such a "great" job that it is going to cost we same taxpayers over a trillion dollars to fix the mess via what is expected to be the most expensive bailout in government history.
Except for the fact that retirement benefits and deferred compensation are accrued and expensed while the person is working, So aside from severance pay, the company and its customers have paid for that $23 Million already, the government will only be on tap for the severance. Still seems like a lot, don't get me wrong, but most defined benefit retirement plans are based on your last pay, something like 70% of what you made the last year you worked for the rest of your life.... If you were making a million/year, that would add up pretty quick. But they should forfeit that because they are so rich.....
What is the cost of a bailout versus the cost of not doing a bailout?
The answer in this case is that not having a bailout would make having a bailout look like milk money.
BlazerMatt Wrote:The point of the article is that you, I and every other tax payer just gave the CEO's of the two companies a combined $23 million dollars in retirement pay for doing such a "great" job that it is going to cost we same taxpayers over a trillion dollars to fix the mess via what is expected to be the most expensive bailout in government history.
It's the government's fault for making the housing bubble in the first place. They relaxed lending standards, encouraged banks to lend to previously unqualified people, and lowered rates. Don't blame this on the CEOs. The government got what it wanted, more people owning houses. The only problem is that the people couldn't actually afford the houses they owned.
The government doesn't dictate lending standards, companies and investors do.
Fannie and Freddy were the primary standard setters and then everyone added caveats to those standards in their own lending.
Fannie and Freddie spent a ton of money on lobbying/bribing the legislators to change the rules so that they could do what eventually put them in the position they are now.
and that's different from other large companies? I am not a big fan of lobbying but it's nothing new, especially from companies of that size.
Like I have said many times before, there is no one single group to blame in this mess. Everyone benefited, everyone contributed, and now most everyone (with the exception of those with golden parachutes) are feeling the negative side effects.
The bailout had to be done and it is yet to be seen how much this will actually cost taxpayers. As of right now, there has not been a single loan from tax funds that have gone to this rescue plan.
You know that the bailout of Fannie and Freddie is going to dwarf the Savings and Loan thing in the late eighties though. Whether a dime has been paid out yet or not, it's coming and it won't be small.
The thing that really chaps me about F & F is that you had this quasi independent business that was being run as though it were a regular for profit but everyone knew that it had the backing of the federal government. All the profits were private, and all the risk and loss was socialized by the USG. Couple that with the salaries being paid guys who ran it into the ground and it makes me want to spit.
Golden parachutes in general chap me - executives who suck and run their companies into bankruptcy or so badly that the company is at risk of going belly up not only get paid many millions, but when they get canned for it they get paid another ten, fifteen, twenty million. Yeah, yeah, I know, that's the business culture and if you want to hire people you gotta do what everybody else does... but it's friggin' brainless. So far as I'm concerned if they're going to get those huge bonuses when things are fat they should be at risk of getting the parachute chopped if they suck it.
There is a lot of research done on golden parachutes, some by former business school professors of mine, that show that golden parachutes work. I questioned my professors if interests are truly aligned when you know that if you do a good job you make a lot of money and if you do a horrible job you get canned and make a lot of money. That said, in order to attract top talent (at the time of the hire) you have to pay. You have to pay people to take risks for the company and shareholders.
This is also no different than professional athlete's contracts. You have some guy who has one good year (just happens to be his contract year) and next thing you know he's getting paid like he's been great for years. After the contract is signed the performance dwindles and you have an overpaid athlete who essentially is paid by the fans.
Fannie and Freddie are VERY important to the GLOBAL financial system so the cost of bailing them out, while it may be higher than S&L, is much smaller than the price tag for not bailing them out. The way I look at this, the government prevented an economic disaster much larger than we can fathom.
I do like how Paulson removed the CEOs and is going to retool the company. It's not like the government is giving them $50 Billion and letting them continue to go on their way.
The CBO's current estimate on Fannie and Freddie is $25 billion. There are financial experts out there that say it may go as high as $100 B.
If they did that and didn't remove the management I'd be leading the march on Washington with torches and pitchforks.
So is this something else I can blame on McBush and the republicans.
Nope. You can blame the House and Senate, especially the Finance and Banking committees. You can blame all the whores who took money to deregulate the financial industry. My personal favorite target is Phil Graham, who did far more than his share of such and is now on the board of UBS for his good deeds.
There were a lot of regulations that went back to the depression that were removed to allow risky investments by people who were supposed to be conservative with other people's money. It took both parties to screw the pooch this badly.
UAB Band Dad Wrote:Nope. You can blame the House and Senate, especially the Finance and Banking committees. You can blame all the whores who took money to deregulate the financial industry. My personal favorite target is Phil Graham, who did far more than his share of such and is now on the board of UBS for his good deeds.
There were a lot of regulations that went back to the depression that were removed to allow risky investments by people who were supposed to be conservative with other people's money. It took both parties to screw the pooch this badly.
on
THIS we agree
I think we agree on more than you realize. It's my socially liberal side that rubs most of y'all the wrong way, on fiscal and defense you'd be surprised how close we are. I'm cynical as hell about how our government works. I don't have enough money to take the standard Republican position - "But he'll raise my taxes!!!".
