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$700 Billion - To Bail or Not to Bail...That is the question
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Are states next in line for federal bailout?
By Daniel B. Wood
Christian Science Monitor, October 15
How California fares with a $4 billion short-term bond sale this week will help answer a key question looming over the current US financial crisis: are traditional credit markets so frozen that states won't be able to raise revenues to tide them over their cash crunch?
The practice of selling short-term bonds is used regularly by at least a dozen US states, and occasionally by several more, to keep state programs and services running smoothly year round. Because tax income is not steady throughout the year--far more revenue comes in from September through December than January through March--California and others (including Massachusetts, New Jersey, Nevada, Rhode Island, Arizona, Delaware, New York, Florida, and Alabama) borrow short-term to pay their bills when revenues are temporarily insufficient. Now, with states facing the same problem faced by millions of businesses--tightening credit markets--at the same time that revenues are sinking, many budget officials are worried that they may not be able to borrow when they need to.
Some, including California, have notified US Treasury Secretary Henry Paulson that if the credit markets don't come through, they may be knocking on his door. There is currently no formal mechanism in place for the federal government to provide loans to states unless the need is generated by a natural disaster, say experts.
By law, states have to balance their budgets each year. If several go to the federal government and line up all at once, who will decide which states gets the limited--and dwindling--funds? "This is an unprecedented situation because of the scope of the lending needs," says Alan Rubin, director of federal government relations for Buchanan Ingersoll & Rooney, which has decades of experience in state financing. "If these states can't get their funds the usual way and start asking the federal government, there is no clear-cut way for Washington to respond. If the federal government has to determine who gets $6 billion and who gets $10 billion, there's likely to be a lot of finger-pointing. People will be very angry if politics becomes the methodology--there are real issues that are critical to determine. We've never been there before."
Scott Pattison, executive director for the National Association of State Budget Officers, says "about 10 to 12 states in the next few months might have to go on market for a RAN [short-term bonds called Revenue Anticipatory Notes]." Most states have rainy day funds they are dipping into during the current revenue crisis. Other states may be forced to raise taxes, cut services, or do both, he says.
..."States are the safest loans out there with the exception of a loan to the US federal government," says Donald Boyd, a state fiscal analyst with the Rockefeller Institute of Government, the public policy research arm of the State University of New York. "They have very diverse economies, have the power to tax, and cannot go bankrupt. How can General Motors get a loan, if the state of Massachusetts cannot?"
By Daniel B. Wood
Christian Science Monitor, October 15
How California fares with a $4 billion short-term bond sale this week will help answer a key question looming over the current US financial crisis: are traditional credit markets so frozen that states won't be able to raise revenues to tide them over their cash crunch?
The practice of selling short-term bonds is used regularly by at least a dozen US states, and occasionally by several more, to keep state programs and services running smoothly year round. Because tax income is not steady throughout the year--far more revenue comes in from September through December than January through March--California and others (including Massachusetts, New Jersey, Nevada, Rhode Island, Arizona, Delaware, New York, Florida, and Alabama) borrow short-term to pay their bills when revenues are temporarily insufficient. Now, with states facing the same problem faced by millions of businesses--tightening credit markets--at the same time that revenues are sinking, many budget officials are worried that they may not be able to borrow when they need to.
Some, including California, have notified US Treasury Secretary Henry Paulson that if the credit markets don't come through, they may be knocking on his door. There is currently no formal mechanism in place for the federal government to provide loans to states unless the need is generated by a natural disaster, say experts.
By law, states have to balance their budgets each year. If several go to the federal government and line up all at once, who will decide which states gets the limited--and dwindling--funds? "This is an unprecedented situation because of the scope of the lending needs," says Alan Rubin, director of federal government relations for Buchanan Ingersoll & Rooney, which has decades of experience in state financing. "If these states can't get their funds the usual way and start asking the federal government, there is no clear-cut way for Washington to respond. If the federal government has to determine who gets $6 billion and who gets $10 billion, there's likely to be a lot of finger-pointing. People will be very angry if politics becomes the methodology--there are real issues that are critical to determine. We've never been there before."
Scott Pattison, executive director for the National Association of State Budget Officers, says "about 10 to 12 states in the next few months might have to go on market for a RAN [short-term bonds called Revenue Anticipatory Notes]." Most states have rainy day funds they are dipping into during the current revenue crisis. Other states may be forced to raise taxes, cut services, or do both, he says.
..."States are the safest loans out there with the exception of a loan to the US federal government," says Donald Boyd, a state fiscal analyst with the Rockefeller Institute of Government, the public policy research arm of the State University of New York. "They have very diverse economies, have the power to tax, and cannot go bankrupt. How can General Motors get a loan, if the state of Massachusetts cannot?"
MrsSpringsteen
Blue Crack Addict
AP study finds $1.6B went to bailed-out bank execs
By Frank Bass and Rita Beamish, Associated Press Writers | December 22, 2008
Banks that have their hands out in Washington this year were handing out multimillion-dollar rewards to their executives last year.
The 116 banks that so far have received taxpayer dollars to boost them through the economic crisis gave their top tier of executives nearly $1.6 billion in salaries, bonuses and other benefits in 2007, an Associated Press analysis found.
That amount, spread among the 600 highest paid bank executives, would cover the bailout money given to 53 of the banks that have shared the $188 billion that Washington has doled out in rescue packages so far.
Some banks trimmed their executive compensation in the face of faltering performance that foreshadowed the current economic crisis, but they still granted multimillion-dollar packages. Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.
Such bonuses amount to a bribe for executives "to get them to do the jobs for which they are well paid in the first place," said Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services committee.
"Most of us sign on to do jobs, and we do them best we can," said Frank. "We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!"
The AP review of annual reports that the banks file with the Securities and Exchange Commission found that the average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.
Among other findings:
-- Lloyd Blankfein, president and chief executive of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.
This year, Goldman's seven top-paid executives will work for their base salaries of $600,000, with no stock or cash bonuses, the company said. Last spring, before Wall Street's staggering losses and layoffs mushroomed, Goldman described its pay plan as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels." Goldman spokesman Ed Canaday declined to comment beyond that written report.
The New York-based company, after gains last year, on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.
-- Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money on Nov. 14.
-- John A. Thain, chief executive of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, came to Merrill Lynch in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options.
Like Goldman, Merrill tapped taxpayers for $10 billion on Oct. 28.
The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Asset Relief Program, a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks to prevent wide economic collapse.
The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes. Some banks are forgoing bonuses and restricting other compensation.
The records detailing last year's pay packages show that personal financial advice was among the executive perks. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay financial planners.
At Bank of New York Mellon Corp., chief executive Robert P. Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.
Goldman Sachs, paying as much as $233,000 for an executive's car and driver, told its shareholders that financial counseling and chauffeurs were needed so executives would have more time to focus on their jobs.
JPMorgan Chase chairman James Dimon ran up a $211,182 tab for private jet travel last year when his family lived in Chicago and he was commuting to New York. The company received $25 billion in bailout funds.
Banks cite security to justify personal use of company aircraft for some executives. But Rep. Brad Sherman, D-Calif., questioned that rationale, saying executives visit many locations more vulnerable than the nation's security-conscious commercial air terminals.
Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions -- something particularly hard to take when banks then ask for rescue money.
He wants them to come before Congress, like the automakers did, and spell out their spending plans for bailout funds.
"The tougher we are on the executives that come to Washington, the fewer will come for a bailout," he said.
By Frank Bass and Rita Beamish, Associated Press Writers | December 22, 2008
Banks that have their hands out in Washington this year were handing out multimillion-dollar rewards to their executives last year.
The 116 banks that so far have received taxpayer dollars to boost them through the economic crisis gave their top tier of executives nearly $1.6 billion in salaries, bonuses and other benefits in 2007, an Associated Press analysis found.
That amount, spread among the 600 highest paid bank executives, would cover the bailout money given to 53 of the banks that have shared the $188 billion that Washington has doled out in rescue packages so far.
Some banks trimmed their executive compensation in the face of faltering performance that foreshadowed the current economic crisis, but they still granted multimillion-dollar packages. Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.
Such bonuses amount to a bribe for executives "to get them to do the jobs for which they are well paid in the first place," said Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services committee.
"Most of us sign on to do jobs, and we do them best we can," said Frank. "We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!"
The AP review of annual reports that the banks file with the Securities and Exchange Commission found that the average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.
Among other findings:
-- Lloyd Blankfein, president and chief executive of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.
This year, Goldman's seven top-paid executives will work for their base salaries of $600,000, with no stock or cash bonuses, the company said. Last spring, before Wall Street's staggering losses and layoffs mushroomed, Goldman described its pay plan as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels." Goldman spokesman Ed Canaday declined to comment beyond that written report.
The New York-based company, after gains last year, on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.
-- Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money on Nov. 14.
-- John A. Thain, chief executive of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, came to Merrill Lynch in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options.
Like Goldman, Merrill tapped taxpayers for $10 billion on Oct. 28.
The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Asset Relief Program, a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks to prevent wide economic collapse.
The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes. Some banks are forgoing bonuses and restricting other compensation.
The records detailing last year's pay packages show that personal financial advice was among the executive perks. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay financial planners.
At Bank of New York Mellon Corp., chief executive Robert P. Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.
Goldman Sachs, paying as much as $233,000 for an executive's car and driver, told its shareholders that financial counseling and chauffeurs were needed so executives would have more time to focus on their jobs.
JPMorgan Chase chairman James Dimon ran up a $211,182 tab for private jet travel last year when his family lived in Chicago and he was commuting to New York. The company received $25 billion in bailout funds.
Banks cite security to justify personal use of company aircraft for some executives. But Rep. Brad Sherman, D-Calif., questioned that rationale, saying executives visit many locations more vulnerable than the nation's security-conscious commercial air terminals.
Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions -- something particularly hard to take when banks then ask for rescue money.
He wants them to come before Congress, like the automakers did, and spell out their spending plans for bailout funds.
"The tougher we are on the executives that come to Washington, the fewer will come for a bailout," he said.
MrsSpringsteen
Blue Crack Addict
NY Times
January 29, 2009
What Red Ink? Wall Street Paid Hefty Bonuses
By BEN WHITE
By almost any measure, 2008 was a complete disaster for Wall Street — except, that is, when the bonuses arrived.
Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.
That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.
While the payouts paled next to the riches of recent years, Wall Street workers still took home about as much as they did in 2004, when the Dow Jones industrial average was flying above 10,000, on its way to a record high.
Some bankers took home millions last year even as their employers lost billions.
The comptroller’s estimate, a closely watched guidepost of the annual December-January bonus season, is based largely on personal income tax collections. It excludes stock option awards that could push the figures even higher.
The state comptroller, Thomas P. DiNapoli, said it was unclear if banks had used taxpayer money for the bonuses, a possibility that strikes corporate governance experts, and indeed many ordinary Americans, as outrageous. He urged the Obama administration to examine the issue closely.
“The issue of transparency is a significant one, and there needs to be an accounting about whether there was any taxpayer money used to pay bonuses or to pay for corporate jets or dividends or anything else,” Mr. DiNapoli said in an interview.
Granted, New York’s bankers and brokers are far poorer than they were in 2006, when record deals, and the record profits they generated, ushered in an era of Wall Street hyperwealth. All told, bonuses fell 44 percent last year, from $32.9 billion in 2007, the largest decline in dollar terms on record.
But the size of that downturn partly reflected the lofty heights to which bonuses had soared during the bull market. At many banks, those payouts were based on profits that turned out to be ephemeral. Throughout the financial industry, years of earnings have vanished in the flames of the credit crisis.
According to Mr. DiNapoli, the brokerage units of New York financial companies lost more than $35 billion in 2008, triple their losses in 2007. The pain is unlikely to end there, and Wall Street is betting that the Obama administration will move swiftly to buy some of banks’ troubled assets to encourage reluctant banks to make loans.
Many corporate governance experts, investors and lawmakers question why financial companies that have accepted taxpayer money paid any bonuses at all. Financial industry executives argue that they need to pay their best workers well in order to keep them, but with many banks cutting jobs, job options are dwindling, even for stars.
Lucian A. Bebchuk, a professor at Harvard Law School and expert on executive compensation, called the 2008 bonus figure “disconcerting.” Bonuses, he said, are meant to reward good performance and retain employees. But Wall Street disbursed billions despite staggering losses and a shrinking job market.
“This was neither the sixth-best year in terms of aggregate profits, nor was it the sixth-most-difficult year in terms of retaining employees,” Professor Bebchuk said.
Echoing Mr. DiNapoli, Professor Bebchuk said he was concerned that banks might be using taxpayer money to subsidize bonuses or dividends to stockholders. “What the government has been trying to do is shore up capital, and any diversion of capital out of banks, whether in the form of dividends or large payments to employees, really undermines what we are trying to do,” he said.
Jesse M. Brill, a lawyer and expert on executive compensation, said government bailout programs like the Troubled Asset Relief Program, or TARP, should be made more transparent.
“We are all flying in the dark,” Mr. Brill said. “Companies can simply say they are trying to do their best to comply with compensation limits without providing any of the details that the public is entitled to.”
Bonuses paid by one troubled Wall Street firm, Merrill Lynch, have come under particular scrutiny during the last week.
Andrew M. Cuomo, the New York attorney general, has issued subpoenas to John A. Thain, Merrill’s former chief executive, and to an executive at Bank of America, which recently acquired Merrill, asking for information about Merrill’s decision to pay $4 billion to $5 billion in bonuses despite new, gaping losses that forced Bank of America to seek a second financial lifeline from Washington.
A Treasury department official said that in the coming weeks, the department would take action to further ensure taxpayer money is not used to pay bonuses.
Even though Wall Street spent billions on bonuses, New York firms squeezed rank-and-file executives harder than many companies in other fields. Outside the financial industry, many corporate executives received fatter bonuses in 2008, even as the economy lost 2.6 million jobs. According to data from Equilar, a compensation research firm, the average performance-based bonuses for top executives, other than the chief executive, at 132 companies with revenues of more than $1 billion increased by 14 percent, to $265,594, in the 2008 fiscal year.
For New York State and New York City, however, the leaner times on Wall Street will hurt, Mr. DiNapoli said.
Mr. DiNapoli said the average Wall Street bonus declined 36.7 percent, to $112,000. That is smaller than the overall 44 percent decline because the money was spread among a smaller pool following thousands of job losses.
The comptroller said the reduction in bonuses would cost New York State nearly $1 billion in income tax revenue and cost New York City $275 million.
January 29, 2009
What Red Ink? Wall Street Paid Hefty Bonuses
By BEN WHITE
By almost any measure, 2008 was a complete disaster for Wall Street — except, that is, when the bonuses arrived.
Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.
That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.
While the payouts paled next to the riches of recent years, Wall Street workers still took home about as much as they did in 2004, when the Dow Jones industrial average was flying above 10,000, on its way to a record high.
Some bankers took home millions last year even as their employers lost billions.
The comptroller’s estimate, a closely watched guidepost of the annual December-January bonus season, is based largely on personal income tax collections. It excludes stock option awards that could push the figures even higher.
The state comptroller, Thomas P. DiNapoli, said it was unclear if banks had used taxpayer money for the bonuses, a possibility that strikes corporate governance experts, and indeed many ordinary Americans, as outrageous. He urged the Obama administration to examine the issue closely.
“The issue of transparency is a significant one, and there needs to be an accounting about whether there was any taxpayer money used to pay bonuses or to pay for corporate jets or dividends or anything else,” Mr. DiNapoli said in an interview.
Granted, New York’s bankers and brokers are far poorer than they were in 2006, when record deals, and the record profits they generated, ushered in an era of Wall Street hyperwealth. All told, bonuses fell 44 percent last year, from $32.9 billion in 2007, the largest decline in dollar terms on record.
But the size of that downturn partly reflected the lofty heights to which bonuses had soared during the bull market. At many banks, those payouts were based on profits that turned out to be ephemeral. Throughout the financial industry, years of earnings have vanished in the flames of the credit crisis.
According to Mr. DiNapoli, the brokerage units of New York financial companies lost more than $35 billion in 2008, triple their losses in 2007. The pain is unlikely to end there, and Wall Street is betting that the Obama administration will move swiftly to buy some of banks’ troubled assets to encourage reluctant banks to make loans.
Many corporate governance experts, investors and lawmakers question why financial companies that have accepted taxpayer money paid any bonuses at all. Financial industry executives argue that they need to pay their best workers well in order to keep them, but with many banks cutting jobs, job options are dwindling, even for stars.
Lucian A. Bebchuk, a professor at Harvard Law School and expert on executive compensation, called the 2008 bonus figure “disconcerting.” Bonuses, he said, are meant to reward good performance and retain employees. But Wall Street disbursed billions despite staggering losses and a shrinking job market.
“This was neither the sixth-best year in terms of aggregate profits, nor was it the sixth-most-difficult year in terms of retaining employees,” Professor Bebchuk said.
Echoing Mr. DiNapoli, Professor Bebchuk said he was concerned that banks might be using taxpayer money to subsidize bonuses or dividends to stockholders. “What the government has been trying to do is shore up capital, and any diversion of capital out of banks, whether in the form of dividends or large payments to employees, really undermines what we are trying to do,” he said.
Jesse M. Brill, a lawyer and expert on executive compensation, said government bailout programs like the Troubled Asset Relief Program, or TARP, should be made more transparent.
“We are all flying in the dark,” Mr. Brill said. “Companies can simply say they are trying to do their best to comply with compensation limits without providing any of the details that the public is entitled to.”
Bonuses paid by one troubled Wall Street firm, Merrill Lynch, have come under particular scrutiny during the last week.
Andrew M. Cuomo, the New York attorney general, has issued subpoenas to John A. Thain, Merrill’s former chief executive, and to an executive at Bank of America, which recently acquired Merrill, asking for information about Merrill’s decision to pay $4 billion to $5 billion in bonuses despite new, gaping losses that forced Bank of America to seek a second financial lifeline from Washington.
A Treasury department official said that in the coming weeks, the department would take action to further ensure taxpayer money is not used to pay bonuses.
Even though Wall Street spent billions on bonuses, New York firms squeezed rank-and-file executives harder than many companies in other fields. Outside the financial industry, many corporate executives received fatter bonuses in 2008, even as the economy lost 2.6 million jobs. According to data from Equilar, a compensation research firm, the average performance-based bonuses for top executives, other than the chief executive, at 132 companies with revenues of more than $1 billion increased by 14 percent, to $265,594, in the 2008 fiscal year.
For New York State and New York City, however, the leaner times on Wall Street will hurt, Mr. DiNapoli said.
Mr. DiNapoli said the average Wall Street bonus declined 36.7 percent, to $112,000. That is smaller than the overall 44 percent decline because the money was spread among a smaller pool following thousands of job losses.
The comptroller said the reduction in bonuses would cost New York State nearly $1 billion in income tax revenue and cost New York City $275 million.
A stor
Refugee
Please tell me that I am not the only person who is confused by all of this. I watch the news, read the articles and still, don't have a clue. As to how we are going to get ourselves out of this mess. 
AliEnvy
Refugee
Please tell me that I am not the only person who is confused by all of this. I watch the news, read the articles and still, don't have a clue. As to how we are going to get ourselves out of this mess.
Basically you're being robbed blind in broad daylight so the more confused people are about it the easier it is to do. It's not a conspiracy of evil people deliberately inflicting harm. But the in the end the result is the same.
A shitstorm of financial irresponsibility, greed and ignorance by just about everyone, everywhere at all levels is raining toxic fallout and those with the power to save themselves are doing so. It remains to be seen how bad it will be for everyone else.
Getting out of the mess will require the US to increase productive capacity in the global economy. Right now individuals, states and many western countries (largest being US) consume more than they produce and are going bankrupt.
We have to produce more of what the rest of the world wants to buy. We've essentially moved away from manufacture of durable goods and have moved towards innovative technology that allow us to do more with less in the colour and flavour of our choice. Focus, hard work, retraining and significant breakthroughs on this front will be what drives our economy back to growth.
In the meantime we'll build roads and bridges buy less useless stuff and try to avoid WWIII.
BonosSaint
Rock n' Roll Doggie
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MrsSpringsteen
Blue Crack Addict
abcnews.com
Bailed Out Bank of America Sponsors Super Bowl Fun Fest
Morgan Stanley Hosts Conference at 5-Star Resort in Palm Beach
By BRIAN ROSS, MEGAN CHUCHMACH, ASA ESLOCKER and JOE RHEE
February 2, 2009—
Despite a near collapse that required $45 billion in federal taxpayer bailout funds, Bank of America sponsored a five day carnival-like affair just outside the Super Bowl stadium this past week as President Obama decried wasteful spending on Wall St.
The event known as the NFL Experience was 850,000 square feet of sports games and interactive entertainment attractions for football fans and was blanketed in Bank of America logos and marketing calls to sign up for football-themed banking products.
The bank staunchly defended its sponsorship, saying it was a "business proposition" and part of its "growth strategy."
Critics blasted the spending as a serious abuse of taxpayer money.
"The prominent sponsorship of the Super Bowl says to the American people we'll take your money and then we're going to go waste it," Tom Schatz, president of Citizens Against Government Waste, a watchdog group, told ABC News.
Leading Congressional critic, Congressman Elijah Cummings, (D-MD), said, "They should know better, but obviously they don't."
According to the Bank of America, the official bank of the NFL, its NFL partnerships and product tie-tins "generate significant revenue streams." The bank said it was legally required to fulfill its contract to be an NFL sponsor and that its NFL product sales had already increased since the Experience began Jan. 24.
The bank refused to tell ABC News how much it is spending as an NFL corporate sponsor, but insiders have put the figure at close to $10 million. The NFL Experience was on top of that and was inked last summer, according to the bank.
The NFL said it was a "multi-million dollar" event and that it was also spending money to put on the event. A Super Bowl insider said the tents alone cost over $800,000.
Tickets were available for purchase for between $12.50 and $18.50, with proceeds from ticket sales going to local youth initiatives. It was the 18th year for the "interactive fan festival" and the first that Bank of America has sponsored it.
Bailout Dollars Shouldn't Go to Super Bowl Sponsorship, Critic Says
Schatz said that deal or no deal, the event sponsorship should have been abdicated once the bank took billions in bailout funds.
"The Super Bowl is a big deal, but it's a bigger deal that Bank of America is being bailed out by the America taxpayers," Schatz said. "This is an exceptional year and it's a time to say we're not going to do business as usual. We're going to say no, we're going to show some restraint, and we're going to cut back on something that really isn't absolutely necessary."
GM, another NFL corporate sponsor and bailout recipient, said it scaled back this year and didn't send any executives to the big game or schedule dealer meetings around it.
A GM spokesperson said that while the company was still providing a fleet of courtesy vehicles to the NFL for VIPs, only 200 were sent this year, down from 400 in 2008.
Another Bailed Out Wall St. Firm Gathers in Palm Beach
Earlier last week, Morgan Stanley, the bank that laid off 5,000 employees last year and took $10 billion in taxpayer bailout money, held a three-day conference for clients at the Breakers, a five-star oceanfront resort in Palm Beach, FL.
Morgan Stanley would not say what the elegant gathering cost, but said it is an annual tradition and that its clients paid their own travel costs and got a discounted room rate of $400 a night.
Congressman Cummings said that doesn't justify hosting such a lavish event when people on Main St. are struggling to make ends meet.
"For most people on my block, that would be half of a mortgage payment, a monthly mortgage payment," he said.
Bailed Out Bank of America Sponsors Super Bowl Fun Fest
Morgan Stanley Hosts Conference at 5-Star Resort in Palm Beach
By BRIAN ROSS, MEGAN CHUCHMACH, ASA ESLOCKER and JOE RHEE
February 2, 2009—
Despite a near collapse that required $45 billion in federal taxpayer bailout funds, Bank of America sponsored a five day carnival-like affair just outside the Super Bowl stadium this past week as President Obama decried wasteful spending on Wall St.
The event known as the NFL Experience was 850,000 square feet of sports games and interactive entertainment attractions for football fans and was blanketed in Bank of America logos and marketing calls to sign up for football-themed banking products.
The bank staunchly defended its sponsorship, saying it was a "business proposition" and part of its "growth strategy."
Critics blasted the spending as a serious abuse of taxpayer money.
"The prominent sponsorship of the Super Bowl says to the American people we'll take your money and then we're going to go waste it," Tom Schatz, president of Citizens Against Government Waste, a watchdog group, told ABC News.
Leading Congressional critic, Congressman Elijah Cummings, (D-MD), said, "They should know better, but obviously they don't."
According to the Bank of America, the official bank of the NFL, its NFL partnerships and product tie-tins "generate significant revenue streams." The bank said it was legally required to fulfill its contract to be an NFL sponsor and that its NFL product sales had already increased since the Experience began Jan. 24.
The bank refused to tell ABC News how much it is spending as an NFL corporate sponsor, but insiders have put the figure at close to $10 million. The NFL Experience was on top of that and was inked last summer, according to the bank.
The NFL said it was a "multi-million dollar" event and that it was also spending money to put on the event. A Super Bowl insider said the tents alone cost over $800,000.
Tickets were available for purchase for between $12.50 and $18.50, with proceeds from ticket sales going to local youth initiatives. It was the 18th year for the "interactive fan festival" and the first that Bank of America has sponsored it.
Bailout Dollars Shouldn't Go to Super Bowl Sponsorship, Critic Says
Schatz said that deal or no deal, the event sponsorship should have been abdicated once the bank took billions in bailout funds.
"The Super Bowl is a big deal, but it's a bigger deal that Bank of America is being bailed out by the America taxpayers," Schatz said. "This is an exceptional year and it's a time to say we're not going to do business as usual. We're going to say no, we're going to show some restraint, and we're going to cut back on something that really isn't absolutely necessary."
GM, another NFL corporate sponsor and bailout recipient, said it scaled back this year and didn't send any executives to the big game or schedule dealer meetings around it.
A GM spokesperson said that while the company was still providing a fleet of courtesy vehicles to the NFL for VIPs, only 200 were sent this year, down from 400 in 2008.
Another Bailed Out Wall St. Firm Gathers in Palm Beach
Earlier last week, Morgan Stanley, the bank that laid off 5,000 employees last year and took $10 billion in taxpayer bailout money, held a three-day conference for clients at the Breakers, a five-star oceanfront resort in Palm Beach, FL.
Morgan Stanley would not say what the elegant gathering cost, but said it is an annual tradition and that its clients paid their own travel costs and got a discounted room rate of $400 a night.
Congressman Cummings said that doesn't justify hosting such a lavish event when people on Main St. are struggling to make ends meet.
"For most people on my block, that would be half of a mortgage payment, a monthly mortgage payment," he said.
AliEnvy
Refugee
I am also a big believer in marketing and sponsorship. Optics is everything.
The current climate is anything but business as usual. GM having been called out on lavish waste while asking for a handout at least learned the lesson of moderation this time around.
That's not to say eliminate the NFL Experience, just tone it down.
The current climate is anything but business as usual. GM having been called out on lavish waste while asking for a handout at least learned the lesson of moderation this time around.
That's not to say eliminate the NFL Experience, just tone it down.
AliEnvy
Refugee
Sugar (pills) and spice...
Bronstein at Large : Did Obama's big apology turn the salary cap into a magician's hat?
Making sense of the latest headlines requires a big thinking cap and maybe some sedation.
Salary cap spankings for execs at bailed out giants.
The President of the United States confessing "I screwed up" on national TV after years (maybe decades or more) of Administration unwillingness to concede any "mistakes were made," even in the passive voice. Record numbers of tanking high level political appointments in the first 16 days of the new regime.
This is shocking. But shocking good or shocking bad? PR or substantive? Symbolic gestures or practical policy? Valuable or not valuable to the national interest and psyche? If enough people believe something does that make it true?
I feel like a pinball in a machine where Travis Bickle, in his more caffeinated mohawk stage, is working the levers.
I don't know what to think, which is in keeping with the general unreality of our financial mess at the moment.
I had lunch this week with a friend who's one of the most long-term, successful businessmen, civic leaders, and philanthropists in San Francisco. "You know what this reminds me of?" he posed about the economic calamity? What? "Nothing. I haven't seen anything like this in my lifetime." This lion of the community makes important business decisions every day but even he concedes that "the underpinnings have come out from under us. I don't really know what or who to believe any more." Another high level psychological victim of the Madoff syndrome. "There's a worldwide de-leveraging going on in which everything that seemed strange or unusual, was."
Does that include Mr. Obama's latest actions?
Plenty of people seem to feel good about a commander in chief who admits his imperfection to Anderson Cooper, then serially apologizes on the major networks. Taking responsibility is walking the walk, goes that view, instead of the doublespeak, spin and finger pointing that we're used to from both top Democrats and Republicans going way back. And what can you say to someone who confesses they're guilty? Further accusation and criticism seems unnecessary and ungenerous.
But what's the cost of the "crime"? Should there be a sentence for "screwing up" or an accolade?
See what I mean about confusing? And I don't think I'm alone.
But I do know that a high-level guilty plea, however cathartic for all of us, doesn't by itself fix what was broken.
The same questions come up around the salary cap policy. Bold, absolutely. Dramatic, yes indeed. Sends a message, absolutely. And it's red meat for the vast majority of people in the country who are royally pissed at the regal lifestyles of CEOs running ruined companies. But what practical effect does it have? Is it a gun to the heads of these people or, like SF Mayor Gavin Newsom marching with striking hotel workers a few years ago, is it just a PR popper that has no practical effect 60 seconds later?
I know I'm overusing question marks, but that's an accurate reflection of the questions hanging out there in the culturesphere.
Treasury Secretary Timothy Geithner shared the podium with the President in announcing the cap-no-trade approach. Not to pile on, but didn't he have a little glitch in his own tax background and some hand in the current catastrophe as former president of the NY Federal Reserve?
Another friend who's a hard-working and highly respected plaintiff's labor law attorney notes that a fair number of mega-executives have, as part of their contracts, clauses that would let them claim many millions or tens of millions of dollars in severance payments if their salaries are diced back to a paltry $500k. So not only could they kick off their beleaguered businesses, but under the Obama plan, they might still get ginormous payouts anyway. (I haven't seen the contract terms for the head of AIG or Citigroup, so I don't know if it applies to them. But there probably are more than a few loopholes.)
Public confidence is a big component in the success of our government and our economy; that was one of the major plusses of Barack Obama's ability to inspire. Maybe even symbolic gestures still create that good feeling and good will that will lead us to better lives. One of life's most fascinating and mysterious concepts is the placebo effect. For some percentage of people, sugar pills cure them.
Bronstein at Large : Did Obama's big apology turn the salary cap into a magician's hat?
Making sense of the latest headlines requires a big thinking cap and maybe some sedation.
Salary cap spankings for execs at bailed out giants.
The President of the United States confessing "I screwed up" on national TV after years (maybe decades or more) of Administration unwillingness to concede any "mistakes were made," even in the passive voice. Record numbers of tanking high level political appointments in the first 16 days of the new regime.This is shocking. But shocking good or shocking bad? PR or substantive? Symbolic gestures or practical policy? Valuable or not valuable to the national interest and psyche? If enough people believe something does that make it true?
I feel like a pinball in a machine where Travis Bickle, in his more caffeinated mohawk stage, is working the levers.
I don't know what to think, which is in keeping with the general unreality of our financial mess at the moment.I had lunch this week with a friend who's one of the most long-term, successful businessmen, civic leaders, and philanthropists in San Francisco. "You know what this reminds me of?" he posed about the economic calamity? What? "Nothing. I haven't seen anything like this in my lifetime." This lion of the community makes important business decisions every day but even he concedes that "the underpinnings have come out from under us. I don't really know what or who to believe any more." Another high level psychological victim of the Madoff syndrome. "There's a worldwide de-leveraging going on in which everything that seemed strange or unusual, was."
Does that include Mr. Obama's latest actions?
Plenty of people seem to feel good about a commander in chief who admits his imperfection to Anderson Cooper, then serially apologizes on the major networks. Taking responsibility is walking the walk, goes that view, instead of the doublespeak, spin and finger pointing that we're used to from both top Democrats and Republicans going way back. And what can you say to someone who confesses they're guilty? Further accusation and criticism seems unnecessary and ungenerous.
But what's the cost of the "crime"? Should there be a sentence for "screwing up" or an accolade?
See what I mean about confusing? And I don't think I'm alone.
But I do know that a high-level guilty plea, however cathartic for all of us, doesn't by itself fix what was broken.
The same questions come up around the salary cap policy. Bold, absolutely. Dramatic, yes indeed. Sends a message, absolutely. And it's red meat for the vast majority of people in the country who are royally pissed at the regal lifestyles of CEOs running ruined companies. But what practical effect does it have? Is it a gun to the heads of these people or, like SF Mayor Gavin Newsom marching with striking hotel workers a few years ago, is it just a PR popper that has no practical effect 60 seconds later?
I know I'm overusing question marks, but that's an accurate reflection of the questions hanging out there in the culturesphere.
Treasury Secretary Timothy Geithner shared the podium with the President in announcing the cap-no-trade approach. Not to pile on, but didn't he have a little glitch in his own tax background and some hand in the current catastrophe as former president of the NY Federal Reserve?
Another friend who's a hard-working and highly respected plaintiff's labor law attorney notes that a fair number of mega-executives have, as part of their contracts, clauses that would let them claim many millions or tens of millions of dollars in severance payments if their salaries are diced back to a paltry $500k. So not only could they kick off their beleaguered businesses, but under the Obama plan, they might still get ginormous payouts anyway. (I haven't seen the contract terms for the head of AIG or Citigroup, so I don't know if it applies to them. But there probably are more than a few loopholes.)
Public confidence is a big component in the success of our government and our economy; that was one of the major plusses of Barack Obama's ability to inspire. Maybe even symbolic gestures still create that good feeling and good will that will lead us to better lives. One of life's most fascinating and mysterious concepts is the placebo effect. For some percentage of people, sugar pills cure them.
A stor
Refugee
Thanks Alienvey for your reply. What you have written, makes more sense, than the media coverage.
deep
Blue Crack Addict
somewhere in this forum
there were postings that Canada was in good shape
with one /ninth the population of the U S
- 129,000 is a big number
there were postings that Canada was in good shape
with one /ninth the population of the U S
- 129,000 is a big number
diamond
ONE love, blood, life
MrsSpringsteen
Blue Crack Addict
Doubt it will actually happen but it sure sounds good to me
WASHINGTON - (Associated Press) The Obama administration plans to order companies that received huge government bailouts last year to sharply cut the compensation of their highest paid executives, according to a person familiar with the decision.
The seven companies that received the most assistance will have to cut the annual salaries of their 25 highest-paid executive by an average of about 90 percent from last year, said the person, who spoke on condition of anonymity because it has not been announced.
This person said Wednesday that the Treasury Department will announce the deep pay cuts within the next few days.
Kenneth Feinberg, the special master at Treasury appointed by Obama to handle compensation issues at the seven firms getting exceptional assistance from the government's $700 billion financial bailout package, is making the pay decisions.
The seven companies are: Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
Total compensation for the top executives at the seven firms will decline, on average, by about 50 percent, according to the person familiar with the administration's decision.
At the financial products division of AIG, the giant insurance company which has received taxpayer assistance valued at more than $180 billion, no top executive will receive more than $200,000 in total compensation, the person familiar with Feinberg's plan said. The administration also will warn AIG that it must fulfill a commitment to significantly reduce the $198 million in bonuses promised to employees in its financial services division, the arm of the company whose risky trades caused its downfall.
The pay restrictions for all seven companies will require any executive seeking more than $25,000 in special benefits -- things such as country club memberships, private planes and company cars -- to get permission for those perks from the government.
Feinberg's decisions on pay come after administration officials voiced sharp criticism in recent days of the plans of Wall Street firms to pay huge bonuses at a time when the country is still coping with rising unemployment and the effects of the recession.
Obama senior adviser David Axelrod called the bonuses "offensive" on Sunday.
"They ought to think through what they are doing and they ought to understand that a year ago a lot of these institutions were teetering on the brink and the United States government and taxpayers came to their defense," Axelrod said in an appearance on ABC's "This Week."
WASHINGTON - (Associated Press) The Obama administration plans to order companies that received huge government bailouts last year to sharply cut the compensation of their highest paid executives, according to a person familiar with the decision.
The seven companies that received the most assistance will have to cut the annual salaries of their 25 highest-paid executive by an average of about 90 percent from last year, said the person, who spoke on condition of anonymity because it has not been announced.
This person said Wednesday that the Treasury Department will announce the deep pay cuts within the next few days.
Kenneth Feinberg, the special master at Treasury appointed by Obama to handle compensation issues at the seven firms getting exceptional assistance from the government's $700 billion financial bailout package, is making the pay decisions.
The seven companies are: Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
Total compensation for the top executives at the seven firms will decline, on average, by about 50 percent, according to the person familiar with the administration's decision.
At the financial products division of AIG, the giant insurance company which has received taxpayer assistance valued at more than $180 billion, no top executive will receive more than $200,000 in total compensation, the person familiar with Feinberg's plan said. The administration also will warn AIG that it must fulfill a commitment to significantly reduce the $198 million in bonuses promised to employees in its financial services division, the arm of the company whose risky trades caused its downfall.
The pay restrictions for all seven companies will require any executive seeking more than $25,000 in special benefits -- things such as country club memberships, private planes and company cars -- to get permission for those perks from the government.
Feinberg's decisions on pay come after administration officials voiced sharp criticism in recent days of the plans of Wall Street firms to pay huge bonuses at a time when the country is still coping with rising unemployment and the effects of the recession.
Obama senior adviser David Axelrod called the bonuses "offensive" on Sunday.
"They ought to think through what they are doing and they ought to understand that a year ago a lot of these institutions were teetering on the brink and the United States government and taxpayers came to their defense," Axelrod said in an appearance on ABC's "This Week."
BVS
Blue Crack Supplier
Oh this got the radio guys in a tizzy today, they don't understand the whole concept of a bailout...
it's never going to happen.
it's too late to do anything differently, but i still fail to see how helping the companies does a damn thing for the economy. okay great you gave them more money...how does this help me buy a car? (not that i need one, but it's an example of course.) i still think the money should've been given to people, not companies. oh well.
it's too late to do anything differently, but i still fail to see how helping the companies does a damn thing for the economy. okay great you gave them more money...how does this help me buy a car? (not that i need one, but it's an example of course.) i still think the money should've been given to people, not companies. oh well.
ntalwar
Rock n' Roll Doggie Band-aid
I think the Treasury Department and Administration are ordering the compensation limit just for political reasons, and right before bonus season. Taxpayers won't benefit much from it.
BVS
Blue Crack Supplier
You don't think it will speed up payback?
ntalwar
Rock n' Roll Doggie Band-aid
Goldman payed back TARP money fairly quickly because they had the cash to do it. For companies like GM, I don't know where they'll get the cash from.
