Forum Post: Congress Shocked To Find That Being CEO Of A Bankrupt Company Is The New Killing It
Posted 13 years ago on Nov. 16, 2011, 8:49 a.m. EST by MonetizingDiscontent
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Congress Shocked To Find That Being CEO Of A Bankrupt Company Is The New Killing It
http://www.zerohedge.com/news/congress-shocked-find-being-ceo-bankrupt-company-new-killing-it
(TylerDurden) Two weeks ago we reported with sheer disgust... http://www.zerohedge.com/news/final-tally-outgoing-freddie-ceo-gets-4-million-bonus-receive-21-billion-bailouts-after-massive ...that the outgoing CEO of bankrupt Freddie Mac, Ed Haldeman, was to pocket over $4 million for his brief two year stay at the nationalized GSE, which money was to reward him for lots of hard work collecting bail out cash from the Treasury. $21 billion to be precise. Apparently it is not easy to beg from Tim Geithner which explains the compensation for a task which is essentially supervising a financial black hole with an attached run off portfolio.
Nonetheless the optics of this farce are rather unpleasant which is why we said that this is the (one of many) reason "why people in America are very, very pissed." Today Congress, which has yet to ban itself from trading on inside information, has decided to at least rectify this one sticking point, and moved forward with a "bill to block multimillion-dollar executive pay packages at Fannie Mae and Freddie Mac even as their regulator defended them as necessary to retain top talent and limit taxpayer losses at the bailed-out companies."
And where are they going to go: MF Global? Morgan Stanley? RBS? Jefferies? As for what new pay wil be: "The committee adopted an amendment that would use the pay scale that applies to independent financial regulators, such as the Federal Deposit Insurance Corp, which allows for higher pay than at most federal agencies.
Representative Al Green, who offered the amendment, said this would have the effect of limiting the highest salaries to about $260,000 per year."
While still about 3 times more than what they deserve, this is a good start. And an even better one would be to if not unwind the GSEs, then to at least recognize that their $7 trillion in debt should be counted toward the US Federal debt, as Peter Orzsag suggested once. http://www.zerohedge.com/article/obamas-budget-has-one-small-missing-piece-63-trillion-dollars
Naturally were that to happen US total debt/GDP would be over 150%, and the bond vigilantes would suddenly be confused whether their time is not better spent on this side of the Atlantic. Yet the biggest twist in this story, is that not only are the GSEs bankrupt, but as the NYT reported earlier, the FHA itself has a "close to 50% chance of requiring a bailout." http://www.nytimes.com/2011/11/16/business/economy/auditor-says-fha-could-need-bailout.html?_r=1
Add to that that the corporate retirement guys (PBGC) http://www.reuters.com/article/2011/11/15/pension-deficit-idUSW1E7LB05820111115 ...and the post office (USPS) http://news.blogs.cnn.com/2011/11/15/postal-service-loses-5-1-billion/ ...are now effectively broke as well, and very soon being the CEO of a bankrupt company will be the new killing it.
Read the rest of this article at:
http://www.zerohedge.com/news/congress-shocked-find-being-ceo-bankrupt-company-new-killing-it
If somebody invented cigarettes today, the government would not legalize them.
::::Fannie Mae Taps Treasury For $8 Billion More, Bailout Grows To $112 Billion::::
http://dailybail.com/home/fannie-mae-taps-treasury-for-8-billion-more-bailout-grows-to.html
WASHINGTON, Nov 8 (Reuters) - Fannie Mae , the biggest source of money for U.S. home loans, on Tuesday said it needed a further $7.8 billion in federal aid to stay afloat as a shaky housing market widened its third-quarter loss to $5.1 billion.
The government-controlled firm also attributed the deeper cash drain to losses on derivatives used to hedge its exposure to interest-rate swings and on expenses related to home loans made prior to the 2008 financial collapse. In the year-earlier quarter it had a loss of a $1.3 billion.
Fannie Mae has now drawn $112.6 billion in bailout funds from the Treasury Department since being seized by the government in 2008 as mortgage losses mounted, and it has returned $17.2 billion to taxpayers in the form of dividends.
::::Fannie Mae taps $7.8 bln from Treasury, loss widens. Bailout Grows To $112 Billion::::
http://www.reuters.com/article/2011/11/09/usa-housing-fanniemae-idUSN1E7A715O20111109