Arnold
Tash Jayasinghe
CibbuanoThough you're about to lose your home, the CEO of Bear Stearns is still doin' fine
March 25th 2008 10:49
What's going to happen to the executives of all these massive banks, the banks that have irresponsibly invested billions of dollars in fancily-named investments that were a facade for bad credit mortgages? If they don't get their yearly bonus, what'll happen to that new beachside bungalow in St. Tropez? What about the annual booze-cruise? What about $3 000/hr prostitutes?
Well, Eliot Spritzer might be under attack, but James Cayne, the ex-CEO of Bear Stearns, is feelin' fine like wine. After all, he just collected $232 million in compensation in the past 10 years, which is about equal to the federal bailout of Bear Stearns.
No, it's all good - see, Cayne gets his money, Bear Stearns gets your tax money, and then you, the sucker that's put money into your pension, which was invested in Bear Stearns, gets to eat cold cans of peas when you're old.
It's called socialism for the rich, and it's what we've got on sale here. Of course, the government has to bailout the sheepishly shrugging banks - otherwise consumer confidence plummets like a rolling stone in quicksand.
Might I suggest that the government use the billions in bailout money to bailout low-income homeowners? That way, people keep their homes, the banks get their money back. It might not avert the crisis, created by these nasty bankers, one hand in their underpants, one hand creating risky investments, but it'd feel a lot better.
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Comment by Anonymous
well now, I am SOOOO glad I read this!!
Now I can fall into an untroubled deep sleep, knowing the rich and fatuous are still able to live a life of total self indulgence and personal gratification with all things outrageously expensive.
I hope they drown in their spas...choke on their caviar...
or give me their money...I'd be EVER so much more friendly and appreciative and tip well!!
cheers
fog
Comment by Howard
Real Crash
PS- I think the Fed is guaranteeing $30-billion in loans.
Comment by Cibbuano
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howard, you're probably right. I admit that I know nothing about how the economy works. After posting this, I read an article by a financial investment firm that claimed that if the govt DIDN'T back the BearStearns buyout, there'd be no liquidity and the stock market would definitely crash.
Comment by Louie
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Comment by Jill Browne
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We went through a recession in the 1980s here in Calgary (Canada), and foreclosures were a dime a dozen. There emerged the so-called "dollar dealer".
Dollar dealers are legitimate business men who buy houses at distress sale prices.
The owner (who it turns out was only ever renting from the bank) has paid whatever equity he could afford and borrowed the rest from the bank. Then the value of the house crashes and concurrently the owner stops making mortgage payments because, well, he wasn't the best credit risk in the world to begin with.
The only way for the owner to keep his house is to pay the arrears to the bank. But the owner has no money, so the wheels of justice spin for a while and the arrow lands on... EVICTION.
Then the bank owns a house it doesn't want to own. Along comes the dollar dealer, says, hey bank, how about 10 cents on the dollar? 50? Whatever it takes, it's less than what the owner was on the hook for, hence the perceived need for bail out. We didn't have government bail outs for the banks in my example. Must be some new-fangled invention.
Follow the bouncing money ball. Who are the winners and losers in this micro-economic view of the story?
Comment by Cibbuano
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Comment by Howard
Real Crash
Who ever heard of a clean politician anyway? And with the real estate money the Spitzer family has, you know the kid spent his own $80,000.