Lehmen Brihers: Can Someone Explain This PLEASE!!

[mkemse]

As any of you know, Lehmen Brothers recently filed the biggest Bankcrupcy In US Hsitry,
But they also annouced this morinig, (Monday Set. 22, 2008) that aside from this, they they have set $12.5 BILLION Dollars off to the side to Pay their Top Execs. ect Millions upon Billions of Dollars in "Exit" Salaries, that the money was in place before they "Collapsed", will some PLEASE explan how a Company like this, can file the Biggest Corp Bancrupcy in Unted States Histiry, but still somehow have enough money to pay out these kind of bonuses, they did say today also the despite the fact they are Bancrupt, they WILL BE PAYING these bonuses

[denuseri]

Basically its like this "GREED" makes the world go round.

The basic component to capitalisum.

Without it business wouldnt exist and no one would care if they made any money at all.

We would each tend our own garden as Voltaire expoused.

The corruption of the company you mentioned is no different than the oil companies claiming they are on the verge of collapse if they dont raise prices and then reporting record profits; or countless other corperations to numerous to mention.

Individual greed is a great movivator, those ceo's probabely all have so much dirt on each other and thier constituents, even in the governement, and not just in america mind you its a world wide problem becuase many of these companies know no boundaries or are incorperated into mega conglomerates and have very lucrative deals with the governments where thier factories and chain stores what have you reside.

Unofficially the big mega corpurations all ready in so many ways "run the world". Weather by design or not.

The little people (us) find this to be disparaging and we individually squeak out against it, some politicians show an intrest in stopping such practices, alltough it will remain to be seen weather or not its just another ploictical ploy to get votes or ,if genuine able to be accomplished.

And all people have proven to many times thoughout history to stomach well all manner of coruption, hipocracy, and oppression, so long as it doesnt effect our "bread and circusis".

When it does, when we the mob have to be troubled out of nessesity becuase our own individual dailey lives are involved, then and only then does our squeak gain the numbers and momentum to become a roar.

[mkemse]

And what I find even more amazing is that until this whole $700B bail out was suggested our Prsident said "I had no idea thins were this bad"

As Prsiednt he should, Lehams Goes under, Merrirl Lynch get bought out, AIG almost goesu nder, Fannie Fae and Freddie Mac the same and he as our President had NO idea things were this bad?? do he realy think the American people aree this stupid??
kinda like the Captain of the Titatanic saying "Yep, I think we MAY have it something"

[denuseri]

The problem is not with any one politician, its with all of them.

[mkemse]

The problem is not with any one politician, its with all of them.

I agree, buti still feel Bush should have been awatre of what was going on and not wait til the last miguhte and say "Gee we have a problem" that was all i mean

[Ragoczy]

I agree, buti still feel Bush should have been awatre of what was going on and not wait til the last miguhte and say "Gee we have a problem" that was all i mean

I realize it's easier to blame one guy -- we all want to point to one person and say: "Him! He's the bad guy!"

Unfortunately, you can't point to the Executive Branch for this. It was Congress who refused to pass regulatory legislation in 2005 that would have provided better oversight of the mort-gage (damn spam filter) industry. The Executive Branch is only responsible for enforcing those regulations.

In fact, in 2005, Congress was warned by one of its members that Fannie-Mae/Freddie-Mac were essentially cooking the books with high-risk loans in order to meet targets that would get their executives bonuses. One member of Congress warned, on the record in open session, that unless there was more regulation the end result would be disastrous for the America's economy.

Unfortunately, those two organizations have some great lobbyists and doled out a lot of money, so the legislation didn't pass ... and here we are.

[Ragoczy]

As any of you know, Lehmen Brothers recently filed the biggest Bankcrupcy In US Hsitry,
But they also annouced this morinig, (Monday Set. 22, 2008) that aside from this, they they have set $12.5 BILLION Dollars off to the side to Pay their Top Execs. ect Millions upon Billions of Dollars in "Exit" Salaries, that the money was in place before they "Collapsed", will some PLEASE explan how a Company like this, can file the Biggest Corp Bancrupcy in Unted States Histiry, but still somehow have enough money to pay out these kind of bonuses, they did say today also the despite the fact they are Bancrupt, they WILL BE PAYING these bonuses

This happens because the lobbyists for that industry go to members of Congress and make logical, cogent, persuasive arguments for why executive compensation should be protected. In an entirely unrelated event, those lobbyists contribute heavily to the Congressmen's reelection campaigns. And in a bizarre set of coincidences, executives from those companies then become "economic advisers" to the elected official when he decides to run for President.

The world's a funny place.

[mkemse]

This happens because the lobbyists for that industry go to members of Congress and make logical, cogent, persuasive arguments for why executive compensation should be protected. In an entirely unrelated event, those lobbyists contribute heavily to the Congressmen's reelection campaigns. And in a bizarre set of coincidences, executives from those companies then become "economic advisers" to the elected official when he decides to run for President.

The world's a funny place.

True but I still do not undertstand how Bush could not haveseen this, how it took all his 'Ecomonic Adisers" to open his eyes to how bad things are??
I no nothing about ecomonics this that sense, but as soon as i hear Lehmen Brothers went under, AIG was going that way, Fannie Mae Aand Freddie Mack werei ntrouble, to me it doesnot take a "guiness" to know something is terrbly wrong,
If i am driving in my car in a blizzard, i do not need my pssenger to say "Hey man it is snowin,g" i should be able to see this myself
Why was Bush unable to see how serious thing were before his advisors told him??
And I only say Bush because he is the current Prsiedent, any other President who acted like him be they Republican or Democratic and would still question their lack of Vivsion on this, seeing what is going on and sayin,g "I had no idea how badthings were"

[mkemse]

Plus, asidefrom his asdivers isn't itthe Prsidents respomsibility to know what is going on in all aspecyts of this country, the ecomony, ect, if their policy is supposed to drive the economy it seems to me it is their job to be aware of what is going on THEN seek your adivers suggestions on on to try and solve theissue, NOT wait for your adviders to adive you there is a problem

[Ragoczy]

Okay, so think about this:

There are analysts whose job it is to watch these companies and make investment recommendations -- most of them didn't see this coming, at least as badly as it turned out.

There are pretty smart investors who put money in these companies -- most of them didn't see this coming.

There are journalists for financial reporting whose job it is to do nothing all day but investigate and write about these companies -- most of them didn't see it coming.

There are government regulators who are supposed to watch for this sort of thing -- most of them didn't see it coming.

Why? Because the companies were hiding how bad things were getting and doing a pretty good job of it. But you want to fixate on blaming the President for not seeing the problem that most people whose job it is to watch this one particular thing missed it?

And no, the President's job is not to know everything about everything. His job is to have people gather information, brief him, make recommendations and then he makes a decision ... that's the role of a Chief Executive: decision-making. The CEO of a company does not have all information about all divisions of his company in his head at all times -- especially if the department heads are deliberately misleading him.

Even if he had seen the problem coming, there's little he could have done about it. In order to have headed this thing off, regulations would have to have been put in place -- those regulations would have been to make companies stop making loans that couldn't be paid back. That would not have been a very popular bit of legislation and it's unlikely he would have been able to push it through Congress. I can see the New York Times headlines now: "Bush Denies Homeownership to Millions of Poor".

There's a common misconception that the President has some mystical power over the economy -- this simply isn't the case. Sure there's some influence, but timing and market forces are not that controllable. This issue isn't "Bush's fault" any more than the dotCom boom was a credit to Clinton -- they both just happened to be President when these things occurred. There's plenty of blame to go around for this (http://www.bdsmlibrary.com/forums/showthread.php?t=17564), but I don't see what Bush could reasonably have been expected to do.

If you want to play the "he should have known"-game, then point at the consumers who took the mort-gages (silly spam filter) in the first place. They "should have known" that when their payment adjusted up they wouldn't be able to afford it.

Now, if you do want a President who was prescient enough to be one of the few to recognize this problem was coming and how bad it is, you're in luck. There are two candidates in this year's Presidential race:

One candidate recognized this problem was coming in 2005 and warned that the books were being cooked and it would have disastrous consequences. He stated this on the record in Congress and supported legislation to fix the problem.

The other candidate has two economic advisers who were part of getting Fannie-Mae/Freddie-Mac into this position, one of whom received $90-million in compensation while screwing the company up. This candidate has received more money from that industry than any other politician other than the chairman of the Senate Finance Committee.

[mkemse]

My question remain, Freddie Mac goes under, Fannie Mae the same, why did our Prsiedent need his advisors to tell him this?? he said he had no clue about Freddie or Fannie TILL THEY went under, my issue is surew he can't keep an eye on everything, but he rads papers, he watches I assume TV why did he not see or read about? He comes across as to say I knew nothing about his til my advisers told me, I don't buy that, I had to have seen or heard both Mac's goingu nder, then he gets hids advisers together and says what is gointg to happen next, but for both fannie and Freddi to go under and him have no idea til he was advised they had, i can't believ eh did not literaly see this or hear abouti t or rad about, that he was clueles til his advisers told him they had gone under, he said himself he did not know til his advisors told him

[Thorne]

My question remain, Freddie Mac goes under, Fannie Mae the same, why did our Prsiedent need his advisors to tell him this?? he said he had no clue about Freddie or Fannie TILL THEY went under, my issue is surew he can't keep an eye on everything, but he rads papers, he watches I assume TV why did he not see or read about? He comes across as to say I knew nothing about his til my advisers told me, I don't buy that, I had to have seen or heard both Mac's goingu nder, then he gets hids advisers together and says what is gointg to happen next, but for both fannie and Freddi to go under and him have no idea til he was advised they had, i can't believ eh did not literaly see this or hear abouti t or rad about, that he was clueles til his advisers told him they had gone under, he said himself he did not know til his advisors told him

I'm with Ragoczy on this one. I'm no fan of Bush, but in this case I can't push the blame on him, at least not totally.

However, any executive, whether political or business, must surround himself with able administrators who are capable of handling their little piece of the action and who aren't afraid to walk in and tell the boss that something is wrong. Any leader who shoots the bearer of bad news soon winds up without any trustworthy messengers, and ends up on the trash heap, and he'll never see it coming.

There were, indeed, people who saw this coming. Some, far too few and generally not highly placed, tried crying wolf, only to be castigated for it. Some, those most highly placed, spent most of their time making sure that they wouldn't be the ones caught in the collapse. Their nest eggs are quite secure, you can count on it. And they're the ones we need to bring under the bright lights and demand an accounting from.

But that isn't likely to happen, either.

[mkemse]

No , i am not blaming Bush for them going under, but I can't believe he did not know they went under til his advisors told him they did

[Ragoczy]

No , i am not blaming Bush for them going under, but I can't believe he did not know they went under til his advisors told him they did

I think you may be reading more into the original quote you posted ("I didn't know things were this bad") than is actually there, but I haven't seen the statement you're quoting in its entirety and context -- it's important to keep in mind that the press likes to drop a word here and there to make things "clearer".

If I were President and my staff told me they were recommending a $700 billion bail-out of the financial markets, I'd probably say "I didn't know things were that bad" too (emphasis added) -- although I'd probably use the alternate phrase "Holy fuck!"

It also wouldn't be unusual for a President to not know about something at all until his staff told him -- that's what the staff is for. The President of the United States, in general, doesn't spend a lot of time watching CNN or listening to the radio. He'd be notified by staff of something like this.

[mkemse]

thanks

[MMI]

I can't believe his advisers hadn't told him sooner.

[mkemse]

I can't believe his advisers hadn't told him sooner.

Thank you, just my point, if he did not know surely his advisors did, if they did not know, they are not earninig their salalries, and if they did know they had a obligation to tell him

[Logic1]

Thank you, just my point, if he did not know surely his advisors did, if they did not know, they are not earninig their salalries, and if they did know they had a obligation to tell him

but if Fannie May and the rest had "good" accountants then they can write down pretty much anything in the books to "keep" the result and therefore not showing the Federal Government or whatever what is really happening. It is not like they want the world to know how shakey their customers funds really are right!?

I am not defending anything cause it is horrible for the entire world sadly but that is what loads of companies are doing right now and probably will be doing of legislation isnt changed.

[MacGuffin]

I don't know the details of the case. In the UK when a company goes bust there is a pecking order of creditors. The government heads the list for taxes and general suppiers and trade debts are down at the bottom. Staff salaries and director remunerations are in there somewhere. So it is possible that a company has enough to clear some of its obligations (ie salaries) but not all. If the monies to be paid were not in line with the job and seniority and seemed artificially inflated then the authorities would step in and criminal charges could be brought.

[Ragoczy]

A more important question, I think, is should there be a taxpayer bailout of these companies?

[mkemse]

A more important question, I think, is should there be a taxpayer bailout of these companies?

Yes maybe under certain circumstances, there is Indpendnect over sight, the CEO's GET NO money at all no golden parachute, NO extra money and the United State Taxpayers get something back after the loan is paid back
I do not like the idea of the head of the Treausury getting a $700billoin Dollar loan with no accoutabliity to anyone,
My accountabltiy, No over sight committe or person, then no bailout, they did not have any probelm getting in this mess, why should the tax payers get them out of it

[lucy]

Allow a european to give her 2 cents: First i'd like to thank the American people for spending more money than they earned for a pretty long time. It's on of the major reasons why the economies of most of the rest of the world, especially the european, were growing in the past years. (sarcasm only partly intended)


Okay, so think about this:

There are analysts whose job it is to watch these companies and make investment recommendations -- most of them didn't see this coming, at least as badly as it turned out.
Those analysts and rating companies are paid by whom? Yup, you got it, they are paid by the companies they're supposed to rate. And only the most stupid dogs bite the hand that feeds them.


There are pretty smart investors who put money in these companies -- most of them didn't see this coming.
If they didn't see it coming, they were probably not that smart. Because as said above, it was well known that America and the Americans are spending way more than they earned.
I don't know next to nothing about economy, but even i know that every tab must be picked up eventually, by whoever.


There are journalists for financial reporting whose job it is to do nothing all day but investigate and write about these companies -- most of them didn't see it coming.
There was a series of radio features here in Switzerland about a year ago in which a lot of investors and bankers predicted pretty exactly what would happen, and in the meantime has happened. So i guess at least a couple of journalists did their job.

I think the underlying problem is that as long as the party's in full swing, nobody likes to listen up to the bloke who says that they're will be a big mess to be cleaned up the next day. Now the party is over, and the mess is bigger than anyone ever expected.

And i'm truly sorry for American taxpayers to have to pick up that tab.

[MMI]

Originally Posted by Ragoczy

There are analysts whose job it is to watch these companies and make investment recommendations -- most of them didn't see this coming, at least as badly as it turned out.


Those analysts and rating companies are paid by whom? Yup, you got it, they are paid by the companies they're supposed to rate. And only the most stupid dogs bite the hand that feeds them.




Even crooks and conmen have to have one set of true records so they know what truly is what, and how much they've gained or lost ...