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Thursday, September 11, 2008

Meanwhile, lost amidst the pearl-clutching of the McCain campaign...
Posted by Jill | 6:09 AM
While the McCain campaign is having the vapors over an expression that McCain himself has used in the not-so-distant past, Barack Obama is trying to do something about the atrocity that is the golden parachutes being offered to the heads of Fannie Mae and Freddie Mac as rewards for running their companies into the ground and passing their mismanagement on to future generations via a government bailout:
Senator Barack Obama and two other prominent Democrats urged federal housing regulators on Tuesday to cut the golden parachutes of the ousted leaders of Fannie Mae and Freddie Mac, another sign that the government bailout of those mortgage giants could reverberate through the presidential campaign.

Mr. Obama, the Democratic presidential nominee, asked that any “inappropriate windfall payments” to the chief executives and senior managers of those agencies be voided, in a letter to Treasury Secretary Henry M. Paulson Jr. and the director of the Federal Housing Finance Agency, the new regulator for Fannie and Freddie.

Together, Daniel H. Mudd of Fannie Mae and Richard F. Syron of Freddie Mac are eligible for as much as $24 million in severance, retirement benefits and deferred compensation.

“Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources,” Mr. Obama wrote.


Funny how it's only Democrats in Congress (including Jack Reed of Rhode Island and Chuck Schumer of New York) writing these letters. Perhaps Congressional Republicans approve of these pay packages. Their standard bearer, Sarah Palin John McCain, has given lip service to the rescue not turning into a bailout for executives and investors while on the campaign trail, but is obviously unable to do his job for Americans at the same time.

Meanwhile, another big brokerage house is trying to keep afloat by throwing ballast overboard and a major bank is about to founder as well:
Amid mounting worries about its viability, Lehman Brothers Holdings Inc. said it would unload a chunk of troubled assets, sell a majority stake in its money-management unit and slash its dividend 93 percent.

Its problems shook the rest of the financial sector.

The 158-year-old investment bank announced the moves as it reported a $3.9-billion fiscal third-quarter loss - far bigger than its $2.8 billion second-quarter hit.

The loss came after the Wall Street firm wrote down the assets on its books by $7.8 billion. That included a $5.3 billion reduction on investments tied to residential mortgages. The company, which has operations in Utah and 24,000 employees worldwide, also said it would shift up to $30 billion in commercial real estate assets to a new entity, which will be spun off to shareholders.

To conserve cash, Lehman is chopping its annual dividend to 5 cents a share from 68 cents.

''This is an extraordinary time for our industry and one of the toughest periods in the firm's history,'' CEO Richard Fuld said in a statement.

Fuld, 62, the longest-serving CEO on Wall Street, said the firm would examine all other options - including a total sale of the company he joined right out of college. Finding a buyer might pre-empt any hostile takeovers now that Lehman's stock has plunged from $67.73 a year ago to $7.25 Wednesday, down 54 cents.

The contagion spread to other financial companies. Washington Mutual Inc. plunged 74 cents, or 22.4 percent, to $2.56 after setting a multiyear low of $2.30 earlier. WaMu, among the banks hit hardest by the housing mess, has seen the value of its shares plunge 76 percent this year, as it battles rising mortgage delinquencies and defaults. The drop also signaled that the company's recent CEO shake-up may not have been enough to placate anxious investors.

Shares of Citigroup, JPMorgan, Bank of America Corp. and Wachovia Corp. also fell.

And the dominoes are beginning to fall. Great Depression, anyone? It's coming.

Of course, there is no situation Republicans cannot use for political gain. Keith Olbermann had a special comment last night on their appropriation of the 9/11 attacks into a brand:



...and now a county Republican chairman in Michigan is about to use the foreclosure crisis to throw a bunch of voters off the voter rolls for the November election.

It's no wonder the McCain campaign is resorting to "MAAAA! He called me names!!" If they can get voters to regard Barack Obama as a Mean Tough Black Man Who'll Stick a Knife In Your Gut As Soon as Look At You, they won't bother to look at their own checkbooks.

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