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Is the U.S. Going Broke?
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Author Topic: Is the U.S. Going Broke?  (Read 54599 times)
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« Reply #15 on: September 26, 2008, 05:36:09 AM »

Senator Bernie Sanders - Vermont
Any company that is too big to fail is too big to exist! Bernie Sanders spells out the true origins of our Wall Street meltdown.


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« Reply #16 on: September 26, 2008, 05:48:56 AM »

Every Time There's A Crisis, They Create Fear! Sen Sanders

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« Reply #17 on: September 26, 2008, 06:59:13 AM »

WaMu Wipeout: 'Gross Mismanagement' by Former CEO Killinger
Posted Sep 26, 2008 12:52pm EDT by Aaron Task in Investing, Newsmakers, Recession, Banking
Related: WM, JPM, BAC, C, XLF, WFC, WB

Washington Mutual paid former CEO Kerry Killinger $14.4 million in 2007 and over $54 million from 2002-07, Forbes reports. In return, the nearly 120-year-old firm was led into the biggest bank failure in U.S. history.

Under Killinger's watch, WaMu rushed headlong into toxic mortgage-backed products like option-ARMs, which contributed mightily to the company's epic failure. Thursday evening, the Federal Deposit Insurance Co. seized Washington Mutual's assets and then quickly sold most of the firm to JPMorgan, effectively wiping out the thrift's shareholders and debt holders in the process.

Also vaporized: The $7 billion investment TPG made in WaMu last spring -- after Killinger declined an $8 per share offer from JPMorgan, which might have looked low then but sure as heck beats zero.

"Gross mismanagement" is how Henry Blodget describes Killinger's oversight of the company. I'm sure many of WaMu's investors, employees and depositors would prefer terms unsuitable for publication, especially when they learn current WaMu CEO Alan Fishman is entitled to $11.6 million in cash severance and to keep his $7.5 million signing bonus, The New York Times reports. (Not bad for about three weeks of work.)

Meanwhile, the fact JPMorgan took an immediate $31 billion write-down of WaMu's loan portfolio -- and raised $10 billion via an equity offering -- has major implications for how other banks are valuing their assets (and liabilities).

http://finance.yahoo.com/tech-ticker/article/73916/WaMu-Wipeout-%27Gross-Mismanagement%27-by-Former-CEO-Killinger?tickers=WM,JPM,BAC,C,XLF,WFC,WB
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« Reply #18 on: September 27, 2008, 06:24:12 AM »

WaMu Gives New CEO Mega Payout as Bank Fails

Nice work — if you can get fired from it.

That's just what one Alan H. Fishman might have thought when he woke up Friday morning.

Fishman was the new chief executive officer for Washingon Mutual — WaMu — the nation's largest savings and loan, which was taken over Thursday night by federal bank regulators and quickly dumped in a fire sale to JPMorgan Chase for the Wal-Mart-like price of $1.9 billion.

But don't cry for Fishman, who reportedly was sky-high — literally — last night, on a flight from New York to Seattle, when WaMu collapsed. Even though he's only been on the job for less than three weeks, he's bailing out with parachute worth close to $20 million, according to an executive compensation analysis conducted for the New York Times by James F. Reda Associates.

That's right, $20 million for 17 days on the job ... and his company failed.

Fishman, who formerly was chairman of Meridian Capital Group, apparently was much coveted by WaMu, which was counting on him to lead the failing thrift out of mortgage troubles that pushed the bank to a $3.3 billion second-quarter loss.

According to filings with the Securities and Exchange Commission, WaMu threw a $7.5 million bonus at Fishman when it hired him on Sept. 8, and guaranteed him an immediate cash severence of $11.6 million — both of which he gets to keep.

He also was eligible for annual bonuses of up to 365 percent of his annual base pay — set at $1 million — to go with millions of shares of company stock.

Fishman does lose out on a big bonus that would have kicked in had he remained on the job through 2009.

Documents show WaMu was going to pay their new boss $8 million to simply not screw up and get fired — all negotiated as the Seattle-based banking giant's loses climbed to an estimated $20 billion.

http://www.foxnews.com/story/0,2933,428641,00.html

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wtf?


« Reply #19 on: September 28, 2008, 07:51:25 AM »

I feel for all of the WaMu investors who lost one hell-of-a-lot of money, but WaMu brought it upon themselves and the investors lost their @$$e$.
Five years ago my significant smother and I were looking for financing for the home we are in now. A co-worker had a "good" experience with a WaMu loan officer so we went to him (MFR). Up front we told him we did not want a variable rate loan, 30 year fixed and nothing else. Both of our credit scores at the time were above 700 so that should not have been a problem. He took all of our info and said to come back in 2 days and he would have 3 different proposals for us. When we went back all 3 proposals were variable rate loans. We told him we had specified fixed rate only and he gave us the same BS so many were dumb enough to buy into, so we went elsewhere.
Any problems WaMu had were created by them and no-one else.

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« Reply #20 on: September 29, 2008, 04:32:18 AM »

Wachovia didn't fail? Only because FDIC arranged a last minute deal to save them before they actually did fail.

 AP
Citigroup to buy Wachovia banking operations
Monday September 29, 10:15 am ET
By Sara Lepro, AP Business Writer
Citigroup will buy Wachovia's banking operations; FDIC says Wachovia did not fail

NEW YORK (AP) -- In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.

Citigroup will absorb up to $42 billion of losses from Wachovia's $312 billion loan portfolio, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC.

The deal greatly expands Citigroup's retail outlets and secures its place among the U.S. banking industry's Big Three, along with Bank of America Corp. and J.P. Morgan Chase & Co. But it comes at a cost -- Citigroup said Monday it will seek to sell $10 billion in common stock and slashed its quarterly dividend in half to 16 cents to shore up its capital position.

The agreement comes after a fevered weekend courtship in which Citigroup and Wells Fargo & Co. both were reportedly studying the books of Wachovia, which suffers from mounting losses linked to its ill-timed 2006 acquisition of mortgage lender Golden West Financial Corp.

Wachovia, like Washington Mutual Inc., which was seized by the federal government last week, was a big originator of option adjustable-rate mortgages, which offer very low introductory payments and let borrowers defer some interest payments until later years. Delinquencies and defaults on these types of mortgages have skyrocketed in recent months, causing big losses for the banks.

The FDIC asserted Monday that Wachovia did not fail, and that all depositors are protected and there will be no cost to the Deposit Insurance Fund.

Federal Reserve Chairman Ben Bernanke, in a statement Monday, said he supports the "timely actions" taken by the FDIC "which demonstrate our government's unwavering commitment to financial and economic stability."

Treasury Secretary Henry Paulson also welcomed the sale of Wachovia to Citigroup, saying it would "mitigate potential market disruptions." Paulson said he agreed with the FDIC and the Fed that a "failure of Wachovia would have posed a systemic risk" to the nation's financial system.

"As I have said before, in this period of market stress, we are committed to taking all actions necessary to protect our financial system and our economy," Paulson said.

As details of its takeover unfolded, Wachovia shares plunged 91 percent to 94 cents. The stock had closed Friday at $10, down 74 percent for the year.

Now that a deal for Wachovia is complete, the most troubled of the nation's largest financial institutions have been dealt with. However, the FDIC estimated there were 117 banks and thrifts in trouble during the second quarter, the highest level since 2003. And that number is likely to have increased during the third quarter.

With the acquisition of Wachovia, Citigroup has reclaimed its title as the biggest U.S. bank by total assets. Including Wachovia, the bank now has assets of $2.91 trillion, as of June 30. That could change, however, as Citigroup shrinks its balance sheet, a decision Chief Executive Vikram Pandit made in May to rid the bank's books of risky debt.

In terms of current market capitalization, Bank of America Corp. remains the largest U.S. bank, followed by JPMorgan Chase & Co. in second and Citigroup in third place.

Just a short time ago, Citigroup was under the scrutiny of investors who worried about the possibility of its collapse given its massive exposure to mortgage-backed securities. The New York-based bank has not turned a profit for three straight quarters, and lost a total of $17.4 billion during that period after writing down its assets by about $46 billion. That's the most write-downs of any U.S. bank.

But the government's proposed $700 billion bailout plan could prove to be the deal's silver lining.

While the plan broadly aims to prevent banks from profiting on the sale of troubled assets to the government, there is an exception made for assets acquired in a merger or buyout, or from companies that have filed for bankruptcy.

This detail could allow Citigroup to sell toxic mortgages and other assets it gained from Wachovia for a higher price than the bank actually paid for them.

The Wachovia deal caps a wave of unprecedented upheaval in the financial sector in the past six months that has redefined the banking industry, starting with the government-led forced sale of Bear Stearns Cos. to JPMorgan in March.

The failure of IndyMac Bancorp in July reignited investors' fears about the stability of the financial sector, which led to the eventual takeover of struggling mortgage lenders Fannie Mae and Freddie Mac.

Earlier this month, officials seized both Fannie and Freddie, temporarily putting them in a government conservatorship, replacing their chief executives and taking a financial stake in the mortgage finance companies.

After U.S. regulators made it clear that they would not bail out struggling investment bank Lehman Brothers Holdings Inc., rival Merrill Lynch & Co. arranged a hasty deal to be bought by Bank of America Corp. for $50 billion in stock.

Lehman Brothers was subsequently forced to declare bankruptcy, the largest ever in the United States. Investor concerns quickly turned to American International Group Inc., the nation's largest insurer. Staving off a failure that could have sent shock waves throughout the global markets, the federal government injected an $85 billion emergency loan into the insurer.

Just days later, the government seized Seattle-based Washington Mutual, marking the largest bank failure in U.S. history. WaMu's deposits and assets were acquired by JPMorgan for $1.9 billion.

These events have now culminated in extraordinary moves by the federal government to try to fix the financial crisis that began more than a year ago. Lawmakers are to vote Monday on an unpopular $700 billion plan to rescue troubled financial companies.

Wachovia's problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the nation's housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West's specialty, which let borrowers skip some payments.

This summer, Wachovia reported a $9.11 billion loss for the second quarter, announced plans to cut 11,350 jobs -- mostly in its mortgage business -- and slashed its dividend. Wachovia also boosted its provision for loan losses to $5.57 billion during the second quarter, up from $179 million in the year-ago period.

AP Business Writers Jennifer Malloy Zonnas and Madlen Read in New York contributed to this report.

http://biz.yahoo.com/ap/080929/wachovia_citigroup.html
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« Reply #21 on: September 29, 2008, 05:11:06 AM »

We Are Under Martial Law! As Declared By The Speaker Last Night! Rep Burgess!

Congressional Martial law and Martial law as we know it are different. Congressional simply rushes bills through by sort of forcing them to the vote before general public really knows anything about it.

"The last official act of any government is to loot the nation. The liberty of a democracy is not safe if the people tolerate the growth of private power to the point where it becomes stronger than the democratic state itself. That in its essence is fascism - ownership of government by an individual, by a group or any controlling private power."

Franklin D. Roosevelt


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« Reply #22 on: September 29, 2008, 06:44:05 AM »

http://www.youtube.com/watch?v=_MGT_cSi7Rs
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« Reply #23 on: September 29, 2008, 10:49:40 AM »

The bail out bill didn't pass in the House.  G.W. Bush said he was very disappointed.  To all you Democrats:  Does it make you wonder where the Democratic leaders stand when they push so hard to pass legislation that Bush wants?
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« Reply #24 on: September 29, 2008, 01:00:52 PM »

They should all be taken out and shot.

Then start over.
Whatever happened to the common man being able to become President?  Now they're all lawyers etc.. Criminals if you ask me.
Bring back 'ol Hickory!!!!

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« Reply #25 on: September 29, 2008, 08:23:09 PM »

All the troubles in the financial system that are coming to light now didn't arise overnight. They have been building up for decades. Growth in our economy is based on ever increasing debt. How irresponsible is that? Can debt keep increasing forever for the sake of growth with no consequences? Who has the most influence over the law makers/politicians in congress? Answer; corporations that shower them with money to get them to loosen regulations so they can make even more money. Greed, how about the last ceo of Washington Mutual on the job for 17 days and makes $20 million as the bank fails, is it just me or is there something wrong with that picture? This is a cycle that repeats itself every so many decades. Last time it got this bad was the Great Depression. Who was it that said "what we have learned from history is that we don't learn from history". Most of the people that lived through the Depression aren't around anymore. Now we have the "want it all now generation" by means of massive debt. Gone are the memories of "debt revulsion" brought on by the hardships of the Depression. It's not entirely their fault, they are constantly bombarded with offers of easy credit and advertisements that are difficult to resist. We have become a nation of financial services, a service based economy. We've shipped our jobs and factories overseas. Now what? We will recover from this, but it's just going to take some time and lots of changes.
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« Reply #26 on: September 30, 2008, 04:45:13 AM »

Protect savings, (bank deposits like checking, saving, CD, IRA, etc.)  As far as speculators are concerned, screw them. 
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« Reply #27 on: September 30, 2008, 05:57:52 AM »

Protect savings, (bank deposits like checking, saving, CD, IRA, etc.)  As far as speculators are concerned, screw them. 

A measure to raise the FDIC insurance to 250k is gaining support.


Mike Huckabee weighs in on the bailout

Huckabee on the $700B bailout
News Type: Event — Wed Sep 24, 2008 5:19 PM EDT
politics, huckabee, bailout, tax, fraud, economy
Jonathan D. Miller

I got this email from Mike Huckabee, and I agree with him 100%. Its a shame that the Republicans did not choose him!

    Frankly, I'm disappointed and disgusted with my own Republican party as I watch them attempt to strong-arm a bailout of some of America's biggest corporations by asking the taxpayers to suck up the staggering results of the hubris, greed, and arrogance of those who sought to make a quick buck by throwing the dice. They lost, but want the rest of us to cover their bets so they won't be effected in their lavish lifestyles as they figure out how to spend their tens of millions and in some cases, hundreds of millions in bonuses and compensation which was their reward for not only sinking their companies, but basically doing the same to the entire American economy.

    It's especially disconcerting to see the very people who pilloried me during the Presidential campaign for being a "populist" and not "understanding Wall Street" to now line up like thirsty dogs at the Washington, D. C. water dish, otherwise known as Congress, and plead for help. I thought these guys were the smartest people in America! I thought that taxpayers like you and I were similar to the people at the U. N. who have no translator speaking into their headset - that we just needed to trust those that I called the power bunch in the "Wall Street to Washington axis of power."

    The idea of a government bailout in which we'd entrust $700 billion to one man without Congressional oversight or accountability is absurd. My party or not, that is insanity and I believe unconstitutional.

    Will there be far-reaching consequences without some intervention? Probably, but we honestly don't know since we've really never seen this level of greed and stupidity all rolled into one massive move. But may I suggest that letting "Uncle Sugar" step in and bail out the billionaires who made the mess will be far worse and will start a long line of companies and individuals who will demand the same of the government---which last time I checked means that they will be demanding it out of YOU and ME. This is not money that Congress is risking from THEIR pockets or future, but ours. Many if not most of us have already experienced lost value on our homes, retirement accounts, and pensions. Now they'd like for us to assume some further risks so they won't have to.

    What happened to the "free market" idea? Is that only our view when we WIN and when we LOSE, we ask the government to come in and take away the pain?

    If you are a small business owner, is this the way it works at your place? When you have a bad month, a bad year, or face having to close, can you go up to Congress and get them to write YOU a fat check to take away your risk?

    Some of what contributed to this disaster is too much government in the form of Sarbanes/Oxley. Some is due to the tax structure that created the hunger for companies to "game" the system. Some is the common sense that was ignored like loaning money to people who can't pay it back.

    Wall Street has become Las Vegas east, but at least in Vegas, people KNOW they are gambling and they don't expect the government to cover their losses at the tables. In Wall Street, they do. And the American taxpayer burdens the responsibility.

    If Congress wants to do something, here are some suggestions:

    1. Eliminate ALL capital gains taxes and taxes on savings and dividends right now. Free up the capital and encourage investment. This is the kind of economic stimulus the Fair Tax would bring and if Congress is going to lose money, let them lose it with lower taxes, not with public dollar bailouts of private market mistakes.

    2. Repeal Sarbanes/Oxley. It has failed. It was supposed to prevent this. It didn't. Kill it.

    3. Demand that the executives who steered their ships into the ground be forced to pay back the losses of their companies. Of course, they can't, so let them work and give back to the government and they can live like the people they put on the streets or kept there. It makes no sense to put them in jail—that's just more they will cost you and me. I'd rather them go out and earn money—just not get to keep so much of it this time. I'm not talking about limiting CEO salaries---just those of the people who now are up in Washington begging for help because they ruined their companies.

    Attempts by Democrats and Republicans to blame each other is nonsense. They are both guilty and ought to own up and admit it. They all lived off big campaign contributions and the swill of the lobbyists who strong armed them into permission to steal. Enough of blame. Fix it!

    This would be a start. If we don't hold these guys responsible, we are all finished.

http://jdmiller82.newsvine.com/_news/2008/09/24/1906909-huckabee-on-the-700b-bailout

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« Reply #28 on: September 30, 2008, 06:28:17 AM »

The 5 representatives who represent Oregon in Congress and how they voted on the bailout:

Representative David Wu (D - District 01) - no
Representative Greg Walden (R - District 02) - yes   
Representative Earl Blumenauer (D - District 03) - no
Representative Peter A. DeFazio (D - District 04) - no
Representative Darlene Hooley (D - District 05) - yes

voting record: http://www.transworldnews.com/NewsStory.aspx?id=63183&cat=0
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« Reply #29 on: September 30, 2008, 05:21:39 PM »

Huckabee...I loved that guy.  I just had a problem with the religion thing.  Good to see most of our reps have a brain.  Admin, any idea how our Senators may vote?
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