Category Archives: mortgage crisis

Lehman Bros CEO in front of Oversight committee today..

Its on Cspan, and Richard Fuld is humble as hell. You can watch it on TV or online here. He has tried to blame the whole mess on people not paying their mortgages.

Give me an effin’ break dude. Reuters has a writeup here. From the Reuters article:

Excessive executive pay will be a theme at the hearing. Multimillion-dollar salaries and golden parachutes for exiting executive has been a hot topic of debate as the House and Senate worked to craft bills to bail out foundering financial institutions.

Fuld received $22 million in bonuses alone for 2007, although he is not receiving a golden parachute.

Fuld, who in a four-decade career at Lehman deftly steered the company through the Asian debt crisis of 1998, is widely seen as having been far to slow to recognize the bank’s need to raise capital and shed bad assets prior to its collapse.

Lehman, the biggest investment bank to collapse since 1990, listed $639 billion in assets at the end of May in its bankruptcy filing.

How can anyone say $22 million for one year isn’t a golden parachute? He allowed a company to dissolve into insolvency for christ’s sake. Kucinich is grilling him now.

On Tuesday, the committee will rake former AIG CEOs Robert Willumstad, Martin Sullivan and Maurice “Hank” Greenberg over the coals.

I will put up video when I locate some..its ironic as hell to watch this guy try to explain away how Lehman Brothers fell apart and what the government can do to make it all better.

Update: Here is some video of Waxman and Fuld:

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AIG now begging for bail out funds..

With BofA poised to buy the fucked up Merrill Lynch and Lehman brothers taking a huge ass shit…now we see AIG is on their knees and begging for Federal Aid. From the NYT:

The American International Group is seeking a $40 billion bridge loan from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said Sunday night.

Ratings agencies threatened to downgrade the insurance giant’s credit rating by Monday morning, allowing counterparties to withdraw capital from their contracts with the company. One person close to the firm said that if such an event occurred, A.I.G. may survive for only 48 hours to 72 hours.

A.I.G.’s sickly financial health emerged late into one of the most tumultuous days in Wall Street history. Lehman Brothers, the 158-year-old investment bank, is expected to file for bankruptcy protection Sunday night, while Bank of America has agreed to buy Merrill Lynch for $50.03 billion.

It has already raised $20 billion this year. But even that enormous capital raise may not be enough.

This is horseshit. These firms need to suck it up or fail, I don’t give a shit who they are. Fuck the investors, they sure has hell aren’t worried about what I pay to fill my gas tank, or what it costs to buy a small bag of groceries these days. Fuck em all. They might actually have to sweat a bit…just like the rest of us.

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B of A buys Countrywide..

In a deal that saves the ass of the nation’s largest mortgage lender, Bank of America has agreed to buy Countrywide in a ‘stock-only’ sale. Countrywide has been rumored to of been considering a Chapter 11 filing recently with the value of their stock at a garbage rate of $5 a share in December. “As of Sept. 30, Countrywide’s savings bank held about $79.5 billion of loans as investments. Three-quarters of these loans were second-lien home-equity loans — where Countrywide doesn’t have first crack at the collateral in case of default”-according to the Wall Street Journal.

The WSJ has a nice explanation of what it all means here. The person who makes out like the bandit he is in this deal?

Why, the founder of Countrywide of course. Chief Executive Angelo Mozilo. Angelo might be taking home a nice little golden parachute of..wait for it…

$70 million bucks

Yep, that ain’t a typo folks. Meanwhile the stockholders will get: 0.1822 shares of Bank of America for each share of Countrywide. Yes, that is a big fat fucking zero in front of that decimal point. Sure, they now will own stock in the largest bank in the US, but damn, that trade-off sure doesn’t look real inviting does it? Bank of America gets a company that was valued at one time the amount of $24 Billion, and they got it for the bargain basement price of $4 Billion.

Oh, and Angelo will also get his countryclub dues paid through the year 2011 and get to use the corporate jet. Chuck Shumer had this to say about Angelo’s sweet deal:

“Mr. Mozilo could display some good will by donating any severance pay he stands to receive to the nonprofit housing counselors trying to prevent foreclosures,”

Somehow, I doubt that will happen Chuckie..