Financial Crisis News from the Tar Heel State!

If you have already had your morning coffee and crumpets, pour yourself another shot, curl up on a comfy chair and read this little story from Charlotte, NC. It will set you up nicely for having a warm fuzzy day:

CHARLOTTE, North Carolina: A handful of top executives from American International Group Inc. spent thousands of dollars during a recent English hunting trip, even as the New York-based insurer asked for an additional $37.8 billion loan from the Federal Reserve.
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Last month, and just days after the U.S. government stepped in to save AIG with a $85 billion taxpayer-funded loan, the company picked up a $440,000 tab for a week-long retreat at a posh California resort for top-performing insurance agents.

I'd get mad, but that might be class warfare and I am sure that these business geniuses are worth every penny.

do I catch a whiff of '89?

Social Security might have been.

Since I met Carmen decades ago (she was practically a child) while working briefly for Social Security I have always had a soft spot in my heart for the middle classes favorite Federal Agency. Which leads me to ask: do you remember the Bush plan to privatize Social Security so that your money would be invested in the stock market?

We don't hear so much talk of that anymore. I myself was always stunned by how many soi-disant conservatives wanted this program. They wanted the Federal government to become the biggest single investor in the market with all the resulting distortion, corruption, and old fashioned stupidity (of which we have seen much of late) that would go with it.

Here is one sane conservative's view on it, the Cunning Realist (thanks to Andrew Sullivan):

The stock market crash has shown how catastrophic private accounts would have been, and who would have really benefited from them. Would the government have allowed the Bear Stearns and Lehman outcomes had the Social Security system been chock full of those stocks? Remember, both were former blue chips, the sort of companies that proponents of private accounts insisted any new system would be limited to. The same for Citi, AIG, Fannie Mae, and others. How much pressure would the Fed and Treasury have felt -- and what more would have been done -- to keep those afloat and/or out of penny stock land?

Well, dodged that bullet.

thanks to the socialists, uh, I mean liberals. Oh well.

The wonderful wizards of Wall Street

I just watched the You Tube clip of "The Wizard of Oz" where Toto pulls the curtain back to reveal the pathetic little humbug who has been terrorizing the good folks of Oz into worshiping him like a god.

Reminded me of this article I read this morning in the New York Times about the merger between Merrill Lynch and Bank of America: both led by men formerly hailed as financial wizards.

Which reminded me of my favorite quote about history: a tragedy for those who feel and a comedy for those who think.

I think

Bankers: Just in case you didn't despise them enough

Bank of America, feeding at the public trough while still compensating their executives and managers as if they were little Sun Kings, has a plan for making ends meet. I mean, beyond pleading for another massive bail out from the Feds.

Trick the relatives of deceased credit card holders into thinking they have to pay of the balance of their dead loved one's card.

Here are the details.

kind of gives you a warm fuzzy feeling that they are doing all they can to remain solvent, doesn't it?

.

New word alert!

This one from Peggy Noonan: Goldsmansachs Head

I think there is an illness called Goldmansachs Head. I think it's in the DSM. When you have Goldmansachs Head, the party's never over. You take private planes to ask for bailout money, you entertain customers at high-end spas while your writers prep your testimony, you take and give huge bonuses as the company tanks. When you take the kids camping, you bring a private chef. Goldmansachs Head is Bernie Madoff complaining he's feeling cooped up in the penthouse. It is the delusion that the old days continue and the old ways prevail and you, Prince of the Abundance, can just keep rolling along. Here is how you know if someone has GSH: He has everything but a watch. He doesn't know what time it is.

Schadenfreude. Pure schadenfreude.

well, I always said that as a political analyst Noonan was a good wordsmith.

The Auto Industry

Do you, as a taxpayer, have any stomach for more bailouts? If you do, read this article in the Washington Post today about GM (of which you may be about to become a co-owner).

A spokesman for G.M., Tony Cervone, said Monday that the G.M. board remains supportive of Mr. Wagoner, who became G.M. chief in 2000 and added the chairman’s title three years later. Mr. Wagoner was paid about $24 million a year in 2006 and 2007 from a combination of salary, stock option grants and other forms of compensation. His 2008 base salary is $2.2 million.

“A solid management team is the most important thing you need in the time of a crisis,” Mr. Cervone said.

Don't know about you but I'm feeling better already. "A solid management team."

and worth every penny. As was the 24 billion dollars in dividends the failing GM has paid out over the last decade.