Bigtime moguls of Wall Street and International Bankers….seem so distant from the average person. They went to the finest schools or were connected to those that did. They are “elitist to the inth degree”. Don’t get us wrong we aren’t jealous….and we hardly care what someone may do for a living. These guys make unreal annual salaries and get unbelieveable bonus goodies. They are the Corporate Raiders, Insider traders and people who believe that business doesn’t have to have any ethical bounds or conduct required. They go to the finest hotels, have the most expensive retreats, smoke the finest Cuban Cigars in front of our Congresspeople and have no qualms about not taking credit for any wrong doing. When they make Billions a year…like Exxon or other not so high profile companies…..it is all “very clubsy”. They belong to the finest Country Clubs and live the great life. In the 20’s, of “the Great Gatsby”….really has nothing up on modern day Mega Moguls. This is called Super Capitalism…. They saw Bernie Ebbers at World Com, Ken Lay and Jeff Skillings at Enron…and said: “Hey…I can do that!”
Today on Capitol Hill, two of these wonderful people appeared in front of Congress to answer why AIG, Inc. (American International Group) needed an $85 billion dollar bail-out by the Federal Government. Marty Sullivan and Bob Willumstad….presented themselves in a very orderly fashion…stating basically that: “It was OK when I left!”. Neither was able to swallow their enormous pride and simply say: “We made some bad decisions!” They rapped on heavily about Mark to Market rules (Having to value whatever it is at current Market value!) and other regulations that killed the Great Golden Goose…..of “Credit Default Swaps”…..which was based on nothing but “a bet” that either the people would pay off their credit cards, Commercial Paper or other phony examples of “make it up as you go along Capitalism”. Marty Sullivan even had to go back in history to talk about how the sinking of a sailing ship caused a world wide panic. Marty was pulling out all the straws…..but was hard to explain why when he left…..he took a quick $15 million dollar – separation bonus, as AIG foundered.
Congresswoman Jackie Spears told Sullivan….”That he should be ashamed!” Marty didn’t look ashamed……..stalwartly “carrying on”…in the Northern Irish tradition! Meanwhile, the stoic Bob Willumstad tried to keep his head up as he explained that “he didn’t take bonus money he could have..prior to leaving AIG. The Congress briefly mentioned AIG’s other involvement with “Commerical Paper”….another “Unsecured Debt Security”. Today the Federal Government decided to back this bogus paper as well. The vacuum from the draining swamp is causing the flow of recriminations to applify! As a side note, two days before AIG declared bankruptcy…..Standard and Poors and Moody’s had given AIG Bonds a AA minus rating! So much for the accurate rating of bonds!
A week after AIG Exec Bob Willumstad, who was the big honcho at Citibank before coming over to help with Federal Bail Out of AIG…left the company and as the $85 Billion dollar Federal cash came aboard, AIG in their wisdom decided to have a little retreat at a Monarch Hotel….to the tune of $440 thousand dollars….which included $10,000 bucks for drinks, $7000 for Green Fees and the list goes on and on. Hey, it is only the Federal Governments money……who cares?
One last thought, here are the Financial Markets: Bond Market; six types – Stock Market; six types – Foreign Exchange Market – Derivatives Market; six types, the Commodity, Money, OTC, Real Estate and Spot Markets……and that doesn’t count Finance Series – seven types! They have a lot of ways to skin a cat….and it is totally amazing the the size of just the “Credit Default Swaps” market exceeds $62 Trillion dollars. By the way, all of those pieces of paper are currently worth nothing! Finally, the total blame on Sub-Prime Mortgages is finding that although a principle of 10% of our problem…their are lots of other issues! Most troubling of all maybe the selection by Hank Paulson of his pal from Goldman-Sachs Neel Kashkari….to oversea the bail-out cash………the incest seems ongoing!
Well, while I can understand the uneasyness of tasking the people who are responsible for this mess to get us out of it, it is probably the best option, unless we had time to get some fresh people educated about the complex stuff that was going on.
As I am watching the Presidential debate, I keep hearing John McCain saying “this is no time to learn on the job.” I think that applies here as well, as much as I would like to have somebody not tainted to handle this.
*Depends on what school. Harvard or Yale…
rw