Monday, October 6, 2008

CEO of the Day: Richard S. Fuld, Jr.

Richard Severin Fuld, Jr. - Former CEO of Lehman Brothers

I haven't read it all just yet, but jeez, who wrote this man's prepared testimony? There's no way he didn't know for quite some time that his company was going for bust.

Born and raised in New York

M.B.A at NYU's Stern School of Business
ATO frat boy for undergrad at CU-Boulder
Worked for Lehman Brothers for 40yrs
Leader of Lehman Brothers for 15yrs
Served on the Board of Directors for Federal Reserve Bank of New York and the Robin Hood Foundation (It Ain't Right!)
Served on the Board of Trustees for Middelbury College and New York Presbyterian Hospital
Forbes ranked #11 in 2008 for CEO compensation

During questioning by Rep. Henry Waxman it was found that:
Since 2000, He has taken home more than $480 million dollars in company profits
He claims that *for the years that Henry Waxman was asking him about* his cash compensation was *only* close to $60 million, and the rest of what he took out under his options was *only* $250 million - avoiding correction of any actual figures Congress had up on the screen for his compensation

The Next Blog

Have you ever clicked on the next blog option to see what might generate after yours?

Can you say cringeville?

Sunday, October 5, 2008

Constitutional Act of the Day: Community Reinvestment Act

Class, before I begin my explanation as to how our nation was plunged into financial ruin by a combination of Wall-Street and both the Democrats and Republicans in the White house from 1999 to 2008 (yes, that includes Golden Boy Bill Clinton), I would like to prep you with some "of the day" lessons.

We will begin with the Community Reinvestment Act:

If you followed the link and did some reading on your own, you would find out the following...

Year Passed: 1977

Who Passed: Jimmy Carter Administration and the 95th U.S. Congress (both chambers were a Democratic Majority)

What it entailed: It encouraged commercial banks and savings associations to stop redlining practices and lend money to their surrounding communities, mainly low-moderate income neighborhoods providing that is it is monitored by the Fed to ensure "safe and sound operation"

Criticism -OR- What it meant to potential exploiters
"distort credit markets" - OR - expansion into risky investing like Securities and Derivatives

"create unnecessary regulatory burden" -OR- Freddie Mac and Fannie Mae to lend financial backing, the chance for government to make(lose) money in the financial sector, and making up a CRA rating system for banks so government could provide an illusion of accountability.

"lead to unsound lending" -OR- pave the way for unregulated predatory lending (What happened to the CRA rating system?)

"cause the governmental agencies charged with implementing the law to allocate credit"-OR- Government was asking for the banks to lend in the first place, and also promising oversight in lending practices. Why wouldn't financial institutions expect a bailout from government, especially with participation from Fannie Mae and Freddie Mac?

Think about it kids.

Thursday, October 2, 2008

Mr. Gaffe and the Maverick

*Famous quotes taken from CNN (and the V.P. candidates)

Palin said Obama and company do "too much finger-pointing" to stay true to their focus of change

"There have been huge blunders in the war. There have been huge blunders throughout this administration, as there are with every administration"

"But for a ticket that wants to talk about change and looking into the future, there's too much finger-pointing backwards to ever make us believe that's where you're going," she said.

Biden responded with, "Past is prologue."

To which Sarah Palin responded: "The Bush administration opened up access to the Tongass Forest earlier this year to private corporations to build new roads which will sustain jobs and subsistence for the residents of Southeast Alaska, so I too am Pro-Log."