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  • Tue, Dec 2 2008
  • 12:03 PM » Mortgage Security Holder Stands-Up - Could Cost BofA $80 Billion
    Published Tue, Dec 02 2008 12:03 PM by
    Just a few months after the Attorneys General of 15 states threw hundreds of thousands of Countrywide/Bank of America mortgagees under the bus with a piddly $8.4 billion settlement, someone is striking back. And Greenwich has the size, background and relationships to actually get somewhere. In all of the recent events surrounding bailouts and loan modifications, one very prominent party in this whole mess has been missing - the mortgage security (MBS) holders. Not any longer. With $7 trillion in securitized mortgages out there, this could be the very first of a major story unfolding over the next year. One in which the MBS holders finally stand up and banks, investment banks and mortgage lenders become ultimately responsible for the loans that they made and eat their own trash. Securitization massively expanded home ownership in recent years by allowing investors to price the risk of less credit-worthy borrowers. But investors in some of the prime securities are angry about having to foot the bill for reworking the most risky mortgages. The chief risk manager for a mortgage investment company, who spoke on condition of anonymity, said that BofA isn’t paying for the modifications out of its own pocket, but “out of the bondholders’ money. That’s pretty egregious The legality of that structure—and the impact of any changes on bondholders—weren’t the top priorities of the attorneys general of California, Illinois, and at least five other states that last summer filed lawsuits accusing Countrywide of violating laws against predatory lending. Their complaints allege that Countrywide engaged in many deceptive sales practices, charged unlawful fees and interest rates, and made mortgage loans that Countrywide had no reasonable basis to think the borrowers could afford. All of that, the states claimed, was in violation of predatory lending laws. Bank of America/Countrywide Slap on the Hand The AG’s say their $8.4 billion ‘victory’ will help some 400k homeowners. When you do the...
    Click Here to Read the Full Article

  • 12:02 PM » FHA Cash Cushion Has Fallen by 39%
    Published Tue, Dec 02 2008 12:02 PM by
    The audit, prepared by Integrated Financial Engineering Inc. of Rockville, Md., estimated the economic value of the FHA's insurance fund was $12.9 billion as of Sept. 30, down 39% from a year earlier. ... The estimated value of the fund as of Sept. 30 worked out to 3% of total loans insured by the FHA, down from 6.4% a year ago. Federal law requires the ratio be at least 2%. If the FHA runs short of money to pay claims, Congress would have to provide taxpayer funds to make up the difference. The share of new mortgages insured by the FHA jumped to 26% in this year's third quarter, from just 3% for the full year of 2007, according to Inside Mortgage Finance, a trade publication. Now that the subprime market has collapsed, the FHA is shouldering most of the risk on loans to people who can't afford more than a small down payment. The audit's assumptions about house prices are based on July forecasts by Global Insight Inc., a research firm. Since July, the housing market has continued to deteriorate. Thomas Lawler, an independent housing economist based in Leesburg, Va., said he sees a risk that losses on FHA loans will be large enough to require Congress to replenish the reserves. ... Effective Oct. 1, the FHA raised the up-front premiums charged to most borrowers to 1.75% of the loan amount from 1.5%. The annual premiums paid by borrowers are 0.5% to 0.55% of the loan balance. Borrowers can get FHA-insured loans with down payments as small as about 3%. That minimum will rise to 3.5% next year. But because house prices have been falling sharply, many FHA borrowers already owe more than the current value of their homes . Note the part in bold. And with HR 6694, they are trying to bring back seller-funded downpayments -- essentially 100% subprime lending for FHA. This will be a disaster. Some might even say criminal robbery of the taxpayer, and shameful shepherding of people into foreclosure.
    Click Here to Read the Full Article

  • 12:01 PM » Hedge Fund Sues Bank of America Over Countrywide Mortgage Modifications
    Published Tue, Dec 02 2008 12:01 PM by Seeking Alpha
    submits: The New York Times reports that hedge fund claims it would lose money if Bank of America (BAC) modified Countrywide mortgages. The modifications result from a . Greenwich further claims that the trust agreements require Countrywide to buy back any modified mortgages at face value. Countrywide said that the plaintiff is trying to unlawfully “assert the rights of the trusts.” Countrywide claims to be acting in the best interest of the trust investors, adding: “Loan modifications have been occurring for decades without objections or challenges, so we are especially troubled at the timing of this complaint. We are confident any attempt to stop this program will be legally unsupportable.”
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 12:00 PM » Podcast on the Federal Reserve
    Published Tue, Dec 02 2008 12:00 PM by
    I did a long interview today with Tom Keene of Bloomberg Radio on the current recession and Federal Reserve policy. You can listen to it by .
    Click Here to Read the Full Article

  • 11:59 AM » Jim Rogers on Markets and Bailouts
    Published Tue, Dec 02 2008 11:59 AM by The Big Picture
    Part I ‘ Part II Part III Part IV November 16, 2008
    Click Here to Read the Full Article

    Source: The Big Picture
  • 11:58 AM » Beazer Homes Loss Balloons as Revenue Plunges
    Published Tue, Dec 02 2008 11:58 AM by CNBC
    Struggling homebuilder Beazer Homes says fiscal fourth-quarter losses more than tripled as revenue plunged and income taxes ballooned. Topics: | | | Sectors: Companies: MEDIA:
  • 11:57 AM » Home sellers suffer amid wave of foreclosures
    Published Tue, Dec 02 2008 11:57 AM by CNN
    Selling a home in this market is hard enough. Competing in a neighborhood flooded with foreclosed homes that are heavily discounted is nearly impossible.
  • 11:56 AM » JPMorgan to cut 9,200 Washington Mutual jobs
    Published Tue, Dec 02 2008 11:56 AM by Reuters
    NEW YORK (Reuters) - JPMorgan Chase & Co said on Monday it will eliminate about 9,200 jobs at the former Washington Mutual Inc, which on September 25 became the largest U.S. bank to fail.
  • 11:55 AM » Smaller Mortgage Lenders See Opportunity
    Published Tue, Dec 02 2008 11:55 AM by WSJ
    As many of the biggest U.S. banks continue to reduce mortgage lending, some regional institutions are picking up market share.
  • 11:54 AM » Deutsche Bank Sues Trump
    Published Tue, Dec 02 2008 11:54 AM by WSJ
    Deutsche Bank sued Donald Trump over an outstanding balance on the developer's troubled Chicago condominium and hotel project.
  • 11:54 AM » U.S. Rethinks Roles of Fannie, Freddie
    Published Tue, Dec 02 2008 11:54 AM by WSJ
    The economic crisis will force the U.S. to decide how to repair Fannie, Freddie, the Federal Home Loan Banks and the Federal Housing Administration.
  • 11:54 AM » Houses That Sit — Blue Carpet, Bad Feng Shui, Bad Design
    Published Tue, Dec 02 2008 11:54 AM by
    I couldn’t resist bringing to light a funny blog post I saw recently by . She wrote a post in ActiveRain titled, “.” It’s refreshing to see this kind of frankness from an agent and it should be required reading for anyone selling their home. Of course, I’m sure it’s not easy to tell a seller that their blue carpet is really a no-no, or their countertops need to be replaced, but it was fun to read. Other things that are turn-offs, according to Robin: Bad feng shui — Homes with stairs that start right in front of the front door and continue straight up to the second floor. Bad chi — Homes that are located on a street where there’s a T-intersection in front. Also, homes at the end of cul-de-sacs. Puzzling rooms — Homes with non-traditional rooms. (i.e., a garage had been partly converted to a room). After all, agents and brokers see hundreds of homes a year and after a few years in the business, I’m sure they know immediately what houses will fly off the market and what homes will sit. Need to be inspired? View some gorgeous , , and ideas in our . You might even see a blue carpet floating around in there! (The blue carpeted room I found in the photo above is not really blue, but a bluish-green).
    Click Here to Read the Full Article

  • Mon, Dec 1 2008
  • 3:28 PM » Investors sue Countrywide to force loans purchase
    Published Mon, Dec 01 2008 3:28 PM by Reuters
    NEW YORK (Reuters) - A group of bond investors on Monday sued Bank of America -owned Countrywide Financial demanding that Countrywide buy every mortgage loan for which it agrees to reduce the payments under a predatory lending settlement agreement.
  • 2:58 PM » Bush: `I'm sorry' the economic crisis is occurring
    Published Mon, Dec 01 2008 2:58 PM by Washington Post
    WASHINGTON -- President George W. Bush expressed remorse that the global financial crisis has cost jobs and harmed retirement accounts and said he'll back more government intervention if needed to ease the recession.
    Click Here to Read the Full Article

    Source: Washington Post
  • 2:57 PM » The Fed: Bernanke says Fed still has arrows in quiver
    Published Mon, Dec 01 2008 2:57 PM by Market Watch
    The Federal Reserve has lowered interest rates just about as far as they can go, but the U.S. central bank still has plenty of available firepower it could deploy to restore financial markets to normal, Fed Chairman Ben Bernanke says.
  • 2:57 PM » Voluntary Foreclosure Moratorium Launched in Florida
    Published Mon, Dec 01 2008 2:57 PM by
    Well, it looks as if a foreclosure moratorium has made its way to the Sunshine state, though it’s not as cut and dry as similar proposals. The proposal is voluntary, and relies on the member institutions of the Florida Bankers Association and the Florida Credit Union League to hold off on foreclosures for 45 days on [...]
    Click Here to Read the Full Article

  • 2:57 PM » Poor Oversight to Blame for Mortgage Crisis
    Published Mon, Dec 01 2008 2:57 PM by
    Many consumers, economists, homeowners, and lenders alike have been scratching their heads for months now, wondering what led to such an unprecedented housing crisis. And while there may not be one answer (no, it’s not the mortgage brokers’ fault), but rather a combination of forces behind the ongoing crisis, a lack of regulation is certainly to [...]
    Click Here to Read the Full Article

  • 1:54 PM » For Manhattan, The Issue Is Now Those Maintenance Fees
    Published Mon, Dec 01 2008 1:54 PM by CNBC
    Posted By: Given the chance to chat with several co-op owners, I asked the expected question: Will all the Wall Street layoffs really put a bullet in the island’s real estate market? The answers were mixed, some citing the still-high demand for housing in a city with relatively limited supply. Topics: | | | Sectors: | MEDIA:
  • 1:54 PM » J.P. Morgan sees Fed cutting rates to zero in Jan
    Published Mon, Dec 01 2008 1:54 PM by Reuters
    NEW YORK (Reuters) - The Federal Reserve will lower its policy rate to zero percent by January in its attempt to avert a prolonged recession and to revive the struggling credit market, according to J.P. Morgan Securities analysts.
  • 1:54 PM » Bush Officials Delayed Crackdown on Risky Mortgages
    Published Mon, Dec 01 2008 1:54 PM by CNBC
    The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. Topics: | | | | | | | | | Sectors: | Companies: | MEDIA:
  • 12:20 PM » Mortgage insurers see defaults rise again in October
    Published Mon, Dec 01 2008 12:20 PM by Market Watch
    Insured mortgage defaults rose again in October, but the number of loans brought up to date also increased, according to a report by Mortgage Insurance Companies of America. The association of the largest mortgage insurers said Monday that 80,071 mortgages with insurance went into default last month, or became 60 days past due, up 4.3% from September. In April, one lender changed its default reporting, making figures before April not directly comparable to monthly figures since then. Mortgage cures, or mortgages that are brought up to date, rose 4.4% in October to 43,211 and the highest level since June.
  • 11:01 AM » Freddie Mac Issues Another $1 Billion In Five-year Notes
    Published Mon, Dec 01 2008 11:01 AM by
    Freddie Mac Issues Another $1 Billion In Five-year Notes
    Click Here to Read the Full Article

  • 11:00 AM » AIG sells its Private Bank
    Published Mon, Dec 01 2008 11:00 AM by CNN
    Read full story for latest details.
  • 11:00 AM » Trillions in Credit Line Cuts Ahead: Whitney
    Published Mon, Dec 01 2008 11:00 AM by CNBC
    The credit-card industry may pull back well over $2 trillion of lines over the next 18 months banking analyst Meredith Whitney said. Topics: | | | | Sectors: | MEDIA:
  • 11:00 AM » RBS promises mortgage respite
    Published Mon, Dec 01 2008 11:00 AM by
    The political and public campaign to force Britain's banks to do more to help customers weather the economic downturn will gain impetus today with a promise from Royal...
  • 10:46 AM » Construction Spending Declines in October
    Published Mon, Dec 01 2008 10:46 AM by Calculated Risk Blog
    The Census Bureau reported this morning that private non-residential construction decreased in October with declines in both residential and non-residential spending. I expect that non-residential investment will decline sharply over the next year or two. From the Census Bureau: Spending on private construction was at a seasonally adjusted annual rate of $756.5 billion, 2.0 percent (±1.1%) below the revised September estimate of $771.9 billion. Residential construction was at a seasonally adjusted annual rate of $338.8 billion in October, 3.5 percent (±1.3%) below the revised September estimate of $351.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $417.7 billion in October, 0.7 percent (±1.1%)* below the revised September estimate of $420.6 billion. Click on graph for larger image in new window. The graph shows private residential and nonresidential construction spending since 1993. Nonresidential spending had been strong as builders completed projects, but there is substantial evidence of a slowdown - less lending for new projects, less work for architects - and it appears the expected slowdown in non-residential spending has arrived. On the graph nonresidential spending has been relatively flat for the last few months, but I expect some serious cliff diving over the next 18 months. The second graph shows the year-over-year change for private residential and non-residential construction spending. The YoY change in non-residential spending is starting to slow down and will probably turn negative later this year or early in 2009. It now looks like investment in non-residential structures will negatively impact GDP in Q4. This had been one of the few bright spots for the economy.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 10:45 AM » Will Obama Stand By His Foreclosure Moratorium and Bankruptcy Promises?
    Published Mon, Dec 01 2008 10:45 AM by
    Below are promises made to Main Street homeowners during President-Elect Obama‘s campaign in his own words from “The final plan must provide help to families who are struggling to stay in their homes. We cannot simply bailout Wall Street without helping the millions of innocent homeowners who are facing foreclosure.” Obama September 2008 “Going forward, [...]
    Click Here to Read the Full Article

  • 10:45 AM » Housing Update - How Far To The Bottom?
    Published Mon, Dec 01 2008 10:45 AM by
    Inquiring minds have been asking for another housing update. My previous update was was on February 15,2008 in . I did not remember Bernanke's comments at the time but looking back now they sure seem funny. CNBC is reporting . Federal Reserve Chairman Ben Bernanke told lawmakers Tuesday he expects the downtrodden U.S. housing sector to improve by the end of the year, a senator who participated in the closed-door meeting said. "He let us believe that the housing situation should begin to ameliorate by the end of the year," said Sen. Pete Domenici, a New Mexico Republican, told reporters. Using the Japan Nationwide Land Prices model as my guide, here is how I have called things in real time. click on chart for sharper image I just added the Winter 2008 arrow. Housing prices are now one notch closer to their final destination. The US Timeline scale is compressed. At the current pace, housing will bottom in about 7 years vs. 14 years in Japan. Flashback March 26 2005 The initial data point was established in the post on March 26, 2005. Here are some excerpts from that post. Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that "South Florida is working off of a totally new economic model than any of us have ever experienced in the past." He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely. "I just don't think we have what it takes to *** the bubble," said Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an optimist during the 90's. "I don't think prices are going to fall, and I don't think they're even going to be flat." Gregory J. Heym, the chief economist at Brown Harris Stevens, is not sold on the inevitability of a downturn. He bases his confidence in the market on things like continuing low mortgage rates, high Wall Street bonuses and the tax benefits of home ownership. "" he...
    Click Here to Read the Full Article

  • 10:45 AM » Loan Delinquency Data Suggest We're Nowhere Near a Great Depression II
    Published Mon, Dec 01 2008 10:45 AM by Seeking Alpha
    submits: The chart above shows delinquency rates for business and agricultural loans at all U.S. commercial banks from 1987:Q1 to 2008:Q3 using recently released through the third quarter. In both cases, delinquency rates for agricultural and business loans are close to all-time historical lows, and especially for business loans (1.61%) far below the 3.92% peak in the second quarter of 2002 following the last recession and far below the 6% peak during the 1990-1991 recession.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • Sun, Nov 30 2008
  • 8:25 PM » 19,000 WaMu Employees Will Be Synergized Out Of A Job
    Published Sun, Nov 30 2008 8:25 PM by
    Forbes is reporting . Up to 19,000 employees of Washington Mutual face being laid off this weekend as JPMorgan Chase turns up the synergy on its recent acquisition. On Friday, JPMorgan Chase (JPM) said it expects to retain the 22,000 employees who work at Washington Mutual branches and 2,000 workers in the mortgage and wealth management divisions in California, spokesman Tom Kelly told The company has not yet determined the total numbers to be cut in other states, but it planning to inform all former WaMu employees of their job status by Monday. WaMu had about 43,000 employees as of June, according to a filing with the Securities and Exchange Commission. Combined, Chase and WaMu have about 5,400 branches. The company said it only plans to close about 10.0%. The bulk of the job cuts will be at the Washington Mutual headquarters in Seattle due to the overlap in operations with the current employees at JPMorgan. Merger Synergizing Expect to see more synergizing from all mergers we have seen. Here is a list of synergy discussions now doubt underway. JP Morgan and Washington Mutual Bank of America and Countrywide Financial Bank of America and Merrill Lynch JP Morgan and Bear Stearns Wachovia and Wells Fargo More Synergizing Coming Still more synergy will come from hundreds of regional banks that have not yet gone under but will as the The Federal Deposit Insurance Corp. said Tuesday the list of banks it considers to be in trouble shot up nearly 50 percent to 171 during the third quarter -- yet another sign of escalating problems among the institutions controlling Americans' deposits. The 171 banks on the FDIC's "problem list" encompass only about 2 percent of the nearly 8,500 FDIC-insured institutions. Still, the increase from 117 in the second quarter is sharp, and the current tally is the highest since late 1995. Banks that don't make the list can end up collapsing anyway -- the two biggest bank failures over the past year, Washington Mutual...
    Click Here to Read the Full Article

  • 8:25 PM » Report: Trump Entertainment to Miss Payment
    Published Sun, Nov 30 2008 8:25 PM by Calculated Risk Blog
    From MarketWatch: Trump Entertainment Resorts will have to skip a $53.1 million interest payment scheduled for Monday on its 8.5% senior secured notes due 2015 in order to maintain sufficient liquidity. The casino operator has a 30 day grace period to make the payment. Not the best of times for casinos ...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 4:46 PM » CB Richard Ellis: CRE "Conditions have deteriorated" Rapidly
    Published Sun, Nov 30 2008 4:46 PM by Calculated Risk Blog
    "Conditions have deteriorated on a scale and with a speed that no one could have predicted just a few months ago. Market conditions of unprecedented strength are roiling the world's financial markets. The global economy is either in, or close to, recession and 2009 is not likely to be a year of great recovery." Brett White, president and chief executive officer of CB Richard Ellis, recent letter to clients, from the LA Times: And a few months ago White wasn't exactly optimistic: “Decreased investment volumes have now become evident in all parts of the world. ... I can best describe the current environment as being very challenging and still having a high probability of getting worse before we see improvement." Brett White, president and chief executive officer of CB Richard Ellis,
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 4:46 PM » Rubin says not to blame for Citi's troubles: report
    Published Sun, Nov 30 2008 4:46 PM by Reuters
    NEW YORK (Reuters) - Former U.S. Treasury secretary Robert Rubin said the near-collapse of Citigroup Inc , where he is a senior counselor, was due to the buckling financial system and not his own mistakes, according to an interview published on The Wall Street Journal's website on Friday.
  • 4:31 PM » Rubin: ‘Nobody Was Prepared’ for Crisis of ‘08
    Published Sun, Nov 30 2008 4:31 PM by The Big Picture
    “What came together was not only a cyclical undervaluing of risk [but also] a housing bubble, and triple-A ratings were misguided. There was virtually nobody who saw that low-probability event as a possibility.” > With that line, former Treasury Secretary Robert Rubin, and current Citibank board member, shredded what little reputation he had left. Rubin’s attempts at defending his tenure at Citi struck me as totally disingenuous. While some may uncritically accept that nonsense as fact, we know better. Many people had been warning of housing busts, excess credit creation, and derivatives for quite some time. Quite a few people were discussing this. Warren Buffett had warned about derivatives years prior. Even Merrill Lynch, and their savvy chief economist David Rosenberg, noted in August of 2004 the potential damage the housing and credit boom and bust could cause. Rubin blamed financial system, not any errors of his own at Citi. And his defense of Greenspan is, in my opinion, the work of a guilty conscious. He and Greenie both supported, and even pushed for: • Repeal of Glass Steagall • Exempting of Derivatives from Regulation • Encouraging Citi to take on more leverage in 2004 • Ultra-low interest rates during, and after the 2001 recession All of these are factors directly related to the subsequent leverage boom and bust. Here’s part of the piece: “Mr. Rubin, senior counselor and a director at Citigroup, acknowledged that he was involved in a board decision to ramp up risk-taking in 2004 and 2005, even though he was warning publicly that investors were taking too much risk. He said if executives had executed the plan properly, the bank’s losses would have been less. Its troubles have put the former Treasury secretary in the awkward position of having to justify $115 million in pay since 1999, excluding stock options, while explaining Citigroup’s $20 billion in losses over the past year and a government bailout of at least $45 billion… Since 1999, the bank has lurched...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 4:31 PM » Bailout Gravy Train
    Published Sun, Nov 30 2008 4:31 PM by The Big Picture
    Click Here to Read the Full Article

    Source: The Big Picture
  • 2:57 PM » No Real Estate Bubble in Central U.S.
    Published Sun, Nov 30 2008 2:57 PM by Seeking Alpha
    submits: The top chart above (click to enlarge) shows the OFHEO House Price Indexes for , , and , just recently updated through the third quarter 2008.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 2:57 PM » The ownership society takes another hit
    Published Sun, Nov 30 2008 2:57 PM by
    It is not at all clear how (or if) the investing public is going to recover from the 2008 plunge in equity markets following the ongoing plunge in home prices that began in 2006. Many were led to believe that, in a worst case scenario, stock appreciation and real estate appreciation would alternate indefinitely into the future. If one went down, the other would go up. If they both went up, well, that was a bonus. No one thought too much about what it would feel like if they both went down. About every other day now, another story comes my way about a friend or relative who says, "Yeah, I sold everything in October. I couldn't take it anymore". It's not difficult to understand that decision making process. There are enough things in life for ordinary citizens to worry about that overcoming the "fight or flight" instinct that makes us all such lousy investors doesn't rise very high on the list. You have to wonder how they're handling it over at Money Magazine. The perma-bull staff has toned down their rhetoric in recent months as it became clear that no quick reversal was forthcoming. Last month's cover story was about keeping your money "safe" while you're waiting for the rebound. Unless somehow we see Dow 14,000 again sometime soon (or at least Dow 10,000), the mainstream financial media and Wall Street firms are going to have a lot to answer for as it becomes increasingly clear that the ownership society that has been thrust upon Americans has not produced the results that were expected. This well-done in the Wall Street Journal tells the story of how Wall Street has failed the individual investor, a concept that more and more people are beginning to realize. With retirement accounts tumbling and millions of homeowners struggling to pay their mortgages, a realization is dawning on many Americans: The banks, brokerage firms, insurance companies and other players in the financial-services industry have failed them...
    Click Here to Read the Full Article

  • Fri, Nov 28 2008
  • 9:12 AM » Shiller: Crisis May Run for `Years and Years'
    Published Fri, Nov 28 2008 9:12 AM by Calculated Risk Blog
    This is in three parts (each part 10 minutes). The other .
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 9:12 AM » AIG Plans to Pay Retention Bonuses to Executives
    Published Fri, Nov 28 2008 9:12 AM by Google News
    How can you give cash compensation to an executive, yet claim it is not a salary or bonus? You call it a "retention bonus," No, I am not making this up. Note that AIG chose to make this disclosure the day before Thanksgiving, clearly choosing a time when it would attract the least notice. Not that it really matters. The talk about restricting executive compensation to bailout recipients has been just that, talk. From the : One day after announcing strict limits on salaries and bonuses for its top tier of executives, AIG revealed that some of those executives will receive millions in “retention bonuses” next year... The retention bonuses for 130 key executives were disclosed by AIG in September, after the US government rescued the firm from bankruptcy by purchasing 79.9 per cent of the company for $85bn. After the government takeover, Edward Liddy, the former Allstate chairman, was named chief executive and AIG offered retention bonuses to Mr Wintrob, head of AIG’s retirement services division, among others.... The company announced on Tuesday that Mr Liddy would be paid a salary of $1 for 2008 and 2009, and that Paula Rosput Reynolds, who joined AIG as chief restructuring officer in October, would receive no salary or bonus for 2008. The company said the other five members of AIG’s seven-member leadership group would not receive annual bonuses for 2008 or salary increases through 2009. AIG also said that the company’s senior partners, about 60 executives, would not earn long-term performance awards in 2008, not earn salary increases in 2009, and that the group’s annual bonuses would be limited. An AIG spokesman said on Wednesday that retention bonuses were different from the annual bonuses included in Tuesday’s statement. In September, Mr Liddy pledged to sell off significant portions of AIG’s international operations in order to pay back the government loan. The company said at the time that retention bonuses would be necessary to maintain continuity and value...
  • 8:59 AM » Meltdown far from over, new mortgage crisis looms
    Published Fri, Nov 28 2008 8:59 AM by Washington Post
    WASHINGTON -- Black Friday's retail shoppers hunting for holiday bargains won't be enough to stave off what's likely to become the next economic crisis. Malls from Michigan to Georgia are entering foreclosure, commercial victims of the same events poisoning the housing market.
    Click Here to Read the Full Article

    Source: Washington Post
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