Obsolete Certainty

U.S. banks have reportedly been told by Federal regulators not to go public with the results of the so-called government stress test. I seems that the government may be worried that the unwashed masses (aka the taxpayers funding all these bailouts) will be able to determine which of the 19 large banks may not have passed if a bank doesn’t brag about positive results.

Of course there is also the view held by William Black, a former bank regulator, that the stress test exercise is just a “complete sham” derived to fool the unwashed masses into believing everything is fine with the world.

It seems that AIG isn’t the only financial giant that is paying large executive bonuses after being bailed out by the U.S. Taxpayer.  Both Fannie Mae and Freddie Mac, the giant mortgage agencies, are reportedly set to pay over $210 million in bonuses over the next 18 months.

However, absent this time are the steady stream of the usual suspects denouncing the “obscene payments”. Apparently absent this time are the protests outside the homes of employees of Fan and Fred.  Interesting.

Apparently at least one Washington insider is upset.  Iowa Senator Charles Grassley is quoted as saying “It’s an insult that the bonuses were made with an infusion of cash from taxpayers. The elite in Washington and New York need to realize that bonuses for poor performance and at taxpayer expense do a lot of damage to public confidence.”

At least this time Grassley didn’t suggest that Fannie and Freddie executives go Japanese.

Acting Office of Thrift Supervision Director Scott Polakoff has been placed on leave pending an internal investigation of the agency’s role in allowing troubled thrifts to backdate capital infusions.

According to the Wall Street Journal, OTS Chief Counsel John Bowman will run the agency in the interim.

Well. Whaddayaknow!  It turns out that the Obama economic stimulus bill contained a specific clause that permitted the type of executive bonuses that are causing all this rage.  Of course we knew then that few if any one had read the stimulus bill before the vote. I guess that will jump up and bite some folks in the backside.

Link

Congratulations fellow American taxpayer. We are going to write a check fo $165 million to fund executive bonuses at AIG. That is right! And not just any division of AIG, but the AIG financial products division that wrote all those toxic credit default swaps and other derivatives that threatened a financial doomsday.

Edward Libby, the government appointed head of AIG stated that “We cannot attract and retain the best and the brightest talent to lead and staff the AIG businesses – which are now being operated principally on behalf of American taxpayers – if employees believe their compensation is subject to continued arbitrary adjustment by the U.S. Treasury.”

In otherwords, keep sending us money but don’t tell us how to spend it.

More proof that Democrats want you and I to pay more taxes, but don’t believe they should have to pay their fair share. Another day, another Obama appointee.  This time it is former Dallas Mayor Ron Kirk who failed to pay close to $10,000 in taxes related to speaking fees that were donated to charity.

The White House stated that the failure to pay was a minor event.  Sure.  As they make plans to jack up my taxes to bailout every deadbeat banker and homeowner in the country.

It appears the economy must be worse than we thought. Starbucks, famous for its high priced java has decided to become more blue collar.

The coffee chain has decided to add of all things…the combo meal! That’s right. Starbucks will pair a cup of coffee and a breakfast sandwich for under $4. Apparently Dunkin’ Donuts and Mickey D’s really were their competition afterall.

Alabama’s largest county is making preparations for bankruptcy. Jefferson County, stung by rising debt service from $3 billion in bonds has asked their lawyers to begin the process if negotiations with creditors do not succeed. Should the county take this route it would be the biggest municipal bankruptcy since Orange County, California in 1994.

The problems began when the county issued the debt to pay for mandated sewer system upgrades, much of which was issued in the form of auction rate securities.

Ticor Title, a mortgage title insurance company, has sued Countrywide over the title claim to a Chicago home that was reportedly bought and sold THREE TIMES during a period where the previous owner, Randy Johnson, sat mummified in a chair next to his dead dog.

The 2007 loan in question is a $360,000 first mortgage loan on a Victorian on the south side of Chi-town in which Tricor insured title. However, Ticor argues Countrywide was “reckless and grossly negligent in its underwriting of the mortgage.”

It seems that the owner Johnson had grown up in the house but seemingly dropped off the face of the earth in 2005. Cook County officials then discovered that a fraudulent deed had been backdated to 1996, which improperly transferred the property from Johnson’s deceased mother to a woman named Rhonda Evans. Evans then “sold” the house to a Donald Franklin who borrowed the money from Countrywide. The loan reportedly soon went into foreclosure and was then sold to another owner who discovered the bodies of Mr. Johnson and his loyal pet.

An interesting little piece by Matt Nesto on CNBC.com about the market capitalization of General Motors.  GM, which was once the biggest and baddest corporate creature on the planet, now has a market cap of only $7 billion dollars That is drastically down from a market cap of $56 billion in 2000.

To provide context to just how far the mighty have fallen, Matt compares the current GM cap to other U.S. companies.  For example, GM’s market cap is now just one half of that of Avon.  That’s right – Avon.  It is one fifth of the market cap of Ebay.  And it is 1/66 the size of Exxon.