In my opinion the legislation was all for show and had no real provisions to limit executive pay for bailed out financial institutions but now we have an even worse situation.
CBS MarketWatch is reporting the Treasury released interim rules for the banks receiving the $250 Billion
Some of the corporate governance and executive compensation rules in the original bailout legislation have since been softened by interim final rules drawn up by the Treasury as part of its plan to inject capital into banks.
I think that its fair to say that a number of us here suspect that a fair number of those populating the financial establishment are there by virtue of being the idiot children of America's aristocracy. Some of us have probably even said as much. This though is far less entertaining than watching one of their own come out and say it.
On Friday that's precisely what happened. Andrew Lahde, a manager at a Los Angeles based hedge fund sent an email out to all in his firm telling them that he was quitting the game and:
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
Considering how Lehman Brothers just received subpoenas for criminal violations, I thought we might revisit Enron. Isn't it wonderful how we have scandal, hearings and a few get busted but most....simply move on to yet another bubble?
Wow! Knock me over with a feather. I wonder if these guys get surprised when the sun rises every morning?
So much for that story. A few days ago, when Hank Paulson called the heads of the nine families to Washington and shoved cash down their throats, he announced that the banks would use this new taxpayer cash to lend. They won't, of course. They'll hoard it like a starving family who has just been given a grocery cart full of food.
And after a few days of silence, even the banks are finally admitting that.
NYT: , John Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. Executives at other banks privately expressed a similar view.
The government's effort to boost bank lending to end the credit crisis is hurting one of the areas critical to the nation's recovery: mortgage rates. In the past week, the average mortgage rate on a 30-year fixed home loan has jumped more than one half a percentage point to 6.74%, according to Bankrate.com. That might not sound like much, but it is the biggest one-week rise in the normally stable lending rate in 21 years. Some economists say mortgage rates could soon top 7%, a level they have not seen in more than six years.
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No, I have not lost my mind, although with a slew of just awful economic data for September and October spilling out, the title of this blog entry is a contrarian statement to say the least. What I mean is, measured by the indicators of past recessions going back all the way through the Great Depression, the shallow recession that I believe started approximately last December, and primarily affected Wall Street with only a glancing blow at Main Street, ought to be ending.
ShopperTrak RCT Corporation’s Retail Traffic Index (SRTI) today reported that total U.S. foot traffic for the month of September fell a sharp 9.3 percent while the company’s National Retail Sales Estimate reported retail sales fell 1.0 percent for the same period – the first year-over-year sales decline since March 2003.
….
On a weekly level, ShopperTrak’s NRSE reported sales for the week ending October 11 fell a 2.7 percent as compared to last year, while weekly sales fell 0.6 percent versus the previous seven day period ending October 4.
Meanwhile,
U. S. consumer confidence suffered its steepest monthly drop on record in October, a survey showed Friday, as the worst financial crisis since the Great Depression sent shocks waves through the economy.
A few months ago I asked "Is China's bubble bursting?" Here's a brief update, from Bloomberg today:
China's economy probably expanded at the slowest pace in almost four years in the third quarter .... Gross domestic product grew 9.7 percent from a year earlier, according to the median estimate of 12 economists surveyed by Bloomberg News
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Growth is slowing across Asia, where Japan's economy shrank in the second quarter and Singapore has tumbled into a recession.
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Export orders fell to the lowest since 2005 in the third quarter ..... More than 3,600 Chinese toy exporters, about half of the total, closed in the first seven months of this year, according to the official Xinhua News Agency.
Housing prices in Shanghai fell 19.5 percent in the third quarter from the previous three months, according to real estate broker Savills Plc.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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