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Originally Posted by samcol
....The heads of a company already get compensated or punished based on their decisions, it's called the free market. Under your plan our company would be gone in less than a month and dozens of employees would be out of work as well.
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Just four posts before
http://www.tfproject.org/tfp/showpos...2&postcount=33
your post #37, I made the exact opposite argument of your <h3>"it's called the free market"</h3>, and I supported my points with three examples from 2007, two of those just happened in the last 75 days....
All three examples SCREAM the opposite of what I quoted above from your post.
Here's more from one of them:
Quote:
http://www.washingtonpost.com/wp-dyn...103000565.html
Merrill CEO Steps Down, Leaves Firm In Crisis
By Tomoeh Murakami Tse
Washington Post Staff Writer
Wednesday, October 31, 2007; Page D01
NEW YORK, Oct. 30 -- E. Stanley O'Neal, the embattled chairman and chief executive of Merrill Lynch, stepped down Tuesday as expected, taking with him a $161.5 million retirement package and leaving behind a company facing portentous questions about its future.
<h3>O'Neal, 56, forced from his job a week after the firm reported an $7.9 billion quarterly write-down</h3> because of aggressive bets in mortgage-related securities, left under pressure from Merrill board members, who had lost confidence in his leadership.
According to a document Merrill filed in the late afternoon with the Securities and Exchange Commission, O'Neal will receive no severance package or cash bonus for 2007. But because he is retiring rather than being terminated, O'Neal will be allowed to keep the stock awards and options that he has accumulated.
These include $131.4 million in stock awards and unexercised stock options, according to the SEC filing. He will also receive a $24.7 million pension and $5.4 million in deferred compensation, and he will be provided with an office and an assistant for up to three years.....
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Note where the stock price was when E. Stanley O'Neal was misleading stock holders, just a few weeks before the addtional, $7.9 billion write down. Nothing material had changed in those few weeks, O'Neill knew of should have known that his company had refused to mark down mortgage backed "instruments" that had become unsaleable because of declining housing valuation and risks of mortgage lending fraud that increased the risks that the "instruments" could be "put back" on issuers such as O'Neill's firm. What do you think O'Neal's september complicity in the "cover up" of impending additional write downs, <h3>cost stock holders who believed him and bought or held their shares?</h3>
<img src="http://chart.finance.yahoo.com/c/3m/m/mer">
From post #33, above:
Quote:
http://biz.yahoo.com/ap/071006/merri...nce.html?.v=64
Merrill Lynch to Post 3Q Loss
<h3>Saturday October 6, 6:48 am ET</h3>
By Stephen Bernard, AP Business Writer
Merrill Lynch to Post 3Q Loss Up to 50 Cents Per Share After Taking $5 Billion in Writedowns
NEW YORK (AP) -- Investment bank Merrill Lynch & Co. said Friday credit and mortgage woes will lead it to post a third-quarter loss, as it takes almost $5 billion in writedowns in the wake of a credit crunch that paralyzed Wall Street this summer.....
....Despite the third-quarter declines,
Merrill Lynch's chairman and chief executive, <h3>Stan O'Neal, said in a statement market conditions have shown improvement and are returning to more normal levels.
Shares of Merrill Lynch rose $1.89, or 2.53 percent, to close at $76.67 Friday.</h3> In general, shares of financial institutions have risen recently after warning of substantial losses, as investors take the caution to mean the worst of the credit crisis is over.....
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Read post #33, Citicorp's CEO did exactly the same as Stan O'Neal:
Quote:
http://www.nytimes.com/2007/10/01/bu...0A&oref=slogin
Citigroup Warns of 60% Earnings Drop in Third Quarter
By ERIC DASH and JULIA WERDIGIER
<h3>Published: October 1, 2007</h3>
...Citigroup said it expects its third-quarter net income to fall to $2.2 billion from $5.51 billion in the period a year earlier as it books losses on loans related to leveraged buyouts, weak fixed-income trading results and the deterioration of complex mortgage-backed securities that contained bad subprime loans. It also said its consumer business would be hurt by higher credit costs.
“Our expected third-quarter results are a clear disappointment,” Charles Prince, the chief executive of Citigroup, said in a statement. “The decline in income was driven primarily by weak performance in fixed-income credit market activities, write-downs in leveraged loan commitments, and increases in consumer credit costs.”
<h3>“We expect to return to a normal earnings environment in the fourth quarter,” Mr. Prince added.</h3>
Mr. Prince faces mounting pressure from investors because of Citigroup’s sluggish stock price. Today’s announcement, in fact, comes four years since Mr. Prince took over as chief executive from Sanford I. Weill. Its stock price was in the $47 to $49 range in October 2003. This morning, it slumped at the opening bell before staging a rally as investors were cheered that the company was putting the worst of the subprime and credit crisis behind it. Its shares closed up more than 2 percent, at $47.72....
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Can you differentiate between a worker who is fired for poor job performance and misleading statements, having little impact on the rest of the world, but leaving the company with possibly a few thousand dollars, vs. the outcomes of O'Neal and Prince? O'Neal walked with a huge fortune and free office space, and Prince:
Quote:
http://in.ibtimes.com/articles/20071...s-mortgage.htm
Citigroup gives ex-CEO Prince $40 million severance package
By Dan Wilchins
Posted 10 November 2007 @ 10:05 am GMT
New York - Citigroup Inc, the largest bank in the United States, said on Thursday that its former Chairman and Chief Executive, Charles Prince, will take home roughly $40 million as he retires from the company.
The package is less than a quarter of what former Merrill Lynch Chief Executive Stan O'Neal was awarded when he was ousted from the investment bank last week.
The terms of Prince's retirement include the vesting of options estimated to be worth $1.28 million, the vesting of deferred stock estimated to be worth $16.05 million and the vesting of restricted shares worth $10.7 million.
The package also includes a little more than 83 percent of his 2006 bonus and stock awards of about $23.8 million, adjusted for the total shareholder return for 2007, which is so far a decline of about 38 percent. That totals another $12.3 million or so.
Citi said on Sunday that Prince was retiring amid billions of dollars of expected fourth-quarter writedowns for securities linked to subprime mortgages. Citi wrote down $6.8 billion in the third-quarter.
Citi shares have fallen for eight straight sessions, in a slump <h3>that has chopped $48.5 billion off the bank's market capitalization.... </h3>
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It boggles my mind that I'm here posting this "S old S", just a few posts apart.
I'm taking pains to more clearly spell it out:
The CEO of the largest US financial broker, assured the public that "the worst was behind", as did the CEO of the largest US bank. Stock prices after the assertions were stable to higher, the market believed the two CEO's.
No later than in five weeks after that, the brokerage announced an additional $7.9 billion writedown, and the bank:
Quote:
http://www.msnbc.msn.com/id/21600857/
updated 9:20 p.m. ET, Sun., Nov. 4, 2007
NEW YORK - A month after foretelling a better future for Citigroup Inc., Charles Prince has no future of his own at the nation’s largest financial institution....
....Prince’s widely expected departure from the positions of chief executive and chairman came Sunday at an emergency meeting of Citi’s board, at which <h3>the company also decided to take $8 billion to $11 billion in writedowns>/h3>. Citi already took a hit during the third quarter of $6.5 billion from asset writedowns and other credit-related losses.....
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Four days ago, I <a href="http://www.tfproject.org/tfp/showpost.php?p=2347452&postcount=15">posted</a> the following on another thread, the well documented reporting of Citicorp's 1920's ancestor, National City Bank, and the criminality of it's top officer:
<h3>Your "leave it to the freemarkets" opinion does not do well if you click the preceding link and read my post, and it's not a new problem. The predecessor of Citicorp, National City Bank, was rife with similar corruption, 75 to 80 years ago:</h3>
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Jackie Corr: Ferdinand Pecora, an American Hero
Scheduled to follow Mitchell was National City Director and Anaconda Copper Chairman John D. Ryan. ... But others would come before Pecora and the Senate. ...
www.counterpunch.org/corr01112003.html - 27k - Cached - Similar pages - Note this
Damnation of Mitchell - TIME
Few hours later the directors of National City Co. accepted the resignation of President Hugh Baker. Mr. Mitchell and Mr. Baker returned to Washington for ...
http://www.time.com/time/magazine/ar...5272-4,00.html - 36k - Cached - Similar pages - Note this
Citibank - Wikipedia, the free encyclopedia
In 1933 a Senate investigated Mitchell for his part in tens of millions ... By 1969, First National City Bank decided that the Everything Card was too ...
en.wikipedia.org/wiki/Citibank - 57k - Cached - Similar pages - Note this
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samcol, "the stuff" that I posted four days ago was intended to overwhelmingly support my contention that the "free market", "free" because of a lack of 1920's government regualtion and oversight of banks and brokers, was the reason for the creation of the SEC, FDIC, and the passage by congress
of
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Glass-Steagall Act - Wikipedia, the free encyclopedia
Two separate United States laws are known as the Glass-Steagall Act. The Acts (Glass & Steagall) were both reactions of the U.S. government to cope with the ...
en.wikipedia.org/wiki/Glass-Steagall_Act
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The "free market".... the banks and brokerages...lobbied for years for repeal of Glass-Steagall and they were partially successful in the last few years.
Now we're seeing a blurring of the former separation of bank and brokerage activities, and banks are less financially sound becaue they were newly permitted to take larger stakes (added risk) in their brokerage subsidiaries. This imperils the FDIC bank deposit insurance fund.
The bullshit O'Neal and Price presided over and misled the public about, along with partial repeal of Glass-Steagall acts, lead us to this:
Quote:
http://money.cnn.com/2007/08/24/maga...ion=2007082417
....August 24 2007: 5:09 PM EDT
NEW YORK (Fortune) -- In a clear sign that the credit crunch is still affecting the nation's largest financial institutions, <h3>the Federal Reserve agreed this week to bend key banking regulations to help out Citigroup (Charts, Fortune 500) and Bank of America</h3> (Charts, Fortune 500), according to documents posted Friday on the Fed's web site.
....The regulations in question effectively limit a bank's funding exposure to an affiliate to 10% of the bank's capital. But the Fed has allowed Citibank and Bank of America to blow through that level. Citigroup and Bank of America are able to lend up to $25 billion apiece under this exemption, according to the Fed. If Citibank used the full amount, "that represents about 30% of Citibank's total regulatory capital, which is no small exemption,"
says Charlie Peabody, banks analyst at Portales Partners.
The Fed says that it made the exemption in the public interest, because it allows Citibank to get liquidity to the brokerage in "the most rapid and cost-effective manner possible."
So, how serious is this rule-bending? Very. One of the central tenets of banking regulation is that banks with federally insured deposits should never be over-exposed to brokerage subsidiaries; indeed, <h3>for decades financial institutions were legally required to keep the two units completely separate. This move by the Fed eats away at the principle.....</h3>
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samcol, the FDIC insures bank deposits and it's reserves covering insured deposits of $100.000 per account, benefit the "little guy", and are paid by the little guy. FDIC member banks pay lower rates on insured accounts than they would it they were not paying FDIC deposit insurance. O'Neal, Prince, et al, have weakened the FDIC, as the preceding article makes clear.
Samcol, I urge you to rethink this:
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Originally Posted by samcol
The heads of a company already get compensated or punished based on their decisions, it's called the free market. ....
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<h3>I've done my damnedest to argue that the exact opposite is closer to fact.</h3>
The SEC should be filing charges against O'Neal and Prince for pimping their stocks and playing a huge part in influencing the DJIA and the S&P 500 to climb to new record highs on Oct. 9th.....
O'Neal and Prince, instead, "walk" with more than $200 million in combined final payments from the companies they led. The leadership of the SEC was appointed by Bush. The SEC was created to act in the public interest. It doesn't "need" to be dismantled, it needs to have a board appointed that will follow it's mandate.