It is just unbelievable that when many of us suffer financially this Christmas, the Wall Street bandits are still paying million dollar bonuses.
Before you¬†get to feeling bad for all those who were not fortunate enough to enjoy a good Christmas because of the economy, here is a heart warming story for you to tell you grandchildren about.¬† I guess hard work¬†does pay off.¬† If you own your own business and did a good job, the P & L (profit and loss) statement would reflect it.¬† If you were the CEO of a¬†corporation and¬†showed a profit at the end of the year you would normally expect a plaque, recognition or perhaps a bonus.¬† One¬†common thread¬†is a good job, a healthy business and profits at the end of the year.
Now we all know that the mean old, green fingered Grinch can be a nasty individual and he likes to show his ugly face around this time of year, right?¬†¬†Let me tell you about one place¬†he was absolutely not welcomed this year.¬† It seems he was banned from visiting the¬†CEO’s of Freddie Mac and Fannie Mae, the mortgage giants.¬† What a relief¬†when I read, just this morning, Christmas morning, that the CEO’s were going to receive their bonuses.
It seems the two chief executives of these mortgage giants may get paid up to $6 million for their hard work during 2009.¬†¬†CEO, Michael Williams¬†or Fannie and Charles Haderman Jr, of Freddie will each receive $900,000 in salary, $3.1 million in deferred payments next year and another $2 million¬†is possible.¬† I know¬†these two executives are relieved to know that all they have accomplished over the¬†past twelve months has not been in vein, someone noticed.¬† What role do these two giants play in the overall scheme of things?¬† Both provide liquidity to the mortgage industry.¬† This is accomplished by purchasing home loans from lenders and then selling them to different investors around the world.¬† They either own or guarantee almost 31 million home loans worth about $5.5 trillion.¬† Now let me get this straight.¬† Isn’t this a little like buying a product at a wholesale price and selling it at a retail price, turn a profit and buy more?¬† It seems to me that someone has fallen down on the job.¬† Obviously there has been no profits and the proof is in the need of taxpayer aid.
Now let us look at the accomplishments of the CEO’s at the helm of these two giants.¬†¬†The government, (you and I, taxpayers) had to inject $111 billion¬† to keep them afloat.¬† It seems that after this injection the request for aid is not over.¬† According to Barclays Capital, it is predicted that the companies will need between $230 billion to $300 billion more.¬† What a relief! For a minute there I was afraid they may run out of money before the bonuses were paid.¬† It seems the Obama¬†administration has set up another $400 billion lifeline, just in case it is needed. Don’t ask me where this is coming from.
Who would approve such bonuses you ask?¬† How about the Treasury Department and the Federal Housing Finance Agency who regulate both agencies.¬† I guess Benny Bernanke is doing his job as well.¬† It just goes to prove that we can all sleep well at night knowing that there are those who are burning the midnight oil on our behalf.¬† Now go cash those bonus checks and let’s celebrate!
Hold up a minute, what about hard work, showing a¬†profit at the end of the year, the P & L statements, what happened to the rules you and I have to play by?¬† I guess¬†what we were told in the¬†beginning of this financial mess is true.¬† There are some that are just too big to fail, and then there is you and I.