…Since the Great Depression

I think everyone who lives in the US now know how bad this recession is and how worse it can possibly become. In such a short time, we have become an unstoppable economic powerhouse to a nation of staggering foreclosures. This recession has become so severe that the President, Federal Reserve, and the U.S. Treasury are all in panic mode. Many financial articles now seem to compare everything to how this or that compares to the Great Depression.

Bloomberg--The insurer, crippled by losses tied to the worst U.S. housing slump since the Great Depression, agreed to turn over control to the government last week in exchange for a federal loan of as much as $85 billion. The original terms said the U.S. would get warrants equal to a 79.9 percent stake, and that shareholder approval would be sought. A new description filed Sept. 19 omitted any mention of warrants or a shareholder vote.

At least the AIG CEO will be rejecting his $22 million dollar severance package. In the $700 billion taxpayer bailout package, Paulson refused to answer if all the companies we are bailing out will allow the current CEOs to collect there severance packages. The obvious answers should be NO since the monies are coming from the taxpayers who shouldn’t be forced to pick up the tab for failing PRIVATE companies.

Separately, Robert Willumstad, the AIG CEO replaced as part of the U.S. takeover last week, rejected a $22 million severance payment he was entitled to under his contract, said a person familiar with the situation.

Willumstad didn’t take the money because his three-month tenure ended before he could unveil a turnaround strategy and because investors and employees had lost so much on AIG stock, said the person, who declined to be identified because the refusal hasn’t been announced yet. Willumstad informed AIG of his decision in an e-mail to Liddy, the person said.

2 Comments

Subscribe to the Comments

megan, September 22, 2008:

Yes. Ipredicted this two years ago with regards to the mortgage crisis. Anyone who thinks a person who earns $30k a year can afford a $400k home is nuts!!! Instead, we hear more and more about providing affordable low income housing only to see the builders and lenders get more and more of our cash without any liability. To all those homeowners who are in default ask yourself why? Could you afford that home? Do you have toys and multiple new vehicles and cell phones to boot? Ask yourself if you can survive living on bread and water… My parents lived through the Great Depression and this is not even close…. not yet… I save my cash, invest and buy only what I need. Lavish goods are not an option. So I have $60k in cash at hand and little to no debt. Got five more years of house payments at age 40. I am not inclined to pay more for people who could not afford nor even cared to save a dime for themselves. So, I don’t shed a tear at all….

Live within your means…

Megan
megan, September 22, 2008:

Live within your means. All you who live high off the hog and try to impress your neighbor listen up the chicken has come home to roost. And don’t expect me to bail you out… not now not ever… get rid of your toys, second SUV, new cars and crap you only need to impress your friends… start living like the rest of us. I will survive. Have over $60k in cash and little mortgage (5 more years) and no debt. So no I don’t shed a tear for those who are foreclosed on…