Devil in details in mother of all bailouts
Wake up and good morning. Now that the initial shock of a MEGABAILOUT is wearing thin, the fight over the details begins. Take the supercritical matter of how to value vast amounts of mortgage-backed securities that no one wants to buy but the government has agreed to buy. Pay too much, and the government will look like "patsies of the securities industry," says a USA Today story. Pay too little, and the Treasury will drive some financial services companies out of business. Questions also are starting to emerge about unintended consequences and collateral damage. Even former President Jimmy Carter has concerns.
Now comes word FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers and insurer American International Group (AIG) and their senior executives for potential mortgage fraud. My only question is: Where was the FBI before all this? And what about all this rising grassroots disgust over executives of bailed-out institutions getting too much pay? There ought to be a law, and, well, that's another matter that will prove controversial. Speaking of pay, here's a look at what some of those top execs received:
Lehman Brothers CEO Richard Fuld Jr. made $34-million in 2007. Lehman filed for Chapter 11 bankruptcy protection earlier this month. AIG CEO Martin Sullivan was paid $14-million in 2007. The insurance giant gets an $85-billion federal bailout. Fannie Mae CEO Daniel Mudd received $11.6-million in 2007, while Freddie Mac CEO Richard Syron got $18-million. The federal government is taking over both mortgage backers.
Heads up, job-seeking veterans. There's a a free hiring event for job seekers who have military backgrounds in Tampa on Wednesday, Oct. 1, presented by the military-to-civilian recruiting firm RecruitMilitary. This career fair will take place from 11 a.m. until 3 p.m. at the Tampa Bay Performing Arts Center and here's how to get there. So who will be there? Among those now planning to participate: the Army National Guard, Brinks Home Security, Computer Sciences Corp., DeVry University, GlaxoSmithKline, Laird Plastics, MatchPoint Franchise Consulting Network, Miami-Dade County Public Schools, the Military Spouse Corporate Career Network, Northrop Grumman Technical Services, Plastipak Packaging, The Entrepreneur's Source, Troops to Teachers, the U.S. Secret Service, the Veterans Benefits Administration and Woodmen of the World.
Finally, never keep your eye off the long-simmering water war in Florida (and beyond). St. Petersburg Times reporter Craig Pittman notes that a controversial proposal to route water from one part of the state to another, scuttled after a huge uproar five years ago, may be revived as part of an Orlando gathering this week to plot the future of Florida's water supply. For those with a long memory, the state business group called the Florida Council of 100 recommended to then-Gov. Jeb Bush that water could be redirected from water-rich and slower-growing North Florida to thirsty, booming Central and South Florida. Here's the complete 2003 report with introductory letters from the task force chairmen and real estate developer Lee Arnold of Clearwater and then-CEO of WCI Communities (now in Chapter 11) Al Hoffman.
-- Robert Trigaux, Times Business Columnist