Herman Cain,If You're not Rich 'Blame Yourself'

[Neil D]

When an arm or leg has a severe cut, or a broken limb, the best thing to do is to sew up the cut or set the broken limb...that is the treatment of choice...

Amputation is not considered the treatment of choice....nor is applying a bandaid when more invasive operations are necessary...

[lazarus]

It was the home mortgage part of the bank that caused them to fail, or nearly fail. Yet banks have lots of departments other than home mortgages. The overwhelming majority of the bonuses that were being paid out were being paid out by the profitable departments of the banks to their employees.

NOPE:

AIG planned to award about 4,600 of its managers and employees a total of about $1 billion, Bloomberg News reported in January, citing two people familiar with the situation. In addition to $450 million for employees in the financial products unit that sold credit-default swaps, AIG was to give about $470 million to staff of three other subsidiaries and $148 million to top executives, according to the people and company filings.

http://www.huffingtonpost.com/2009/03/17/cuomo-reveals-details-of_n_175865.html

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Pay good bonuses to those doing a good job in the five profitable departments and scale back the operations in the one losing department.

"Again, these payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG," wrote Cuomo. "Thus, last week, AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout."

He provided the numbers collected thus far by his office.

The top recipient received more than $6.4 million;

The top seven bonus recipients received more than $4 million each;

The top ten bonus recipients received a combined $42 million;

22 individuals received bonuses of $2 million or more, and combined they received more than $72 million;

73 individuals received bonuses of $1 million or more; and

Eleven of the individuals who received "retention" bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million.

AIG was bailed out to the tune of $170 Billion dollars. The government took as 75% stake in the company. This was not just the case of a struggling department. This was a case of a company that was bankrupt. It was done! The government decided it was too big to fail. AIG would not exist if it were not for that injection of cash.

Bonuses were paid to the SAME departments that had the biggest losses. There was accounting fraud at AIG to inflate its reserves. Companies that insured the flawed mortgages also benefited from the bailout. Executives benefited. This was part of the biggest heist in history.

[Dr. Shane]

Yes, bonuses were given across the board. I didn't say they were not. My point was that most of the employees of the banks that received bonuses did not work in the home mortgage divisions. But even those in the home mortgage divisions need to be retained and thus compensated. How are we going to get out of this mess? Don't we need skilled bankers in mortgage divisions to help us get out? If so, we need to pay them.

To take their bonuses away is the same as taking a waitress's tips away or taking a salesman's commission away. Bonuses are part of these employees wages.

It is class envy and covetousness that makes one want to take away the bonus of another. That is not only wrong, it is shamefully wrong. I am a Commandment-keeping Christian and that includes the 10th Commandment. How can I call myself a Seventh-day Adventist and complain about a banker getting a bonus?

Banks do what the government allows them to get away with. In the nation where we are working in Africa, the bank there wanted to charge our company 10% to wire our payment to our bank in Europe. The payment was $3 million. That means they wanted $300,000 to wire the money. Since we are working for the government we were able to get that country's President's office involved and the bank lowered its fee to 1% - still that is $30,000 for a wire transfer. Like I said, blaming the banks for this disaster is like blaming a cat for eating meat left out on the counter. Banks are in business to make money from money. The government must regulate them. This financial crisis is the government's fault - both parties. Most of the blame is on Congress as the President did try to do something.

[Kyran]

In the same way, bonuses were part of these bank employee salaries. Those that were against giving the employees their bonus were counting on the fact that most Americans wouldn't have a full understanding of the banking industry. They were right. Denying their bonus was like denying a salesman his commission.

[bonnie]

It's important to realise just these bonuses are paid for. It's similar to a real estate agent, they get paid for making a sale. What do they sell? Loans. A banker has a finacial incentive to make a loan, even if it is a bad one. If they manage to cram it through the review process and get management to OK it, they get their money.

Put yourself in the shoes of the unfortunate economist reviewing these loans. For every one he'd write a bad report for, he'd be coming inbetween a banker and his money.

Before the big push for all to own a home the banker made blame

sure there was a better than reasonable chance it would be repaid.The banker was not interested in bad loans in the least.

We have bought and sold 14 homes.In each we had to be credit worthy,employment verification and have the down payment without borrowing it.We had to show where the money for the down payment had come from.

When it became possible to pass loans on to Freddie Mac and Fannie Mae what did people think would happen.

When non-qualifying loans became possible it was inevitable.

I know more than one that have purchased homes without money down or even a job.Hard to believe but it was cheaper than rent.They simply did not make payments after purchase and lived in the homes for up to 18 months rent/payment free.

A aquaintance of mine took out a mortgage for 185,000,no job,lousy credit history and stayed in the home without paying a dime for almost 2 years

[bonnie]

All the Devils are Here

http://en.wikipedia.org/wiki/Fannie_Mae

In All the Devils Are Here, Bethany McLean and Joe Nocera paint an interesting portrait of the GSEs, including Fannie. Fannie had been aggressive in its political fights with Wall Street and Congress in the 1980s. In the 1990s Fannie ramped up the 'cut them off at the knees' strategy against political enemies. Tactics included a massive lobbying effort, neutering the OFHEO (its 1992-created regulator), creating a "partnership office" network to court the politically powerful with pork, giving high level employment to the well connected, giving out campaign contributions, creating a charity foundation, and threatening critics like FM Watch with retaliation. One of McLean & Nocera's sources even compared Fannie's activities to Tammany Hall.

McLean and Nocera also claim that Fannie 'gamed' its affordable housing numbers, with a process that was referred to internally as "stupid pet tricks". The National Community Reinvestment Coalition, National Association of Affordable Housing Lenders, and studies by the Department of Housing and Urban Development all found the GSEs lacking in their actual, real support of affordable housing. Accounting controversyIn late 2004, Fannie Mae was under investigation for its accounting practices. The Office of Federal Housing Enterprise Oversight released a report on September 20, 2004, alleging widespread accounting errors.

Fannie Mae was expected to spend more than $1 billion in 2006 alone to complete its internal audit and bring it closer to compliance. The necessary restatement was expected to cost $10.8 billion, but was completed at a total cost of $6.3 billion in restated earnings as listed in Fannie Mae's Annual Report on Form 10-K.

Concerns with business and accounting practices at Fannie Mae predate the scandal itself. On June 15, 2000, the House Banking Subcommittee On Capital Markets, Securities And Government-Sponsored Enterprises held hearings on Fannie Mae

On December 18, 2006, U.S. regulators filed 101 civil charges against chief executive Franklin Raines; chief financial officer J. Timothy Howard; and the former controller Leanne G. Spencer. The three are accused of manipulating Fannie Mae earnings to maximize their bonuses. The lawsuit sought to recoup more than $115 million in bonus payments, collectively accrued by the trio from 1998–2004, and about $100 million in penalties for their involvement in the accounting scandal.

Conflict of interestFurther information: Countrywide financial political loan scandal

Further information: Friends of Angelo program

In June 2008, the Wall Street Journal reported that two former CEOs of Fannie Mae, James A. Johnson and Franklin Raines had received loans below market rate from Countrywide Financial. Fannie Mae was the biggest buyer of Countrywide's mortgages The "Friends of Angelo" VIP Countrywide loan program included many people from Fannie Mae; lawyers, executives, etc

Fannie Mae and Freddie Mac have given contributions to lawmakers currently sitting on committees that primarily regulate their industry: The House Financial Services Committee; the Senate Banking, Housing & Urban Affairs Committee; or the Senate Finance Committee.[citation needed] The others have seats on the powerful Appropriations or Ways & Means committees, are members of the congressional leadership or have run for president.

[lazarus]

Yes, bonuses were given across the board. I didn't say they were not. My point was that most of the employees of the banks that received bonuses did not work in the home mortgage divisions.

Well, you actually said the "overwhelming majority". Roughly 50% of the bonuses went to the same division that cause the problem. The tax payer paid for the losses not those responsible. There has been little or no accountability.

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But even those in the home mortgage divisions need to be retained and thus compensated. How are we going to get out of this mess? Don't we need skilled bankers in mortgage divisions to help us get out? If so, we need to pay them.

Skilled bankers?, Some would question their skill and their ethics. We need bankers who will be ethically responsible. Financial institutions need to get the message that they will be held responsible for criminal activity.

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It is class envy and covetousness that makes one want to take away the bonus of another. That is not only wrong, it is shamefully wrong. I am a Commandment-keeping Christian and that includes the 10th Commandment. How can I call myself a Seventh-day Adventist and complain about a banker getting a bonus?

I think you are being over the top here. By implication you are questioning my Christianity and Adventistim. That's excessive and a bit weird.

These folk have bankrupted their companies. There was fraud and incompetence. Some have suggested that criminal charges should be bought.

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Banks do what the government allows them to get away with.

In many instances that is true

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The government must regulate them. This financial crisis is the government's fault - both parties. Most of the blame is on Congress as the President did try to do something.

If you read about the nature of this crisis you will see that many financial institutions systematically, deliberately, and effectively worked to skirt regulations. They broke the law. They deceived that rating agencies. Here's a few books perhaps will give you a different perspective.

The Big Short: Michael Lewis

On the Brink: Hank Paulsen

The Ascent of Money: Niall Ferguson

[lazarus]

The banker was not interested in bad loans in the least.

Yes, he is. If he can make money on that loan he will definitely be interested. Many people don't understand that point so they don't understand the nature of this crisis.

[Dr. Shane]

Financial institutions need to get the message that they will be held responsible for criminal activity.

[bonnie]

Originally Posted By: bonnie

The banker was not interested in bad loans in the least.

Yes, he is. If he can make money on that loan he will definitely be interested. Many people don't understand that point so they don't understand the nature of this crisis.

You left a little out of the above.This is what I said....

Before the big push for all to own a home the banker made blame

sure there was a better than reasonable chance it would be repaid.The banker was not interested in bad loans in the least.

Our second home we obtained our first FHA loan in 1967.To qualify we needed proof of employment,excellent credit,20% down and to prove where the down payment had come from. If it was borrowed money you did not qualify. We were not ENTITLED to anything.

For the next 11 homes the requirements were pretty much the same.The banks/mortgage companies wanted the money.You were only entitled to what you could qualify/pay for.

Once the rules changed we headed for trouble,it just took a few years to get to the housing crisis

[lazarus]

What they did wasn't illegal. That is the problem. It should have been.

Morgage fraud is not legal.

Originally Posted By: lazarus

By implication you are questioning my Christianity and Adventistim.

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No. I think you are taking a comment too personally. What I am implying is that people, including you, are too quick to jump on a someone else's bandwagon without thinking out all the the implications it carries.

Lol, you just, in the last paragraph, contradicted yourself. You were talking about me.

You haven't been talking about implications you have really been saying it's a waste of time. Time should would be spend more wisely elsewhere etc. You've been touting your wise use of time for the sake of the gospel and how what you do has eternal consequences. Congratulations on that.

Originally Posted By: lazarus

They did what they were allowed to do. Congress is the bad guy. I don't blame cats for eating meat left out on the counter. That is what they do. Leave meat out and the cat will eat it. The solution is to put the meat in the refrigerator.

They were not allowed by congress to comit mortgage fraud. Congress did not permit the deception of the ratings agencies.

I'm not sure why you are not aware or unwilling to admit that mortgage fraud was a significant part of the crisis.

[Dr. Shane]

Lol, you just, in the last paragraph, contradicted yourself. You were talking about me.

My comments are made in general, although it does seem to me you are willing to jump on a band wagon without giving too much thought to it. Perhaps I am wrong headed on that evaluation. I think that today with all our different types of media, way too many people are just jumping on ideological band wagons without thinking them all the way through. A fine example is the other thread where conservatives are criticizing Obama for killing Osama. Had Bush killed Osama in the same way the very same conservatives would be defending him and liberals would be attacking him. There are just a lot of people that are willing to jump on band wagons. Some have characterized it as a mob mentality and it seems to be increasing as the political landscape becomes more polarized.

We are ministers of the gospel. Shall we get sucked into these political movements as they sweep the nations? I am not saying all political movements are bad. They are not. The move to ban slavery was a long time in coming - as was the civil rights movements. These things took generations. The fight against abortion is also a cause that is going to take generations. God does call some of His followers to get involved in these noble causes. However I don't believe that it is His highest calling. I believe bringing the saving message of Christ's grace to the lost sinner is the highest calling and that politics distracts many Christians from fulfilling that purpose.