Tag: Corporate Greed

The Bank Of American Express

Everybody is looking to save their collective butts with hand outs from the government.

American Express (AXP 23.98) is now licensed as a bank holding company and will be regulated by the Federal Reserve.  The company grew into its own by issuing credit cards to well-heeled customers, but strains in the economy and broader financial system led to write-downs and increased loss provisions.

Status as a bank holding company does not mean American Express will change its focus away from the payments industry.

Operating as a bank holding company provides American Express stability and flexibility in the current environment, while expanding its deposit-taking capabilities — a relatively inexpensive source of funds.  The newly granted status also enables American Express to issue debt backed by government guarantee.  Additionally, American Express now has access to Treasury’s Troubled Asset Relief Program (TARP), which will allow the company to put up dodgy assets in exchange for fresh capital.

Access to such resources helps solidify the firm’s balance sheet and mitigate against losses.  For the third quarter, American Express reported increased net loan write-offs, increased loss provisions, and intentions to restrain loan growth.

People, please wake up!

American Express Wants Money

AS reported in the WSJ.  AmEx is trrying to get some of that bailout pie.

American Express Co. which is being hit by slowing consumer spending and rising defaults, is seeking roughly $3.5 billion in taxpayer-funded capital from the federal government, according to people familiar with the situation.

The card issuer is the latest company not directly hit by the housing crisis to request cash from the federal government. While retailers, car companies and others hit by the slowdown in consumer spending haven’t gotten the government money, financial firms of all kinds are getting federal bailouts.

It isn’t clear if the application under the Troubled Asset Relief Program came before or after the credit- and charge-card giant got Federal Reserve approval Monday to become a bank-holding company.

So far, 52 financial institutions have received preliminary or final approval for about $172 billion of the $250 billion available under the capital-infusion program, according to Keefe, Bruyette & Woods, a New York firm that specializes in the financial-services industry. Another 23 companies have submitted applications for an additional $4.6 billion.

Please…what is next?  The Bank of Home Depot?  National Bank of Applebees.  The greed is getting massive, they are all scrambling trying to find ways to get the taxpayers money.  I mean it is a great deal……

AIG–A Steaming Pile Of Crap!

Even as the company was pleading the federal government for another $40 billion dollars in loans, AIG sent top executives to a secret gathering at a luxury resort in Phoenix last week.

Reporters for abc15.com (KNXV) caught the AIG executives on hidden cameras poolside and leaving the spa at the Pointe Hilton Squaw Peak Resort, despite apparent efforts by the company to disguise its involvement.

“AIG made significant efforts to disguise the conference, making sure there were no AIG logos or signs anywhere on the property,” KNXV reported.

A hotel employee told KNXV reporter Josh Bernstein, “We can’t even say the word [AIG].”

A company spokesperson, Nick Ashooh, confirmed AIG instructed the hotel to make sure there were no AIG signs or mention of the company by staff.

“We’re trying to avoid confrontation, keep our profile low,” said Ashooh. “Some of our employees have been harassed.”

“What do they have to hide,” asked Congressman Elijah Cummings (D-MD) who said he had been promised by AIG CEO Edward Liddy that the company would stop such “junkets.”

“They came to us and said they were drowning and needed help. A person who is drowning doesn’t jump up and start partying,” said Congressman Cummings.

Eventually the American people will wake up and demand that these sons-a-bitches just craswl in their hole and die.  Their money is being pissed away while they scratch to find mortgage money.  I realize that everyone is trying to convince me that the saving of a/holes like AIG is for the good of the country, but it is stabbing the people in the back.

Economy Just Sucks!

More and more corporations are failing and where is the bailout money?  People are lossing their jobs and families are losing their homes and children go to bed huingry–where is the help that the $700 billion was suppose to provide.

This is our economy and quite possibly its future.

— Facing pressure from vendors and consumers who aren’t spending, Circuit City Stores Inc. filed for bankruptcy protection Monday as it heads into the busy holiday season with hopes that the move will help it survive.

Under Chapter 11 protection, the nation’s second-biggest electronics retailer can keep operating while it develops a reorganization plan. Its Canadian operations also filed for similar protection.

The company also said it cut 700 more jobs at its Richmond, Va., headquarters, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.

Package delivery company DHL may have conquered the world, but it admitted on Nov. 10 that it couldn’t conquer the U.S. The unit of Germany’s Deutsche Post announced it will stop making express deliveries within the U.S., close all of its 18 main distribution hubs there, and lay off all but a few thousand of its remaining 13,000 U.S. workers.

General Motors shares plunged more than 30 percent Monday after an analyst forecast their price would fall to zero, saying that even if there is a government bailout of the auto giant, shareholders would not benefit

“We are lowering our target on GM equity to zero dollars,” the Deutsche Bank report said.

“Even if GM succeeds in averting a bankruptcy, we believe that the company’s future path is likely to be bankruptcy-like,” it said.

I keep asking and never get an answer–where is the bailout of Main Street?  The US is spending plkenty of taxpayer money only to prop up corporations and job loss is growing, foreslosures are growing, nothing is helping “Main Street”.

The Party Has Just Begun

Just days after the federal government committed $85 billion of taxpayers’ money to a bailout of insurance giant AIG last month, senior execs from the troubled company headed to Southern California’s ultra-swanky St. Regis Resort in Monarch Beach for a week of wining and dining top salespeople.

As it happens, congressional investigators released AIG documents earlier in the day showing that the company paid more than $440,000 for the event, including nearly $200,000 for rooms, $150,000 for meals, $23,000 in spa charges and almost $7,000 for golf outings.
The post-bailout getaway for American International Group execs is just one of a series of jaw-dropping revelations to emerge this week about the behavior of some of the companies involved in the financial crisis.

Among other things we now know:

* AIG tried to hide negative information about its condition from auditors before the bailout plan took shape, according to documents obtained by Rep. Henry Waxman (D-Beverly Hills), who heads the House Oversight and Government Reform Committee.

* As early as March, regulators sent a letter to AIG warning the company about its lack of transparency and ability to oversee financial products.

* Just days before Lehman Bros. Holding Inc. filed for bankruptcy protection last month, the company altered its executive pay plan to give senior managers multimillion-dollar bonuses regardless of recent losses.

* Joseph Cassano, the Lehman exec in charge of the company’s financial products division, received more than $280 million over the last eight years, according to Waxman. Even after he was shown the door in February, Cassano was placed on a $1 million-a-month consulting retainer.

The money the taxpayers are asked to give is being well spent (sarcasm intended)

The Race Is On

The announcement of a virtually open-ended government bailout of Wall Street has set off a frenzied competition among the biggest banks and financial firms to grab the lion’s share of the super profits to be reaped from the program.

Banks, brokerage houses, insurance firms, mortgage lenders, private equity companies and asset managers are furiously lobbying the Bush administration and Congress to make sure that the legislation authorizing the bailout gives them the biggest possible share in the spoils. Behind the public speech-making and posturing by administration officials, presidential candidates and congressmen, a sordid campaign of influence-peddling and vote-buying is under way, which will determine the details of the bailout law that is expected to be passed either this week or next.

Tens of billions of dollars in corporate profits and billions more in personal windfalls for senior executives and big investors are at stake. The plan drawn up by Treasury Secretary Henry Paulson not only allows the biggest financial firms to rid themselves of virtually worthless assets that are driving down their stock and slashing their profits, it provides vast opportunities for the winners in the money race to realize huge gains from the management of the program and the ultimate resale of the assets by the government.

FBI Enters Into The Crisis Picture

Federal investigators have opened preliminary probes into the financial troubles of four high-profile companies that are at the center of the current financial turmoil that the Bush administration says requires an unprecedented proposed taxpayer-funded bailout to clean up.

The Federal Bureau of Investigation’s preliminary inquiries are focusing on whether fraud helped cause some of the troubles at Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc. and American International Group Inc., according to senior law-enforcement officials.

Pressure is building for the FBI and regulators to hold top executives accountable for the crisis that has crippled the nation’s finance sector. In meetings on Capitol Hill, some lawmakers raised concerns with Treasury Secretary Henry Paulson that by taking large stakes in some financial firms, the government may be limiting its ability to exact penalties for wrongdoing, according to people familiar with the matter.

The FBI says that the corporate probes are part of an effort to pursue allegations of higher-level fraud more sweeping than the retail-level infractions that have been at the center of most cases brought so far.

During the Savings and Loan bailout 20 years ago, federal prosecutors brought more than 600 cases against 1,000 defendants. But the complicated securities at the heart of today’s crisis make comparable prosecutions more difficult, investigators say.

Maybe we will be that lucky again and make the people who caused this to be held responsible…NOPE…I would only be dreaming.