lawd A guy like Fabrice Tourre can make 1.6 million a year cobbling together synthetic products designed to fail at great systematic cost, and the problem is the median salary of, of all people, Freddie and Fannie employees? If more people had stuck to Freddie and Frannie underwriting standards, America wouldn't be in the mess it is in now. If you have a problem with finance salaries in general, I can respect that, but to nitpick at Freddie and Frannie, of all places, is a bit laughable. private salary-public salary differentials in finance are ridiculous, and if there's a narrowing, good. The private side did all it could to sink the nation anyways. ex: Average Pay at Goldman Sachs: $367,057 (that's not directors only, that includes the expensively priced mail boys and that's after the whole system took a dump and "narrowed the gap".) Guess who America should have listened to. The Mortgage Crisis: Some Inside Views Emails show that risk managers at Freddie Mac warned about lower underwriting standards—in vain, and with lessons for today. http://online.wsj.com/article/SB10001424053111903927204576574433454435452.html Hell, those Fannie and Freddie risk managers deserve a massive raise, even if their bosses don't.
This should be my signature. It only has cost $400 for every American over $100 billion dollars in losses and you think their risk managers deserve a raise. Goldman borrowed money short-term in the crisis and paid it back with interest so its their shareholders that should be worried about compensation there. When its taxpayer money, that is when i'm very concerned.
So you don't think they should use traditional means of letting the market determine wages like benchmarking etc, but a gov't wage scale is also off the table as its not really pay for performance. I'm sort of at a loss in terms of what you are actually proposing - apparently you are the only one who knows what the appropriate recompense is; ergo we have more or less come full circle, and I ask, again, how much should they be paid then?
If you want to make it your signature, append the following cited article to it (I had attached it to my previous quote, but you seem to have missed it). http://online.wsj.com/article/SB10001424053111903927204576574433454435452.html Thank you!
Goldman et al. caused the failure of AIG, and created systematic risk that cost taxpayers trillions through credit conditions that ultimately led to the need for the stimulus, auto bailouts, and the largest private market failure in history. If you're so concerned with taxpayer money, you shouldn't be focusing on the pennies and nickels saved from knocking on Fannie and Freddie, and instead focus on the dollars and bills that can be saved from averting another 2008-like meltdown.
Can we get a refund on the transfer payments that went from taxpayers to AIG to Goldman Sachs and friends? Miracle on Wall St. <iframe width="560" height="315" src="http://www.youtube.com/embed/zsbH4W4vxfs" frameborder="0" allowfullscreen></iframe>
They have to manage a lending portfolio twenty times the size of any individual for-profit bank, with none of their flexibility in terms of lending discretion: ie, any one who qualifies probably gets the loan irrespective of profitability to the firm. There's probably a lot of high-level portfolio hedging and fund management done by people whose skills would be worth millions in the financial, insurance or commodity sectors.
In a government subsidiary I just fear as anything government, there there is little accountability and hope that it is scrutinized as the company lost huge amounts of tax payer money and i'm wrong for thinking their wages should be scrutinized?? There are no shareholders (not that they do much of it) to question salaries and compensation etc. Why is it so wrong to scrutinize the biggest loser in this debacle that cost every American hundreds of dollars?!
Already done, with a net profit for taxpayers. Both AIG and GS have paid back all of the money provided to them with interest.
A lot of these issues about flexibility is based on government mandates on the GSE's by HUD etc. and that they were used as a policical tool by both sides of the isle. Then their mandates of special affordables continued until half their portfolio was sub-prime. Government mandates of special affordables killed these firms, though they enjoyed borrowing rates because of the government percieved backing for decades. Its ironic that industries as highly regulated and government controlled like mortgage and banking etc were at the epicenter of the crisis.
Fannie and Freddie have been and continue to be publicly traded, just on OTC exchanges rather than the NYSE. http://www.marketwatch.com/investing/stock/fmcc Fun fact---Revenue per employee---$18.48M It's wrong to call what you're doing scrutinizing anything if you haven't taken the time to keep track of the most important details. The proper term would be skimming through the material. I believe this is the second time you've been called out on something in this thread.
Can they pay for the differential between tax revenue shortfalls and governmental expense rises between 2008 and now? Can anyone?
While it is very high, I always have one small quibble... Why on earth is it somebody's business if somebody else is earning 'too much' money? It's up to the board to see how executives should be paid, not hte government or the common man.
What part of "publicly traded company" do you not understand? FNMA is traded OTC....if you feel this is a problem, please go out tomorrow and buy shares - they are quite cheap, so I'm sure you can stake out a large position. Is there anything you are able to not be wrong about in this thread? And why are you too much of a turdclown to even finish your original thought? We're a day in, and after a 24 hours you have yet to respond to the basic question that you begged yourself - Why do you think salaries there are too high/what should they be instead?
rocketman81 has made a pretty compelling case for, and I agree with, the need for tighter regulation and broader oversight over this industry.
Amazing the profits you can make when all your loans are backed by the taxpayer. No surer sign of reinflating the housing bubble than Fannie/Freddie booming again.
Why don't you explain this thesis of yours in empirical terms? I'd like to hear why you believe this to be so. Thanks!
They would make "big bucks" at whatever money center bank, insurance or re-insurance firm or F-500 corporate finance/treasury department they would otherwise be employed at. People just reflexively assume government workers are less valuable; I don't know what the demographics are but I suspect it's a similar reason we can't imagine paying teachers competitively (because historically they were mostly women).
