For Ousted Citigroup Chief, a Bonus of $12.5 Million: This is from The New York Times;
This year, thousands of Citigroup employees can expect bonuses based on their work in 2007, when the bank’s results have been less than stellar. One, however, will get a bonus based largely on his performance in 2006, which was a better year: Charles O. Prince III, who resigned under pressure as chairman and chief executive last week.
Mr. Prince, arguably the person most responsible for Citigroup’s enormous problems, can expect at least a $12.5 million cash bonus, compared with last year’s cash payout of $13.8 million.
And as he awaits his official retirement next month, Mr. Prince can rest assured that he will leave with $68 million, including his salary and accumulated stockholdings; a $1.7 million pension; an office, car and driver for up to five years — all in addition to the bonus. That is on top of $53.1 million he has taken home in the last four years, a period when $64 billion in the company’s market value has evaporated.
His $12.5 million bonus is based on a formula that adjusts the 2006 bonus for current stock performance, instead of simply awarding it on his performance during 2007, as with most everyone else. Pay experts say the unusual time-traveling maneuver effectively guarantees him a windfall.
Mr. Prince’s payout raises questions about Citigroup’s compensation philosophy at a time when Wall Street bankers are anxious about smaller bonuses and the current credit crisis. It also raises new questions for Citigroup’s board, which for years handed Mr. Prince lavish paychecks that encouraged risk-taking — and is now handing him extra money despite the billions in losses on his watch.
So Citygroup CEO Charles Prince get a $12.5 million bonus, even as Citygroup writes down $6 to $10 billion in losses due to the subprime mortgage scandal. Talk about rewarding failure and incompetence here!
'Boston Globe' Web Site Calculates Other Uses For $611 Billion Spent on Iraq: The Boston Globe has taken a unique view of what the American taxpayers could have alternately spent the $611 billion that this Bush administration has wasted in the war in Iraq. Editor and Publisher has a review of the Boston Globe's findings;
• "U.S. drivers consume approximately 384.7 million gallons of gasoline a day. Retail prices averaged $3.00 a gallon in early November. Breaking it down, $611 billion could buy gasoline for everybody in the United States, for about 530 days."
• "In fiscal 2008, Medicare benefits will total $454 billion, according to a Heritage Foundation summary. The $611 billion in war costs is 17 times the amount vetoed by the president for a $35 billion health."
• "According to World Bank estimates, $54 billion a year would eliminate starvation and malnutrition globally by 2015, while $30 billion would provide a year of primary education for every child on earth. At the upper range of those estimates, the $611 billion cost of the war could have fed and educated the world's poor for seven years."
• "At almost $15 billion, Boston's Central Artery project has been held up as the nation's most expensive public works project. Now multiply that by 40 and you're getting close to US taxpayers’ commitment to democracy in Iraq – so far."
• "At published rates for this year, $611 billion translates into almost 14 million free rides for a year at Harvard University. Tuition and fees at the University of Massachusetts-Boston could be paid for over 53 million years."
Unfortunately, the incompetence of this Bush administration has wasted this money in this useless and lost war. You have to wonder just how much better this country would have been if we didn't have this incompetent idiot as a president.
Recession hinges on coping with credit crisis: This is an interesting MSNBC News story;
No, it's not just you — the U.S. economy really is bewildering. The government says gross domestic product expanded at an annual rate of nearly 4 percent in the third quarter, the fastest pace in a year and a half. The stock market is still up by 4 percent for this year, despite a sharp 3 percent drop on Nov. 7. On the other hand, growth in consumer borrowing slowed unexpectedly in September. Some economists argue that the U.S. is teetering on the brink of a recession, if it isn't in one already.
Oil has exploded to nearly $100 a barrel, gold is near an all-time high, and the cost of food is soaring. It seems like high prices are breaking out all over, right? Yet the core rate of inflation is less than 2 percent a year, according to one widely followed measure. Confusion reigns right on up to the Federal Reserve, whose interest ratesetters are openly disagreeing about whether more cuts are needed.
Step back a little, though, and the situation becomes clearer. What we're observing, in all its bizarreness, is the ancient paradox of what happens when an irresistible force meets an immovable object. The irresistible force in this case is the U.S. economy, which has managed to expand through all kinds of adversity for more than 15 years, aside from one brief recession in 2001. The immovable object is a wall of debt that accumulated during several years of profligate lending and now can't be paid back. The risk has increased for a generalized credit crunch that puts both borrowers and lenders in dire straits.
So, either the U.S. economy will overcome the debt crisis and keep growing, or it won't. It's that simple — and that important, with millions of indebted homeowners struggling to stay above water, the stock market seesawing uncertainly, and just a year to go before the next President is elected.
This story is rather interesting since it shows the signposts which will determine whether the U.S. has entered a recession due to the mortgage mess. These signposts will be what happens in the housing market, the job market, default rates on homeowners, interest rate spreads on securities, and consumer spending. There are a lot of economic numbers to watch for here.
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