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It's a hard hard life being Richard "Richie Rich"Syron, CEO of Freddie Mac since 2003. Seems having to create profits for investors AND serve the public by boosting the housing market has just been ripping him apart.
Truly, I feel for him. Truly. The day before I had to announce another 1.3 billion in losses I too would be looking for excuses. I too would be ripped apart by the uncertainty of whether or not to make myself filthy rich by engaging in risky behavior so I could drive up stock prices and thus justify multi-million dollar bonuses, or whether I should be prudent and pass on on some of that filthy lucre. It's a hard choice, and I'm sure it's just coincidence that Syron decided to engage in stupid and risky behaviour, that happened to drive up his stock bonuses. (I do however believe him when he said he thinks it impossible for him, since there's no evidence he so much as tried.)
And hey, when your company is going south, the books are looking bad, when your company looks like it's heading for bankruptcy, I agree with Richie Rich—the best thing to do is spend a billion dollars buying back shares. It's not like you might need that billion dollars for something else.
But in truth, Richie's right. Clearly modern executives are not capable of doing the right thing if there are financial incentives to do the wrong thing. So I think we should take Richie's implicit advice and just nationalize Freddie and Fannie and drop the CEO's salary to what bureaucrats in the public service get at the same level. That'll be the end of the "competing objectives" and that'll be the end of CEOs who stand to lose millions if they do the right thing.
As for Richie Rich, well, he's rich. That's how the modern CEO job works. You burn down the house to generate heat, take your profits "it's a hot company, baby!" and once everyone realizes they're homeless, well, whatever, you're still rich, and they're suckers.
And just like Richie Rich and the American taxpayer, you never, ever, give a sucker an even break.
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zed
Digg it for Ian when you get here!
And that distant thunder? Could it be the alt-a loans coming due for an adjustment,I read that this will be much bigger in dollars than sub-prime warm-up.
Now why would Syron stray from the norm of multi-million dollar bonuses for pile-driving an institution into the ground, Ian…? C’mon, he needs to make a living somehow…!
We need to arrest and seize the assets of a few of these muthafuckin’ thieves.
Poor baby. He might have to cut back on the cases of minl-linrd Charmin he orders this quarter and that’s gonna rub the wrong way.
Sounds like Syron’s going for his own variation of “No one could have anticipated . . .”
Hey. How come I couldn’t get on this site? the symbol in my address bar changed to a trident with one tang pointing down. Weird, huh? I had to try 4x.
Freddie MacDaddy
Funny, there’s almost more diggs than comments…!
But just you remember that paying those working poor folk a minimum wage of of $5.75 will cause the collapse of the economy!
It’s a hard job. Thank gawd we have modern CEOs.
dunno…been looking at too much pr0ng tang? :~)
Ding!
Speaking of digg… FF released a new digg add on…
Don’t forget the inherent unfairness of the Estate Tax:
the nations only hope of recovering the plunder of this generation.
Heh, don’t ya mean the Walton’s Death tax…? ;-)
Things would be much worse for ‘Richie’ if he didn’t have an uncle Sugar … who is very generous and forgiving, for some of his nev-yuhz …
Great post, Ian.
It’s definitely a ‘Mac’ world.
Especially if the Mc$ame obtains …
What? Are you questioning that there should be large rewards for rapacious behavior? What kind of a capitalist are you, anyway? Obviously, the only master to obey is the one who pays best.
/S
Bob in HI
Shareholders paid this guy millions to ruin the investments of thousands of people who held Freddie Mac in their retirement plans. Now taxpayers have to put that money back, with a whole lot more. He doesn’t have to pay taxes either. The republicans cut the tax rates for toads like him and the democrats went along. Now the best the dems and our presumptive nominee can do is suggest we might return the tax rates to the level of the Clinton era.
Our government is led by financial buffoons, and the presumptive repub admits he’s one.
Hey McBush will need a Treasury Secretary so why not Richard “Richie Rich” Syron? No doubt they are on the same wave length.
g’evening pups
Truly, I feel for him. Truly. The day before I had to announce another 1.3 billion in losses I too would be looking for excuses. I too would be ripped apart by the uncertainty of whether or not to make myself filthy rich by engaging in risky behavior so I could drive up stock prices and thus justify multi-million dollar bonuses, or whether I should be prudent and pass on on some of that filthy lucre. It’s a hard choice, and I’m sure it’s just coincidence that Syron decided to engage in stupid and risky behaviour, that happened to drive up his stock bonuses.
Option 1
I would be blaming the people who were incharge before who created the mess and left me to deal with it.
Opition 2
Unless I was in on it and DUMB enough to stick around holding the bag when everything blew up.
Since Option 2 seems more likely we really need to fire this guy anyone dumb enough to be a patsy should not be running a company.
I wonder just what line they fed him to convince him to hold the bag?
1)The Cops have nothing so keep quiet and nobody goes to jail.
2)Don’t worry the Government will bail you out andLET YOU KEEP YOUR BONUS/SHUT THE F UP MONEY
3) It would be a real shame if your wife saw the pictures?
Hey Suz!
Dugg:)
ian, thanks for the post. dayam richie rich’s are wanting the taxpayer to pay for their forkups - a side benefit of wingnut welfare
hey newton
evening Suz (:>) Hows the pod doing??
hey nahant… the pod is filling much faster than i like
tomorrow is the big day for finishing - except for the stuff i pick up from the storage in castro valley sat.
Dugg
Aloha, Suz!
aloha, ct. how’s paradise tonight?
Ct how is the new job going??
Hah! The zed is gone! Gone gone gone! But Teddy’s upstairs.
Evening all. More reasons I am a socialist. If I had my way this kind of thing, being an obvious conflict of interest, would be illegal. Of course CEOs could not be paid more than 40 times the wage of the lowest paid employee either.
teddy is upstairs
It’s too depressing when there’s nothing to do but shrug. Why didn’t we nationalize this company when it got into so much trouble that we had to bail it out? Why are the profits privatized and the losses socialized? Where is the money coming from to pay him $19 million in salary and stock options and millions more given as campaign contributions (to keep regulators away)?
Too many questions and not enough answers — at least not the ones I want to hear. He (and they, Bear, Indy Mac, Fannie) were irresponsible and now we (taxpayers, mostly the middle class thanks to welfare from Bush to the super-rich) have to pay. Will they at least fire him?
Syron and Bush must have taken the same business courses -
The chief executive of the mortgage giant Freddie Mac rejected internal warnings that could have protected the company from some of the financial crises now engulfing it, according to more than two dozen current and former high-ranking executives and others.
That chief executive, Richard F. Syron, in 2004 received a memo from Freddie Mac’s chief risk officer warning him that the firm was financing questionable loans that threatened its financial health.
Thanks Ian.
This is just sickening.
Thanks very much nahant for the digg link. I used it.