3 CEOs Made $460 million On Subprime Scheme

These crooks laughed all the way to the bank while families were being turned into the streets.

Three chief executives with ties to the mortgage crisis were paid $460 million over five years, according to a congressional report issued Thursday.

On Friday, the House Committee on Oversight and Government Reform is set to examine CEO pay in light of huge losses in the financial sector stemming from the mortgage crisis.

The panel, chaired by Rep. Henry Waxman, D-Calif., will hear testimony from Charles Prince, former CEO of Citigroup Inc.; Stanley O'Neal, former CEO of Merrill Lynch & Co.; and Angelo Mozilo., chief executive of Countrywide Financial Corp., the nation's largest mortgage lender.

The committee asked each company for internal documents about executive pay. Committee staffers reviewed company email, board minutes and federal regulatory filings, according to the 23-page memo made public Thursday.

The memo states that the three companies combined lost more than $20 billion in the last two quarters of 2007, as investments related to subprime mortgages fell apart. Meanwhile, the stock of Citigroup, Merrill Lynch and Countrywide declined drastically.

"The hearing provides a lens through which to examine whether the executive compensation and severance arrangements at these companies provided appropriate incentives to protect shareholders from these losses," the committee said.

The committee is also expected to look at how the compensation and severance packages of Mozilo, O'Neal and Prince were set and approved by their respective boards.

"In many cases, the consultants hired to advise on executive pay were simultaneously receiving millions of dollars from the corporate executives whose compensation they were supposed to assess," according to the memo.

Also scheduled to testify are Richard Parsons, chair of Citigroup's compensation committee and former CEO of Time Warner, the parent company of CNNMoney.com. The chairmen of the Countrywide and Merrill Lynch compensation committees are also set to address the committee.

Calls to Merrill Lynch and Countrywide were not immediately returned. A Citigroup spokesman declined to comment.

Damon Silvers, associate general counsel of the AFL-CIO, which is often critical of executive compensation, believes the hearing will have an important symbolic impact.

"We hope it will put pressure on folks to give some money back and send a signal to other execs that they can't get away with these perverse incentives," Silvers said.

Until the laws are changed and people are held accountable for their actions nothing will ever change. Who really thought it was a good idea to lend money to people who could not afford it and then bundle those bad loans into securities sold all over the world? It was the same executives that made millions while putting the US and other world economies on the verge of a worldwide recession.

Many argue that it was the deregulation of the banking industry that was the impetus for what is happening now. I could not agree more. Banks and brokerage houses should not be tied together. Our financial security is too important to allow this type of rogue investing. These CEO's rolled the dice and the American taxpayer lost. There should be an immediate call for the return of these ill gotten gains or a class action lawsuit that would cost them more in fees then they ever earned.

Company With Ties To Daddy Bush Defaults on Margin Calls

The Bush family has failed Savings and Loans under their belt, they have risen our national debt to astounding numbers and now a company with strong ties to Daddy Bush is defaulting on margin calls.

What a surprise that the first family has ties to bad business.

A bond fund managed by private equity firm Carlyle Group, revealed on Thursday that it has received a note of default after failing to meet several payment demands.

Shares of Carlyle Capital Corp. Ltd. plummeted more than 50% on the news that it had missed four out of seven margin calls totaling around $37 million on Wednesday. A margin call is a payment to guarantee a much larger debt or investment.

Carlyle Capital said one creditor has issued a default notice and it expects to receive a second such notice, adding to market worries about forced liquidations of residential mortgage-backed securities.

Carlyle Capital's difficulties will have "no material impact on the Carlyle Group or its funds," Christopher Ullman, a spokesman for Washington-based Carlyle Group, said. Carlyle Group, one of the world's largest private-equity firms with $76 billion under management, manages 55 funds in 21 countries.

As of last month, Carlyle Capital had a $21.7 billion investment portfolio of AAA-rated floating-rate capped U.S. mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

Yields on some of those securities have plunged to their lowest levels in two decades after credit markets dried up.

Carlyle Capital Chief Executive John Stomber attempted to play down the situation, saying the past few days had created a market environment that did not fairly value the fund's assets.

"Unfortunately, this disconnect has created instability and variability in our repo financing arrangements," Stomber said in a statement. "Management is actively working with the company's repo counter-parties to develop more stable financing terms."

But the stock, which listed on the Euronext Amsterdam in July, dropped 58% to $5, giving the company a market capitalization of $255.4 million.

The fund originally sold shares at $19 each.

The company said that seven banks that help finance its portfolio of Freddie Mac and Fannie Mae securities through short-term repurchase agreements, known as repos, had asked for an additional $37 million on Wednesday to keep funding in place.

It met the requirements of three of those, who it said had indicated "a willingness to work with the company during these tumultuous times."

It gave no detail on the banks in question or which one had issued the default notice.

Carlyle Capital as recently as Monday had reassured investors on its funding lines, saying it had $2.4 billion in undrawn repo lines and that it had increased a credit facility provided by the parent by 50%, to $150 million.

Do you think the ties to the Bush family will get media attention? I doubt it.

Iraq Rebuilding Projects are Crumbling

In a sign of more tax dollars being wasted in Iraq it is now certain that rebuilding projects called successful are now crumbling.

In a troubling sign for the American-financed rebuilding program in Iraq, inspectors for a federal oversight agency have found that in a sampling of eight projects that the United States had declared successes, seven were no longer operating as designed because of plumbing and electrical failures, lack of proper maintenance, apparent looting and expensive equipment that lay idle.

The United States has previously admitted, sometimes under pressure from federal inspectors, that some of its reconstruction projects have been abandoned, delayed or poorly constructed. But this is the first time inspectors have found that projects officially declared a success — in some cases, as little as six months before the latest inspections — were no longer working properly.

The inspections ranged geographically from northern to southern Iraq and covered projects as varied as a maternity hospital, barracks for an Iraqi special forces unit and a power station for Baghdad International Airport.

At the airport, crucially important for the functioning of the country, inspectors found that while $11.8 million had been spent on new electrical generators, $8.6 million worth were no longer functioning.

How can we hope to stop an insurgency when the Iraqi people can not see any progress? All they see is waste and fraud and a country still crumbling. There is still less clean water and electricity than before the invasion. Everyday life for the normal Iraqi is nearly unlivable. Until real progress is achieved no amount of troops or tax money will solve this problem. When will the American people realize that so much of the two billion dollars we spend a week in Iraq is wasted and when will they say enough is enough?