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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: KLP who wrote (271897)	10/2/2008 12:09:22 PM
From: Alan Smithee	Read Replies (1) \| Respond to of 794033

WaMu CEO Fishman won't accept any severance pay By Melissa Allison Seattle Times business reporter Alan Fishman, named CEO of Washington Mutual just 18 days before federal regulators seized it, will not accept a multimillion-dollar severance payment even if he is entitled to it, a spokesman representing him said Wednesday. "It is doubtful that Mr. Fishman would be entitled to severance payments under his contract because of FDIC regulations, but in any event, he would not accept severance under these circumstances," the spokesman said Wednesday in an interview. He would not comment on whether Fishman would keep a $7.5 million signing bonus or whether he is still employed at WaMu. Fishman's employment contract made him eligible for $11.6 million in cash severance, according to James F. Reda & Associates, a compensation-consulting firm in New York.

To: KLP who wrote (271897)	10/2/2008 12:36:53 PM
From: Hawkmoon	3 Recommendations Read Replies (1) \| Respond to of 794033

Yeah.. completely disagree with him.. You see.. Back in 2007, FASB 157 was implemented and Mortgage Backed Securities had to be accounted for under M2M rules. This had NOT been the case previously.. And guess how closely that corresponds with the decline in those MBS assets, the overall progression of downgrades, as well as the manipulation of Credit Default Swaps to make it appear those asset backed securities were more risky than they actually were. Yep... 2007 was the paradigm shift in Real Estate accounting for those mortgage backed credit pools (also known as CDOs, MBS, etc.).. And now, with the SEC telling banks they suddenly don't have to value their ABS' at "fire-sale" valuations, their balance sheets have suddenly returned to a measure of the former status. Y'know.. I can see marking non-collateralized debt (credit cards.. etc) in a M2M manner. If people stop making their payments, then the asset is obviously impaired. But when it comes to MBS', those mortgage loans are all backed by actual real property, and unless we're suddenly in a situation where we have a massive population contraction, I can't see where those property values are going to decrease more than 30-50%. So why are those MBS's being marked down to .20-.30 on the dollar? As an example, I've got some Ambac (ABK) which has been forced by M2M accounting rules to mark some of those assets down by 100% (complete write off) and required to set aside reserves to cover their insurance exposure. The Ratings Agencies have had Ambac's CEO in front of their credit rating review board 6 times since December. Their CEO, Mike Callen, compares them to "monks in robes" (a direct comparison to an religious inquisition board) deciding your fate. And he says their models are completely screwed up. bloomberg.com bloomberg.com seekingalpha.com But these are the same people who told you that all of those MBS's that had a small percentage of sub-prime exposure were "AAA" and those insurance companies wrote their policies based upon those analytical models offered by Moodys and S&P. In sum.. M2M has drastically harmed the Real Estate sector by expecting them to be valued in the same manner as non-collateralized and more liquid markets. And for god's sake, none of us get to use M2M accounting when it comes to property tax assessments when our neighbor's house is foreclosed and sold in a "fire sale". Hawk