Richard Fuld Lehman CEO Testifies to Congress
Watching CNBC today as the market tanks the Lehman CEO Richard Fuld is testifying about his compensation. Seems he got about 500 Million dollars from Lehman since 2000. This is a huge amount of money and it seems that Congress is pretty mad about this. I can’t imagine anyone being worth this amount of money for doing any job. I think CEO’s should be paid well as they have a lot of responsibility, but at these levels I just don’t understand it. Especially in a case like Lehman Brothers who has went bankrupt and cost millions of stock holders their savings.
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Economy Hits Archway Cookies
Archway cookies is not immune to these turbulent economic times. Archway cookies is closing one of its plants adding another 100 people to the jobless category. Seems like every day some other company is closing locations or laying people off. Many people have remarked this may be the start of the second great depression. I don’t know if this is accurate or not. I hope its not, but the news is not good. As I type the Dow Jones is another 537 points to the downside. This comes as banks in Europe have announced they are facing many of the same issues as the U.S. banks. There are also markets around the world down sharply as much as 15% down. Some of these markets have halted trading in an attempt to stop the bleeding.
The bailout bill news passed on Friday has not had the effect many hoped it would have. Hopefully this will soon stop and we can get back on track.
Senate Banking Committee Speeches
Wall street has had a dreary outlook lately. This lackluster performance comes form fears about the credit market, to rising energy costs, the FDIC’s list of troubled banks. The Federal reserve chairmen Ben Bernanke did not help the mode this morning at the Senate Banking Committee:
"The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth," Bernanke said in a speech to the Senate Banking Committee this morning. "At the same time, upside risks to the inflation outlook have intensified lately."
Inflation "seems likely to move temporarily higher in the near term," Bernanke said.
Bernanke also highlighted the problems in the financial markets, which he said remain under "considerable stress."
"Helping the financial markets to return to more normal functioning will continue to be a top priority of the Federal Reserve," Bernanke said.
This is not good news for an economy which is increasingly coming under pressure. Yesterday the FDIC added to its list of troubled banks and there has been a multitude of fear surrounding the collapse of the IndyMac Bank as well as many fears about the financial state of Fannie Mae and Freddie Mac. These are all issues that must be addressed or our economy is going to continue to worsen as time goes along. Many Americans are already feeling the crunch of the sagging economy and there seems to be no end in sight.
Since it does not appear we have any leadership in Washington either in any office or running for an office, then there does not seem to be a light at the end of the tunnel. As I type the markets are slumping with the Dow Jones off another 130 points today to go along with yesterday’s decline. Obama is giving a speech where he is talking about what we should have done and not what he plans to do. No leadership any where by anyone. No telling where we will end up next.