Have you 'Stimul(us)ated' enough today?

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I think I contributed to the American economy yesterday. I bought clothes worth $79.78c from Old Navy. All in the name of 'stimulating' the economy ofcourse...

Well if you look at the stimulus plan in detail ( I don't think you can though..it's over a 1000 pages long) but if you did and if you also heard the Treasury Secretary's "plan" on reviving the economy, you would probably understand why it's upto regular folks like us to stimulate the economy.... While some believe that we should leave stimulating the economy to the government, i hold the opposite view. Well... not an extremely opposite view... I mean you needn't go bankrupt to stimulate...but a few indulgences here and there would be just what the doctor ordered for this ailing economy.

In any case, I thought I would note some interesting facts on Prez Obama's plan including some that could directly affect some of us:(easier than reading 1000 pages, no?)

1. It appears to be the longest congressional vote in history after requiring 5-hours and 17 minutes.
2. An income tax credit of upto $400 for individuals and $800 for couples in 2009 and 2010. Individuals earning upto $75,000 and couples upto $150,000 will qualify for a full credit.
   
3. First time homebuyers will be able to claim a tax credit of upto $8,000 for purchaszes made by Dec1, 2009.
4. Accelerated depreciation for businesses.
5. More highways and bridges than mass transit ,which is expected to ceate close to 835,000 jobs.
6. Money for high speed rail was quadrupled to $8 billion...wholly inadequate by some accounts, California estimates it will cost $45 billion to build its high speed rail.
7. For the jobless, the federal government would offer premium subsidies by paying 65% of the cost of group health benefits under the Cobra law for upto 9 months.
8. 7 Democrats joined 76 Republicans to oppose the bill in the House.
9. According to an analysis by the Congressional Budget Office, over 74% of the money will be spent in the next 18 months.

These and more details can be viewed in a concise and easy to read image here. (Courtesy the New York Times.)

Live Blogging- CEO's Questioned on Allocation of TARP funds.

Watch CEO's of large banks who received TARP funds being questioned over their allocation of these funds at http://www.cspan.org/Watch/C-SPAN3_wm.aspx

We will be live blogging so check back often...

10.15 a.m. No action yet...politicians cat fighting over time allocation to get their 2 bits in....

10.35 a.m. CEO's start their prepared testimony...basically defending themselves...
from the kind of information that these CEO's are presenting, it looks like their lawyers have done a great job!
Citi CEO has requested his Board to pay him a $1 salary and no bonus till the bank returns to profitability.

11.21 Rep Kanjorski- When did you first realize that there is a huge problem, what did you do?

BOA CEO Lewis- August 2007 timeframe the then treasury secretary contacted us....
Goldman CEO Blankfein- Before August 2007.

Rep Kanjorski- What do you see in the future? Have we failed?
No time for answer.

11.30 Rep Waters- Since you received TARP funds have you increased credit card interest rates?
BOA- Yes increased credit card rates to 9% customers
Citi- Yes
did you reduce the amt of credit available to customers?
None
Rep Waters to BOA- Do you have a loss mitigation department offshore?
BOA CEO- I dont know
You have to be 2 months behind to receive loan modifications?
None.
According to Rep Waters BOA & CITI received processing fees for receiving TARP funds. (None of the CEO's quite understood this...)

11.40a.m. Responding to a question, CITI CEO claims that Citi is successful at helping its mortgage customers if customers talk to them, open up to them.
Rep Maloney- Questions BOA CEO on the issue that has been on everybody's min...Merill's multi billion $$ bonuses.

Shocking Markopolos Testimony on Madoff Ponzi Scheme.

Mr Markopolos, the whistleblower in the Bernie Madoff Ponzi scheme, is due to testify before the House of Representatives- Committee on Financial Services on Feb 4th.

A copy of his testimony has been made public in advance......at 65 pages long, it is at once facinating and shocking.

Check it out for yourself here.

Super Bowl, Innovative Severance, etc.

First a word or two about the Super Bowl. To be honest, I am not a huge fan of American Football....I follow cricket and on occasion, some basketball. The only reason I look forward to the Super Bowl is for the ads. The mega hype surrounding these ads is strong enough to compel me to tune in. I am an enthusiastic supporter and participant of online polls that vote for the Best and Worst ads. This year CareerBuilder.com's 'Tips' ad has been voted as the Best and the Worst Ad on WSJ.com. See it for yourself here.

Now lets get down to business.....

This blog has often noted irregular, bloated or ridiculous severance payments to senior executives ....these agreements are getting more and more innovative, not to mention costly for companies and shareholders. Here is another one I found for New York & Company.

Mr. Richard Crystal has consented to extend his employment agreement until Feb 11th, 2011 without a salary increase...the kind man has also given up his severance payment of $3.9 million which he might have received in 2011 if his employment agreement did not get extended at that time. One might think.....there has to be a catch somewhere, right? I mean the man works at the same 'measly' salary of about a million bucks and agrees to waive severance.

But wait....here is the catch. In exchange for 'waiving' his severance, New York & Company's shareholders have to shell out $2 million between now and 2011. It's been termed as a 'signing bonus' for Mr.Richard Crystal. Signing bonus for an existing CEO? In today's hardpressed times? After announcing a cut of 310 jobs in January of this month?

As he put it himself while announcing the job cuts and store closings earlier last month,"These are unprecedented times in the retail industry and across many other industries and geographic regions."

The times may be unprecedented, Mr.Crystal but so is your modified employment agreement.