AIG fights for the right to party
While the government was giving AIG $85 billion to keep it from filing for bankruptcy, AIG was… throwing a party. A $440,000 party, to be exact. Nothing big, nothing fancy. Just 100 people playing golf and staying in luxury hotel rooms at the St. Regis. And why not? Don’t they deserve a break too? I mean, it must be really hard letting down so many people and almost bringing total economic collapse upon the country. Wouldn’t you need some cheering up if you had a hand in ushering in the Dark Ages? And as AIG explained in a letter to the U.S. Treasury Secretary Hank Paulson, “the event was planned before the bailout.”
Oh, well, no problem. As long as you had it planned before the bailout the American public shouldn’t mind that you spent almost half a million of their money on a party.
And you wonder why the American public didn’t want to spend $700 billion bailing out Wall Street. I know that $440,000 is nothing compared to the amount of money AIG received, but still, you sure know how to piss a country off.
Don’t let the mortgage crisis get you down! Franklin Raines isn’t!
We know that Franklin Raines, the former CEO of Fannie Mae, must be really sad that the mortgage finance company that he used to run is now controlled by the government. He must feel just awful that Fannie had to “restate billions in earnings because of accounting problems during his tenure.” (USAToday.com). He must feel downright depressed that so many Americans are caught up in this mortgage crisis. He’s most likely devastated about manipulating the American public by bogus accounting tactics. So, we’re not too surprised that he has done something to try and make himself feel better. He’s gone shopping!
According to the Washingtonian, “Franklin Raines, the former top man at Fannie Mae, bought a three-bedroom, seven-bath penthouse condominium in the West End’s Ritz-Carlton Residences for $4.9 million. The condo has a rooftop terrace with a hot tub, a butler’s pantry, and three parking spaces. Raines, director of the US Office of Management and Budget under President Clinton, was CEO of Fannie Mae from 1999 to 2004.”
In case you’re not angry enough yet. I’ll repeat: seven bathrooms. No one needs seven bathrooms.
$2 Trillion in retirement savings lost
This week Congress’ top budget analyst estimated that American’s retirement plans have lost $2 trillion in the past 15 months. That’s approximately 20% of their value.
Many Americans will have to delay their retirement. And many have had their savings trashed. Some older Americans have lost everything—even though they had more conservative investments, their account balances were larger, meaning they had more to lose.
What can you do? For starters, diversify and allocate your assets. Make sure you don’t have all of your money in stocks. You should have some assets in the more conservative money market/stable value funds and bonds. They might have a lower payoff but they also have a lower risk.
The devastation of retirement accounts is going to affect us all. What happens when all of these people have nothing? Who is going to take care of them? Like everything else in the economy there will be ripple effects from this, for example: less spending, and less people leaving jobs to make room for new hires.
So while AIG is throwing lavish parties the American public gets more bad news and more suffering.
Maybe we should all go stay with Franklin Raines.
Women and the economy
Bettyconfidential.com recently completed a survey about how women are being affected by the economic downturn. They found that anxiety, insomnia, and fear are common. That spending habits, as well as psychological well-being, were affected.
Twenty-five percent of women are worried about affording groceries and gas—staples of life. Women also worry about: job loss, credit card payments, losing everything they’ve worked for, and a “general fear for the country’s future.” But women’s biggest fears are retirement (31%), and day-to-day living (29%).
Actual changes due to troubled economy:
• Retirement plans (44%)
• Career plans (27%)
• Home owning plans (14%)
• Wedding/honeymoon plans (3%)
How spending habits have been affected:
• Cut back on luxuries (59%)
• Take a second job (12%)
• Postpone buying a home (10%)
• Go back to work (7%)
• Other, including save more, move, and cut back on food
40% of women say they worry more than their spouses about finances. To read the entire survey visit BettyConfidential.com.