Syron & Mudd – the dangerous duo

Taxpayers are now on the hook for tens of billions of dollars of capital necessary to save Fannie Mae and Freddie Mac. The CEOs of both companies–the ones who ran them into the ground–have thankfully been shown the door. But they’re taking a nice pot of money with them.

Specifically, Dan Mudd, the CEO of Fannie Mae, is getting $9.3 million of severance for destroying his company. Richard Syron, the CEO of Freddie Mac, is getting $14.1 million–in part because of a clause he added to his employment contract two months ago, when it was clear the company was headed for disaster…

The severance money comes right out of the pockets of taxpayers, who didn’t agree to the severance deals and aren’t ponying up to save the companies because they want to. Taxpayers are saving Fannie and Freddie because they have to–because Mudd and Syron were incompetent.

“Incompetent”? Is that too harsh? Absolutely not. Both men gambled big and lost bigger. The fact that they may not have appreciated how big a risk they were taking is no defense: If they didn’t, they should have.

Both Mudd and Syron chose to run their companies at an astronomical level of leverage, borrowing more than $50 for every $1 they put to work. Why? Because, in the good years, the companies made more money than they would have had they been levered, say, 20-to-1. Just because a housing crash of the current magnitude hasn’t happened since the 1930s doesn’t mean Mudd and Syron shouldn’t have guarded against it. Instead, they chose not to, and the companies–and shareholders and taxpayers–have paid the price.

They should be forced to take what shareholders in the companies are getting: nada, nothing, nuttin’ honey…

Thanks, Justin




  1. Wretched Gnu says:

    As expected, the Republicans and conservatives are looking to shift the blame that lands squarely on their shoulders.

    My favorite argument from some genius above is that the lenders did nothing wrong; their borrowers are at fault. It’s hard to believe that anyone above the age of 12 needs to be reminded of the fact loan repyments were never part of their plan. As Wall Street Republicans fought tooth and nail against rules that would have prevented it, the plan of the lenders was *always* to leverage the loans into more concrete investments for themselves and their buddies.

    They knew from the start they wouldn’t be held accountable for the stupid loans they created and bought up — because they gave lots and lots of money to lawmakers, mostly Republican, to ensure they would have no legal accountability.

  2. Paddy-O says:

    #21 J babbled, “I know two people that completely support the bailout.

    George W. Bush & John McCain. You know the twins!!!”

    So, WHO controls spending bills? What an idiot.

  3. J says:

    # 32 Paddy-O

    “So, WHO controls spending bills?”

    The president has VETO power doesn’t he? It didn’t have 2/3 majority in passing so if he vetoed it, it most likely would die.

    That doesn’t change the FACT that your candidate backs president Bush and SUPPORTS the bailout.

    You want to ignore the fact that BOTH Bush & McCain wanted the money for communities to be removed before they supported it. They only want the money to go to the rich folks who caused the problem in the first place. Fuck the communities!

  4. Paddy-O says:

    #33 “The president has VETO power doesn’t he?”

    So, the Pres can veto a spending bill into existence? The Pres can originate a spending bill?

    Wow! You have the IQ of a carrot.

  5. bobbo says:

    Just watching Senator Dodd interviewed yesterday on Newshour with Jim Lehrer. He was asked if Congress could have done anything to prevent the sub-prime mess.

    Dowd said that the housing market would be 20 times worse if the GSA’s hadn’t made 30-year mortgages available to millions of Americans.

    I’m stunned. Thats about as head-up-you-ass thinking as thinking the President can’t get legislation authored by congressmen in his own party that he is the head of.

    What do you think Paddy? Are people really that stupid, or are they just playing hide the pickle?

  6. Paddy-O says:

    #35 “What do you think Paddy? Are people really that stupid, or are they just playing hide the pickle?”

    Dodd is an idiot. You are surprised?

  7. J says:

    # 34 Paddy-O

    “So, the Pres can veto a spending bill into existence? The Pres can originate a spending bill?”

    As a matter of fact dipshit, the Bush administration ASKED congress for the bailout back in July!!! How fucking un-informed are you?

    BUSH AND MCCAIN SUPPORT THE BAILOUT!!!!! What part of that don’t you understand? and I’m the one with a low IQ? LOL please!!!!

  8. Paddy-O says:

    #37 “As a matter of fact dipshit, the Bush administration ASKED congress for the bailout back in July!!! How fucking un-informed are you?”

    So, I ask again. Can a pres originate a spending bill and/or veto one into existence? Or, does it require the House majority party to pass one?

    Waiting…

  9. Mr. Fusion says:

    #13, Pirate,

    Good post and, along with “J” the closest to the issue.

    I still say that the two largest cause of defaulted mortgages are job loss and medical emergencies. When all the good paying jobs leave, there is no one left to pick up the slack. Thus the defaulted mortgages on houses that no one wants to buy because their own situation is also tenuous.

  10. Paddy-O says:

    #39 “When all the good paying jobs leave, there is no one left to pick up the slack. Thus the defaulted mortgages on houses that no one wants to buy because their own situation is also tenuous.”

    Yep. Both parties love off-shoring our jobs…

  11. Mr. Fusion says:

    #38, Cow-Paddy,

    When you find yourself in a hole, you should stop digging.

    Repeatedly you have spouted off nonsense. Even when corrected you still keep coming back for more.

    Let me recap for you. The President asked for a bailout. Congress authored the bill as they saw would help all Americans best. The President threatened a veto if language was included that would help out seriously hurt communities. Congress had to evaluate whether to get a quarter loaf or no loaf. They chose the quarter loaf as it is better than nothing.

    Now, the answer to your question of whether the President can originate a spending or budget bill. The answer is yes. All he has to do is find a like minded Congressman to table the bill in Congress.

  12. Paddy-O says:

    #41 “Repeatedly you have spouted off nonsense. Even when corrected you still keep coming back for more. ”

    Really?

    1) The House isn’t the only body that can originate spending bills?

    2) The House is passing this.

    3)The House is controlled by Dems.

    4) A Pres can’t veto a bill that doesn’t exist.

    So, which of these 4 are “nonsense”?

  13. J says:

    # 38 Paddy-O

    “So, I ask again. Can a pres originate a spending bill ”

    What part of “The Bush administration asked congress” don’t you understand?

    YES! The president can ask for legislation to be written. He got what he wanted!

    Then if he doesn’t like it he can VETO it. Which he threatened to do when he saw that there was money in it to help communities.

    HOW FUCKING DUMB ARE YOU???????

  14. Paddy-O says:

    #43 “What part of “The Bush administration asked congress” don’t you understand? ”

    Sorry, that doesn’t qualify as “originating a spending bill” as per the Constitution. No, more than if you or I ask the House.

    Thanks for playing.

    Get back to me when you finish grade school and we’ll discuss some more.

  15. Cursor_ says:

    When my business goes under I am asking the government for my bailout and gold parachute and I will sue if they do not provide it.

    Cursor_

  16. J says:

    # 42 Paddy-O

    “1) The House isn’t the only body that can originate spending bills?

    2) The House is passing this.

    3)The House is controlled by Dems.

    4) A Pres can’t veto a bill that doesn’t exist.

    So, which of these 4 are “nonsense”?”

    Number 1 is nonsense. The Administration can submit a bill through a congressman or ask congress to create a bill. So the original idea for the bailout was the Bush administration. NOT CONGRESS!!

    Since that is the case the rest of your list has no meaning but I will make a point with number 4. A bill doesn’t get enacted into law without the presidents signature.

    # 44 Paddy-O

    “Sorry, that doesn’t qualify as “originating a spending bill as per the Constitution”

    Don’t make me have to school you on Article 1 Section 7 It happens all the time. You are just too stupid to understand the process.

    “No, more than if you or I ask the House.”

    The President asking is VERY MUCH different than you or I asking.

    “Get back to me when you finish grade school and we’ll discuss some more.”

    Hey Chief You are the one that needs a bit of schooling on the matter.

  17. Paddy-O says:

    Let’s see. We’ve firmly established which party is writing the check for this bailout.

    I wonder which party created the monster? Hmmm, could it have happened in 1938 when the Dems controlled Congress?

    In 1968 when they were given their current status by congress who was the majority party?

    Hmmm. I see a pattern here…

  18. MikeN says:

    What makes you think shareholders are getting nothing? That’s just what they claim, but it’s only nothing if the government exercises its warrants on the shares.

  19. MikeN says:

    Jim Johnson ran Obama’s VP search committee. Fannie and Freddie are crawling with Demcorats.

  20. J says:

    # 47 Paddy-O

    “Let’s see. We’ve firmly established which party is writing the check for this bailout.”

    How fucking dumb are you? Typical fucking Republican thinking. WHY DON’T BUSH AND MCCAIN COME OUT AGAINST IT IF THEY THINK IT IS A BAD IDEA????

    Your process of thinking is so child like and simple. Are you out on recess right now?

    The Bush administration ASKED FOR and GOT and will soon SIGN THIS BILL. How fucking dumb are you? How stupid do you have to be to see it the way you do? You understand NOTHING of how this government works and yet you flap off at the gums about how uneducated you are. You try to use Article 1 section 7 to back up your position but you don’t even know what it means. You are a fucking dolt with the agenda to blame all YOUR problems on the Democrats when it was your team that lost the game.

    “I wonder which party created the monster? Hmmm, could it have happened in 1938 when the Dems controlled Congress?”
    Again why didn’t ANY of the Republican Congresses shut it down then? It ran fine for 62 + years. Most companies don’t last that long. So It was a perfectly good idea and under the right leadership it still would be.

    “In 1968 when they were given their current status by congress who was the majority party?”

    No, in 1968 they were taken off the government dole. Isn’t that what all you Republicans are for, private ownership?

    “Hmmm. I see a pattern here…”

    Me too. You get dumber with every post.

  21. Paddy-O says:

    #50 “Again why didn’t ANY of the Republican Congresses shut it down then? ”

    The next time the repubs had a big majority was just recently. It wasn’t enough to pass leg through the Senate over filibuster threats, same reason getting rid of the current income tax failed by repubs. Credible threatened filibuster by Dems in Senate.

    Any other questions?

  22. LibertyLover says:

    How fucking dumb are you? Typical fucking Republican thinking. WHY DON’T BUSH AND MCCAIN COME OUT AGAINST IT IF THEY THINK IT IS A BAD IDEA????

    For the same exact reason the Donks didn’t tell him, “No,” when he asked. They wanted it, too.

    I have never seen so many caps in a post explaining why the majority was powerless to vote down a bill.

    You crack me up!

  23. Paddy-O says:

    #52 “I have never seen so many caps in a post explaining why the majority was powerless to vote down a bill.”

    I think I just realized what he’s trying to tell us.

    The dems are powerless when in the majority (and only do what the minority tells them) AND when in the minority.

    So, why vote for them?

  24. J says:

    # 51 Paddy-O

    “It wasn’t enough to pass leg through the Senate over filibuster threats”

    Bullshit! Show me the bill that the Republicans wanted and had enough Republican support to pass. I bet you can’t.

    “Any other questions?”

    Do you really believe your own bullshit?

    # 52 LibertyLover

    “For the same exact reason the Donks didn’t tell him, “No,” when he asked. They wanted it, too.”

    Thank you! Do we all agree then that George Bush and John McCain wanted to bail out Fannie mae and Freddie Mac?

    “I have never seen so many caps in a post explaining why the majority was powerless to vote down a bill.”

    I never said they were powerless. They were covering their ass. If they said no, the president could turn around and blame them for the failing housing market. Apparently you don’t know how “politics” works

    I use caps when I have to repeat something over and over that they didn’t catch the first time. I figure it is perhaps they have poor vision because they they seem to not grasp the concepts that they are discussing and they only conclusion I could reach is they have poor vision or they are fucking stupid.

  25. Paddy-O says:

    #54 J said, “Bullshit! Show me the bill that the Republicans wanted and had enough Republican support to pass. I bet you can’t.”

    Here ya go. Look up the details. What a moron…

    “Jun 18, 1998 WASHINGTON — In an election-year attempt led by Oklahoma congressmen to jolt the tax reform debate, the U.S. House passed a bill pushed by Sooner Republican Steve Largent to eliminate much of the nation’s income tax code by 2003.

    The House voted 219-209 to approve the Republican-backed Tax Code Termination Act. It would eliminate the current tax code — except for Social Security payroll taxes”

  26. J says:

    # 55 Paddy-O

    I’m not talking about the tax code dipshit. I am talking about the bill that covers Fannie mae and Freddie mac and their GSE status.

  27. Rick Cain says:

    We should have just let it all crash. Houses cost too much, and as punishment for the financial markets excesses, people should have gotten their mortgages discharged and keep their houses for free.
    The next time around, high finance would have been more cautious.

    But nooooo, bail us out! Now the mortgage holder STILL has to pay overinflated rates.

  28. qsabe says:

    Can’t let it crash. China and the Saud’s hold all that mortgage debt. .. If it failed, they would repossess all the houses in the US and make you work in the rice fields providing food for Arabs lost wandering in the desert with nothing but oil to eat.


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