Is PPIP DOA over compensation?

[seanm123]

Treasury Secretary Geithner testified yesterday that the new executive compensation rules should not apply to PPIP while the Lawyers from his own Treasury Dept released a report saying the compensation rules do apply.



From his testimony “”My judgment is that those compensation rules do not need to apply”.


He seems to missed the memo that the Congressmen and Senators down in DC want these compensation rules enforced, because their constituents lit up the phones on the switchboard demanding it.



I wonder how long untill Pelosi bangs her gavel and demands he be replaced?


http://www.businessinsider.com/henry...ay-caps-2009-4

[Chomsky]

Re: Is PPIP DOA over compensation?

I also think it's DOA because of the relaxed FASB rules. Now that banks can mark-to-make-believe again, there is no possible way to evaluate the "toxic assets." Why would anyone try to buy something for which they have no idea what it's worth, even if they are getting a massive, risk-free loan to buy it?

[D-Mack]

Re: Is PPIP DOA over compensation?

I bet Timmy loves it

[rjwjr]

Re: Is PPIP DOA over compensation?

I've never understood the mindset behind capping executive compensation.

There are so many aways around straight compensation that I seriously doubt it would be the reason for PPIP's purported death.

[petertribo]

Re: Is PPIP DOA over compensation?

I bet Timmy loves it

Ladies, for max media the sign should read "Timmie is a PIPPsqueak."

[ASH]

Re: Is PPIP DOA over compensation?

Why would anyone try to buy something for which they have no idea what it's worth, even if they are getting a massive, risk-free loan to buy it?

For that matter, with mark-to-make-believe, the owner of a toxic asset is now choosing between valuing the asset on their books on the most advantageous basis they can invent, or selling to PPIP for what someone else thinks the asset is worth as a speculative play. What are the odds that the owner's balance sheet will look better with the asset valued at their make-believe price, as opposed to with the asset sold for the best price they can get from PPIP?

[Chomsky]

Re: Is PPIP DOA over compensation?

For that matter, with mark-to-make-believe, the owner of a toxic asset is now choosing between valuing the asset on their books on the most advantageous basis they can invent, or selling to PPIP for what someone else thinks the asset is worth as a speculative play. What are the odds that the owner's balance sheet will look better with the asset valued at their make-believe price, as opposed to with the asset sold for the best price they can get from PPIP?

Absolutely.

Here's another reason PPIP is DOA: government-forced abrogation of mortgage contracts.

The head of Greenwich Financial Services LLC warned bond investors in Washington last month that government efforts to reverse the housing slump are doing more harm than good by undermining debt contracts.

More than 30 money managers with stakes in the $6.7 trillion mortgage bond market that underpins the real-estate industry heard Bill Frey’s March 25 talk, according to a list of the attendees. Since then, a group of investors with home-loan bonds totaling more than $100 billion have hired Patton Boggs LLP, Washington’s biggest lobbying law firm, said Micah Green, a partner and former head of the Bond Market Association.

Bondholders are preparing for a fight over legislation approved last month by the House of Representatives that would shield companies that collect homeowners’ payments from lawsuits over modified mortgages, even if new terms harm investors. The government’s actions may increase borrowing costs because creditors would demand higher returns to compensate for the risk that once-sacrosanct investment terms can be changed, they say.

“Certainly some greater amount of loans should be restructured, but it is a fallacy to think that policymakers can selectively abrogate contracts without affecting future investor behavior,” said Frey, chief executive officer of Greenwich Financial, a mortgage-bond broker and investor in Connecticut. “We are actively exploring strategies with major investors to protect their rights,” he added in an e-mail.

http://www.bloomberg.com/apps/news?p...efer=exclusive