Ironically neither the NY nor LA Times headlined these new items...
United's top execs stand to gain a lot
By Marilyn Adams, USA TODAY
United Airlines' creditors and two labor unions have asked a judge to block its exit from bankruptcy over a proposal to reward CEO Glenn Tilton and several hundred top executives with a 15% stake in the reorganized company.
Under a proposed plan, 400 top executives of the Chicago-based airline would split $285 million worth of newly issued stock after the carrier exits bankruptcy. So far, management at the USA's No. 2 carrier has refused to make public how the stock would be awarded. After three years in Chapter 11, United hopes to exit as early as next month.
For any that had their doubts here it is in black and white. After scrapping the EMPLOYEE'S pension plan (you can bet THEIR plan is intact) putting thousands of workers on the street and slashing wages across the board these miserable bastards want to `reward' themselves with a bonus that's nearly ten percent of what they wrung out of their employees!
If we ignore the obvious question (how do these people sleep at night?) we're still left with the nagging doubt as to whether or not United's bankruptcy wasn't just a convenient ploy executed to shed it's obligations to the people who built the business, their workers.
Management revealed the outline of the plan in an earlier court filing. The lack of details has caused the matter to fester.
In a Tuesday filing, non-secured creditors said the proposed stake for top managers is extraordinary, and they protested the refusal of management to spell out details. The creditors' committee wants management to get a smaller stake.
In a Monday court filing, United's largest union, the International Association of Machinists, called the management stock plan "grotesque" in light of the billions of dollars in pay and benefits that United's rank-and-file workers gave up during restructuring.
The IAM and the Association of Flight Attendants have asked the bankruptcy judge to reject United's reorganization plan unless the executive stock plan is scrapped.
United's executive pay plan follows three years of painful cost cutting. Workers, most of whom are unionized, took pay and benefits cuts totaling more than $3 billion a year for five years. United also terminated all of its employee pension plans to reduce its debt. Thousands of workers were laid off.
All the objections call the stock plan vague and excessive. Altogether, 18.7 million shares in corporate parent UAL would be reserved for senior managers. At a share price of about $15, the managers would divide $152 million upon exit, the rest later.
United spokeswoman Jean Medina said the 15% share "is in line with market practices," citing a study by consultant Towers Perrin of 45 U.S. companies exiting bankruptcy. She said the company wants to resolve the problem but declined to say how. The dispute is unlikely to delay United's planned exit, Medina said.
Boston bankruptcy lawyer Jon Schneider said awarding stock to top management is "very typical," but that the United proposal is generous. Usually the management stake in a reorganized company is 5% to 10%, he said. "Fifteen percent is outside the norm, and it's 15% of a very big company," he said.
I'm thinking it's this last statement that's the most damning, not the 15% being `outside the norm' but the `very typical' part. What's not spelled out here is whether or not any of these top exec's took a pay cut or even went without a raise during the reorganization.
If these self-serving bastards had `shared the pain' don't you think it would have made the news?
This kind of thing makes you wonder just what constitutes `looting the company'? If forcing pay cuts and slashing benefits only to pocket a portion of the savings wrung from your employees isn't looting then I don't know what is.
The fact that something like this is an acceptable legal practice only reinforces the fact our society is being run by a band of criminals. Try to keep that in the back of your mind as you contemplate the concept of `free and fair' elections.
Then there was this little ditty:
Risky mortgages could be harder to get
By Kathy Chu, USA TODAY
Qualifying for a low-payment, high-risk mortgage is getting harder.
Federal regulators plan to issue a notice this month that could make lenders more hesitant to offer "non-traditional" mortgages -- such as interest-only loans and option adjustable-rate mortgages -- to people with weak credit or finances.
In the third quarter, 33% of first mortgages approved by lenders were non-traditional loans, compared with 1% five years ago, according to LoanPerformance, a research firm.
A full third, up from just 1% a `coincidental' five years ago...same time the Shrub took office.
Interest-only and option ARMs are fairly complex mortgages. Typically, borrowers make artificially low payments for a period, such as five years. Afterward, payments shoot up to reflect current interest rates and the principal owed. Regulators worry that some borrowers lured by these mortgages' initial low payments won't be able to handle higher payments later. Lenders would then be at risk for loan defaults.
Interest-only loans and option ARMs have likely contributed to the surging housing market, because they let borrowers buy more expensive homes than they normally could afford. Non-traditional mortgages have become more widely available as companies have rushed to meet demand. Quicken Loans, for example, began offering option ARMs this year and interest-only loans two years ago.
If non-traditional mortgages become scarcer or if borrowers turn away, "That could have a cooling effect" on the housing market, says Glenn Costello, a managing director of Fitch Ratings.
Borrowers who use such loans would see their mortgage balances rise over time if their monthly payments don't cover the loan's interest, Federal Reserve Governor Susan Bies has warned. And lenders risk higher defaults if they ease up on safeguards, such as verifying borrowers' income, Bies says.
Regulators plan to formally weigh in on the risks of these mortgages by year's end. The notice will address how banks qualify borrowers for loans, the lenders' portfolio risk and the "payment shock" borrowers could face as their payments rise, says Barbara Grunkemeyer of the Office of the Comptroller of the Currency.
The likely result? This will "pressure lenders to tighten standards," says Keith Gumbinger of HSH Associates, a publisher of loan information. "That may mean that somewhat fewer borrowers qualify."
Some mortgage lenders aren't waiting to take action. New Century Financial says it's cutting back on interest-only loans because they were "highly concentrated in the (company's)portfolio" during some quarters. Washington Mutual and Golden West Financial have raised the introductory interest rates on option ARMs in recent months.
Stagnant wages and rising interest rates will combine to fill the nation's newspapers with notices that read `Mortgagee's sale of real estate'. This was the disaster that marked the end of Regan's second term in office.
Will we watch history repeat itself, in spades this time? It's not government that's being drowned in a bathtub (of debt); it is you.
Through no choice of your own I might add. Those who have property have been forced to re-fi to keep their credit card debt in check as supposedly non-existent inflation spiraled and paychecks fell short.
You were robbed. The question that remains to be answered is are you going to let them get away with it?
Thanks for letting me inside your head,
Gegner
PS: I'm the only one here putting forth a viable solution for a sustainable society but admittedly, I'm not an 'economist'...so you won't find my name on the list of panelists on Kos's economics panel...which is probably a good thing as I don't know the first thing about voodoo.