Lake Forest Mark North Seattle Realtor

So, did you hear the one about the economy?

I'm sure that you did, and found the punchline as repulsive and sour as I did.

The cruelest joke of them all, however is the pay of the executives of these collective companies that were recklessly run into the ground and then either gobbled up or bailed out.

Don't get me wrong, I feel that CEO's should be allowed to make gobs of money, so long as their stockholders earn as well, relatively speaking.

But if their gambles don't pay off, doesn't it reason that their pay should reflect their performance?

It makes sense to me.

Here is a list of the Main Offenders, whose pay will effectively be paid by us, the American Taxpayer:

Company: Merril Lynch

CEO: Stanley O'neal

Shortly before being let go, Merrill Lynch wrote down 7.9 billion dollars due to O'neal's foray into sub prime lending. Total write downs are approaching 45 billion

Payout: 161.5 million Dollars

---

Country Wide Financial

Angelo Mozilo

Company's worth has shrunk from 25 billion to 2.5 billion. Mozilo Cashed out his stock options has the bank went into freefall.

Payout: 121.5 million dollars

---

Citigroup

Charles Prince

In 2007 Citigroup reported a 57% drop in quarterly earnings and lost a quarter of its market value. So he did the honorable thing and...stepped down.

Payout: 68 million dollars

AIG

Robert Willumstad (July 08-September08)

Martin Sullivan (2005-2008)

Maurice (Hank) Greenberg (1968-2005)

AIG, the worlds largest mortgage insurer, saw it's stock plunge from $27 to $2 per share in 2008. Just agreed to an 85 million dollar payout by the Federal Government

Robert Willumstad rejected 22 million dollar severance package (good for him!)

Martin Sullivan 47 million dollar severance package

Maurice (Hank) Greenberg 6-Year Average Compensation in 2003 25 million dollars per year

WAMU

Kerry K Killinger

Alan Fishman

The appropriately named Killinger, CEO of Wamu since the early 90's, oversaw a rapid expansion of WAMU and its foray into the riskiest types of loans. He was ousted as CEO on September 5.

Fishman was on the job for 3 months before Federal Regulators seized it and brokered a fire sale to JP Morgan Chase

The collapse of WAMU was by far the largest bank failure in US history at over 300 billion dollars.

Killinger Up to 22 million dollars

Fishman Up to 13 million dollars or $928,571 PER DAY during his tenure

Fannie Mae and Freddie Mac

Daniel Mudd and Richard Syron

While boasting of feasting on the reduced competition in the market place and rejecting internal warnings, Fannie slumped 85 percent and Freddie's Value sank to negative 5.6 billion dollars

Payout: Zero!.

While Syron has made over 17 million dollars in compensation since 2003, regulators shot down any severance pay for the two CEO's.

Bear Stearns

Jimmy Cayne

Too busy competing in bridge tournaments to deal with his company's precipitous slide, Jimmy was hard to reach by anybody while Bear Stearns was purchased by JP Morgan Chase for $10 dollars a share, down from $170 in 2007. During the slide, Poor Jimmy saw his personal fortune dwindle from 1 billion dollars to a paltry 600 million

Cayne dumped his Bear stock during the JP takeover, and got a payout of 61.3 million dollars.

Oh, he'll also receive about 5 million in JP stock

Indy Mac Bank

Michael Perry

Perry, a protege of the aforementioned Michael Mozilo, lorded over a bank for 15 years that became the second largest bank failure in US history, second only to the recent WAMU collapse.

His payout is unknown for sure, but Forbes reports that it was in the neighborhood of 38 million dollars.

Lehman Bros

Richard Fuld

These are all unbelievable numbers, to be sure, but the King Daddy of them all, the Hannibal Lecter, Charles Manson, and OJ Simpson of the financial world is none other than Richard Fuld

Lehman Bros, a 158 year old company that weathered the Great Depression, declared bankruptcy on September 15th.

Over the last five years of his tenure, Mr. Fuld raked in 354 million dollars by cashing in options and selling off of his stock. That is NOT a typo. 354 million dollars, and some reports have it closer to 500 million. For those of you with a difficulty processing zeroes, that is a HALF A BILLION DOLLARS.

So, read em and try not to weep. I'll try to have better news for you on my next post.

My best,

LFM

---

---

Megan Tully, who is with the Seattle Animal Shelter, and a contributor to LakeForestMark.com just passed along this info to me:

"Adorable cats and kittens in foster care with Seattle Animal Shelter volunteers will be available for adoption this Saturday, Sept. 27 from 12-3 pm at the Bitter Lake Community Center, located at 13035 Linden Ave. N"

Find a furry friend for fall! More information is available at www.seattle.gov/animalshelter or www.petfinder.com..

FOR MORE INFORMATION CONTACT:
Don Jordan (206)386-4286
(206)953-2529 cell
Katherine Schubert-Knapp (206) 684-0909
Kathy Sugiyama (206) 684-0909

My best,

Lake Forest Mark

The financial news of late has been anything but rosy, and it is the last of my intentions to add fuel to the fire. The housing market is where I butter my bread, after all.

But I would like to point out how this mess that originated with the housing market, is affecting our housing market here in Lake Forest Park and North Seattle in general. I think at one point we felt immune to what the rest of the Nation was dealing with, but that tune is slowly changing.

Did you know that in August there were 270 active residential listings (single family and condos) on the market in Lake Forest Park? And guess how many sold properties there were?

Hazard to make a guess?

3. That's right, 3. That's about a 1% absorption rate, which the percentage of houses sold vs. active listings.

In just East Shoreline (not counting West Shoreline and Aurora Village), there were 441 active listings(!), with 20 sales, for a slightly better 4.% absorption rate.

In West Shoreline, it was similar to the East, with 443 active, and 20 sold.

Now, we are seeing more activity here in September and my guess is that we will end up with slightly better numbers than August, in spite of the Wall Street doing it's best to crumble into oblivion and take the rest of us (and our wallets) down with it.

So, really, my advice to you is if you don't absolutely have to sell your house, then for your own sake and the sake of the housing market, please don't.

This situation will not turn around until a good chunk of this inventory is sold off, and that likely will not happen very soon.

On the other hand, if you are a buyer and you are interested in buying a home and stay in it for years and not months, then the deals out there are plentiful.

In my next post, I will tell you where I think the deals are, and why. I'll give you a hint:

What 80's band had the hit album "You can tune a piano, but you can't tuna fish?". If you can remember their name (or able to Google), then you are halfway there.

I will explain in my next post.

My best,

LFM

Well, for a lot less than you bought the stock at, that's for sure.

In an expected conference call that should be happening about right now, JP is supposed to outline the details of the deal to the media.

So, what you have is this: A company that not too long ago was considered a viable, liquid institution with a stock valued at around 46 dollars a share, is currently valued at a truly depressing $1.69, will be sold on the cheap to the current savior of Wall Street, none other than JP Morgan

The most enraging thing to me, and I'm sure to most of us regular Joes who are aware of it, is the fact that Kerry Killinger, the CEO that piloted this Titanic, will a receive a minimum of 17.7 million dollars for his effort on the way out the door.

Here's a list of some other generous severance packages for the Leaders of failed enterprises:

http://sanantonio.bizjournals.com/louisville/stories/2008/09/22/daily33.html

Read it and try not to weep.

My best,
LFM

If you live in Lake Forest Park, you are lucky enough to have two Beach Clubs to choose from.

That is, if you live in the right neighborhood. Where you live in LFP determines which Beach Club you have deeded rights to, and if you don't live in one of the desired areas, then you're going to have to head South to Magnuson Park for the public beach.

The Sheridan Beach club is probably the more exclusive of the two. It boasts not only a sandy beachfront and sailing activities, but a pool as well. Though our summers can be short, there is nothing like a day on Lake Washington in the summertime.

Deeded Area

Mark Jaeger, in charge of memberships at the club was kind enough to send me this map of the deeded area where you must live in order to become a member. There are also associate memberships, and I would recommend contacting them through the website to get more info.

I haven't had any luck getting a map of the area for the Civic Club, so when I do, I will be sure to post it.

My best,

LFM