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Held Accountable

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CATAPILLAR

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This morning on the TV they were showing a hearing of accountablity for the sub prime disaster. I didn't catch all of it but they were interigating the head of AIG or it might have been Leimans as to how this MESS of repackaging loans was encoraged and they had employees of these firms that had gone to the government and told them this was going on and no one listened.

I personally feel that the Feds can throw as much money at the markets as they like BUT until bigwigs are held accountable for their actions I feel it will happen again.They go on holidays costing $350,000 they pay themselves severance packages worth millions. The trust and confidence has gone from the market. Why shouldn't CEO's be jailed for their crimes just like a rogue trader wpold be. I feel the US needs to show the rest of the globe that they are stopping this from happening again, lessons aren't being learnt didn't the Great Depression start there too.
Lost trust
CATAPILLAR
 
I’d love to see salary cap and $200,000 pa sounds reasonable.
Nobody has to have 8 billion dollars in 10 years.

Masters of the scam should go to jail and all their property should be confiscated, and no funny deals with gifts to wives and hastily divorces.
 
I saw that, there were office girls were trying to knock back loans but were over ridden, This is no different to Amway, the Tulips scam or South Sea Island only thing its bigger and affects more people.
I agree confidence is the key not money give the CEO's a fair trail and shot "em.
Then see how many more will want a 6K Shower curtain in their Boat.
Suppose when a Motel owner can set up Enron any thing is possible in USSA
 
I hesitate to say this, but as a young man, I took the view that if there was great inequity in wealth distribution, that situation could very easily lead to the disenfranchised ( young men ), taking matters into their own hands.

Over the thousands of years human psychology has hardly changed.

Examine how the Greek city states conducted their affairs.

Consider the Indonesian concept of running "amok"

Think Nazi Germany

Radovan Karadzic is a trained psychiatrist.

In USA, social conditions are more difficult and inequitable than Australia for example.

I am leaving aside altogether Islamic concepts of wealth distribution and Justice.

If things get very sour, I would not especially wish to be a holder of conspicous wealth....think modern day Columbia
 
Tighten accounting rules, and give shareholders more power over executive pay!
 
yes!!

those held accountable should be more than jailed...

they should be hanged, drawned and quartered like the olden days

http://en.wikipedia.org/wiki/Hanged,_drawn_and_quartered


 
Hate to be the one to take a contrarian view here ... but ...

I've worked in criminal justice for a long time. Yes, the people responsible for this mess need to be held accountable (although there's too many to count), but if you want to get to the bottom of the matter and find out where other hidden bombs are quietly ticking away in the basement in time to prevent them from blowing up, you can't have too much fear hanging over the heads of the guilty parties.

A middle ground has to be found: accountability vs. transparency. It will have to be on a case-by-case basis. Severe errors in judgment require administrative sanction. Outright fraud requires having the book thrown at the miscreants.
 
"In a letter to congressmen, Timothy Geithner also said $165m (£116m) would be taken from $30bn the firm is due to get as part of its government bail-out.

He then confirmed that the bonus payments would be deducted from the next instalment of AIG's $180bn bail-out package."http://news.bbc.co.uk/2/hi/business/7949729.stm

First, the $165million will be taken out of the $30Billion being given to AIG....
Then it states the $165million will be deducted from the $180billion bail-out package (to the company).....

I'm in the wrong industry....
 
Perhaps I'm missing something, but I don't really see how this is going to penalise or redress the bonus payments already paid to executives of AIG.

Also, I think the government now owns about 80% of the company so that adds a further anomaly. Mr Geithner's announcement smacks more of ''seeming to be doing something' than any genuine remedy for the moral outrage.
 
Jikx said:
Tighten accounting rules
Click to expand...
I can't understand the point of this to be honest. Overly complex accounting standards waste resources as companies spend rediculous amounts of time and money preparing disclosures nobody understands, reads or cares about - AASB 7 for example.

Also, it encourages businesses to fundamentally change their business methods or structure of transactions to achieve a favourable accounting outcome (as opposed to a real world outcome).

Further complexity in accounting standards must suffer from diminishing returns.
 
Fleeta said:
What do you mean by tighten accounting rules??
Click to expand...


I suppose you misunderstand what I mean by "tightening" accounting rules. It is exactly as you said, to represent a more "real world" outcome. Part of the problem with the subprime debacle was simple because what was stated in the accounts was not accurate!

You have stated exactly why accounting rules should be adjusted, because there is too much manipulation, too many judgement calls regarding valuations and suspect inclusions. When financial instruments become so complex that if because almost impossible to distinguish what is real or make believe, you have to ask the question - should it even be included in accounts? By tightening the rules, it provides a disincentive to to attempt to manufacture profit and boost performance payouts.

I read AASB 7 because it provides greater insight into the nature of what's on the balance sheet (and what's not). It's all about the impact of risk and in this economic environment it makes for a more informed reading. But no, it's not perfect.

On another note, companies do not spend rediculous amounts of money on disclosures because they are the rules used when creating the accounts. It also forces them to actually think and disclose them, making themselves liable for any problems. Back on AASB 7, any company worth their salt would do a AASB 7 style internal analysis anyway. If they don't, I fear their management team is very sub-par and would question investing in them.
 
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