Greedy Banker John Thain Who Used a Toilet on Legs Resigns

MSNBC: Former Merrill Lynch chief executive John Thain will resign from Bank of America, effective immediately.

Earlier, Bank of America’s shares fell sharply after a report that executives are meeting to discuss Thain’s future with the company.

A report on CNBC followed news that Merrill, which was about to report a $15.45 billion fourth-quarter loss, decided to move up its year-end bonuses, doling out cash just days before it was officially acquired by Bank of America on Jan. 1.
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CNBC has also learned that Thain spent $1.22 million redesigning his office — including $35,115 for a "commode on legs" — when he became CEO of Merrill Lynch a year ago. Thain also paid his driver $230,000 for one years work, which included the driver's $85,000 salary and bonus of $18,000, and another $128,000 in over-time pay, documents show. Drivers of top executives are often paid about half that amount.

Such expenses would have followed $12.2 billion of net losses at Merrill in the second half of 2007 as writedowns on mortgages and other toxic debt began to mount. Thain became chief executive in December 2007.

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It Was a Bad Bad Day for the U.S.

I avoided watching the news in one sitting, until now. Wow.
Americans ought to be outraged. This financial meltdown all stems from greedy business making risky loans with no oversight. What does that say about our leadership?
How could anyone even glance McCain's way? Just yesterday, his adviser wrote in the Washington Post that everything is fine and dandy. I have a feeling it's a lot worse than anyone's letting on. Not to be a Debbie Downer. Just a hunch.
Somehow, I just can't bring myself to ache for the people making six figures who are now losing their jobs. Join the club.
Which bank is next?
And Galveston Texas? Decimated. What crazy times.
In case you missed the banking woes, here's the rundown.
Here's more.
The folks or folk at electoral-vote have a good explainer:

electoral-vote:For people who don't understand what is going on, here is the story in a nutshell. Decades ago, when you wanted to buy a house you went to local bank and applied for a mortgage. If the mortgage was less than three times your annual income and you had a good credit history, the bank would loan you the money and you would pay them interest and some principal every month for 30 years. Then Wall St. got a bright idea: buy up all the mortgages from the banks, collect a few thousand into a pool called a CDO (Collateralized Debt Obligation) and sell shares in it. The owner of each share would get a pro-rata share of the incoming monthly mortgage payments, analogous to what a bond owner gets.

What happened? It sounded like a great idea and soon all mortgages were sold and repackaged into shares. It didn't take long before the banks realized that they could issue mortgages of five, six, even eight times the buyer's annual income or sell them to people with terrible credit histories. After all, the shaky mortgages would soon be somebody else's headache. That's what happened. Lehman, Merrill, and others bought billions of dollars of mortgages that the homeowners had no hope of ever repaying on schedule and nobody wanted to buy shares in these worthless CDOs, so the brokers got stuck holding the bag with billions in worthless loans.

What are the political consequences of this meltdown? It is a bit early, but here's the expected pattern. Republicans will say that bankruptcies, however unfortunate, are an absolutely essential part of free markets. When managers make stupid decisions, the market punishes them by driving them into bankruptcy. This warns other managers not to be so greedy. Democrats will say that millions of innocent homeowners and small investors are going to lose their homes and life savings due to misbehavior on the part of rapacious and unscrupulous bankers and that it is the job of the government to regulate the entire financial sector to protect ordinary people who don't know the difference between a CD and a CDO.