Updated from 12:03 a.m. EDT
Steel's MeltdownSteel yourself, Bob, you've made the Wall of Shame. Just a scant two weeks ago, with his stock trading at $10.71, Wachovia ( WB) CEO Robert Steel told Mad Money host Jim Cramer, "We have a great future as an independent company." Today, Wells Fargo ( WFC) announced it is buying Wachovia Bank for $7 a share, trumping a deal announced Monday with Citigroup ( C) that valued Wachovia at $1 a share. Congratulations for getting a better price -- but what was that you were saying about independence, Bob? Maybe Steel just didn't know what he was talking about back when he appeared on Cramer's show (how scary is that?). After all, he just joined Wachovia in July -- barely enough time to find the executive washroom, let alone the extent of its troubled loan portfolio. But come on. Steel was no new-guy wallflower. And he was not at all hesitant about publicly trumpeting his firm's "very exciting prospects" on Mad Money. Steel should've known better about blabbing too much in public. After all, he spent two years as undersecretary in charge of domestic finance at the Treasury Department and almost 30 years at Goldman Sachs ( GS), rising to vice chairman. It's safe to say that Steel will be making few public appearances about that debacle. And he may never get invited back to appear on Mad Money again, but he'll be there in spirit every night on the CEO Wall of Shame. Dumb-o-meter score: 100 -- Steel wasn't a real CEO. He was just playing one on TV.
Fishman Reels It InShed no tears for Alan Fishman, the CEO of failed Washington Mutual. He's yukking it up, as a matter of fact. How many people have a chance at pocketing $19.1 million in pay after just 17 days on the job? Of course, it was an eventful few weeks in the Fishman regime. WaMu, which has $188 billion in deposits, was seized by government regulators last week and its branch offices and assets were sold to JPMorgan Chase ( JPM) in the largest bank failure in U.S. history. WaMu brought in Fishman on Sept. 8 and gave him a $7.5 million signing bonus to replace acquisition-happy ex-CEO Kerry Killinger. And despite his short tenure, he gets another $11.6 million in cash as severance, according to compensation consultant James F. Reda and Associates. So all told, he earned about $47,000 an hour for his short stint at WaMu. For what, exactly? It's not like Fishman deserves credit for the sale of the company -- government regulators brokered the deal with banking overlord JPMorgan CEO Jamie Dimon after customers yanked more than $17 billion in deposits, rendering the bank unsound. Of course, Fishman could step up and reject the mammoth payout ($1.12 million a day, if you're keeping score), just as Robert Willumstad refused a $22 million package for his three months at AIG. But if you do take the money, Alan, good luck finding a safe bank to stash it. Dumb-o-meter score: 95 -- Hard to blame a guy for winning the lottery.
TPG's WaMu Boo-BooSo much for David Bonderman's sweet deal. The so-called "smart money" is among the dumb losers in the wake of Washington Mutual's demise. TPG, the private-equity specialist founded by billionaire Bonderman, waved goodbye to $1.3 billion worth of Wamu shares when regulators seized the struggling bank and handed the keys to JPMorgan Chase late last week. "Obviously, we are dissatisfied with the loss,'' said a TPG spokesman, who went on to blame the losses on "unprecedented turmoil in global financial markets" and a "macro crisis of confidence." So it's a confidence game, huh? We hate to nit-pick, but TPG was obviously brimming with confidence back in April when it gobbled up millions of WaMu shares at $8.75 apiece, a 33% discount to the stock price at the time. And from what we can remember, there was significant "turmoil" back then, too. In fact, WaMu was raising capital at the time because it admitted to more than $3 billion of home-mortgage writedowns and loan losses. TPG, which oversees $50 billion in assets, was so secure in its WaMu bet that they broke the golden rule of private equity: Don't invest without control -- not that there's anything left to control anyway. Dumb-o-rama score: 80 -- Sometimes, Dave, things are marked down for a reason.
Senate ShenanigansThe House couldn't close the deal, so the Senate is bringing home the bacon. The Senate got piggy with it Wednesday night, larding up the $700 billion bailout in order to muster a winning majority. Senators were spurred to action after the House of Representatives failed Monday to approve a plan, which so riled the markets that the Dow dropped 777 points. Note to House Speaker Nancy Pelosi: Next time, don't vote on a Wall Street plan during market hours. Don't call a vote if you don't have enough support from your own party to win. And certainly don't skimp on the swine! Check out how the Senate spreads the pork: Wooden arrows from Oregon, rum from Puerto Rico and movies from Hollywood are all cleaning up on tax breaks. Also in on the action, Harley Davidson ( HOG) and Nascar track builders. All in, the tax provisions will add about $112 billion to budget deficits over the next five years, according to the Congressional Budget Office. So maybe it shouldn't be called a $700 billion plan any more. Said Senator Judd Gregg, Republican from New Hampshire, about the tense, bipartisan talks surrounding the bill, "This is the way government's supposed to work, folks, and it did." Says you, senator. Dumb-o-rama score: 75 -- This bill may pass, but it sure ain't kosher.