I want names. I want addresses. I want restitution!
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12/23/08
TMQ Asks Again -- Why Isn't This Considered Embezzlement?
From this week's TMQ: http://sports.espn.go.com/espn/page2/story?page=easterbrook/081223#absurd
TMQ Asks Again -- Why Isn't This Considered Embezzlement? Last week, Louise Story of The New York Times reported that Merrill Lynch top executives awarded themselvesbetween $5 billion and $6 billion in bonuses in 2006, based on claims of spectacular gains in mortgage-based securities. This year, it turned out the claims were false: Merrill declared a $19.2 billion loss on mortgage paper, and the 2006 results were "written down" (declared worthless). Merrill was sold at a distress price to Bank of America, and shareholders were clobbered in the transaction. Yet Merrill executives kept the bonuses. As stock prices have tumbled, many financial companies have admitted to cooked books, declared big losses and taken huge write-downs. Charles Prince, who was recently shown the door as CEO of Citigroup, paid himself $110 million in bonuses for five years as CEO, and upon departure, received an exit package worth $68 million which included such absurd perks as a car and driver for life. Owing to bad management moves by Prince, Citigroup's share price fell 60 percent during his tenure, costing stockholders $64 billion in lost value, yet Prince got to keep the bonuses. Angelo Mozilo, the CEO of Countrywide Financial, which melted down as a result of its sale of gimmick loans, paid himself $410 million over the past eight years, plus many perks such as private jet travel for his wife. In the year before Countrywide was also acquired at a distress price by Bank of America, the company's stock plunged almost 85 percent, costing stockholders about $20 billion in lost value -- yet Mozilo got to keep the bonuses.
Very high pay to Wall Street managers is justified on the grounds that they are financial geniuses with astonishing expertise. Instead it turns out many financial industry managers made basic blunder after basic blunder. The 2008 financial markets crash belies the entire premise of Wall Street -- that the people there deserve huge paychecks for incredible skill in finance. Any fool can make money in a rising market by borrowing! But if the rise stops and you're leveraged, you hit the wall. This is the short version of how many Wall Street and hedge fund managers appeared to be "financial geniuses" from 2003 to 2006, then ended up destroying their investors. The financial manager with true expertise knows to avoid bubbles, especially bubbles based on borrowing. Many Wall Street and big-bank managers during the housing bubble were taking wild risks or performing no due diligence -- and when the risks blew up, they got to keep their bonuses while investors and stockholders got hosed. At this point, it's totally obvious the system is rigged -- lie about returns (or take crazy risks), claim a spectacular year, award yourself a vast bonus. When the scandal hits, so what? You keep the bonuses. TMQ's basic question: Why isn't this considered embezzlement, punishable by law? Financial managers have a fiduciary responsibility to act in their investors' interest. When financial managers instead act against their investors' interest in order to line their own pockets, that isn't just cynical -- that sounds like a crime.
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AP Photo/Diane Bondareff
"Our senior executives are counting their bonuses and can't see you now. Your money can't see you now, either."
Note 1: In case you're wondering, I hold no grudge against Wall Street since I've had no problems -- years ago I took my own advice and kept my money far away from highly paid financial managers claiming to possess incredible insider expertise. Note 2: Here, Robert Chew describeshow he lost his life savings by entrusting the money to Bernard Madoff. Why did he do it? Chew had some rich relatives who invested with Madoff, and whispered about how Madoff had a super-secret investing formula. Tuesday Morning Quarterback repeats: There are no secret investing formulas! If there were, Goldman Sachs (which still exists) would immediately buy them.
12/18/08
Introducing Lil' Squirt Tees
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Tax Write Off - Blue & Green What's the best part of having kids? The love? No, they're a Tax Writeoff! |
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That's How I Roll Funny and Cute That's How I Roll with carriage t-shirt perfect for your baby or toddler! |
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I Like Mommy Better - Pink & Orange This cute I Like Mommy Better t-shirt is perfect for mommy's little boy or girl. |
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Ring Bearer Your ring bearer will look adorable in this Ring Bearer tee-shirt. Great gift for the ring bearer at your wedding! |
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Argyle This wonderful argyle design will look great in your child's nursery or bedroom. Available in Pink, Blue & Green, and Green & Yellow |
12/16/08
Millions for AIG Executives, Not One Cent for Autoworkers
Another great TMQ article this week - here's one of my favorite passages:
from: http://sports.espn.go.com/espn/page2/story?page=easterbrook/081216
Millions for AIG Executives, Not One Cent for Autoworkers: Congress signed off on a $700 billion financial-markets bailout without even knowing how the money would be used. Yet Congress has argued and argued about $14 billion to keep the Big Three automakers in business. Why was the huge number approved easily while the smaller number is resisted? Because the smaller number can be understood! Few people in Congress comprehend what AIG does or what credit-swap derivatives are, so when these subjects come up, eyes glaze over. (It might be that the people who run the financial sector are bluffing and don't understand what they are doing either, but that's another matter.) In contrast, everyone drives a car, has opinions about cars, and has opinions about $50-an-hour wages. Plus, the political ramifications of an auto bailout are much more clear than of a financial bailout. Thus the small number gets more attention than the large number -- classic government misplaced priorities.
Last week in the Senate, it was clear Republicans wanted to shaft the United Auto Workers because the UAW almost always backs Democrats. It was clear, too, that Republicans who think it's fine for upper-crust males in suits to receive millions of dollars for sitting at a Wall Street desk and producing nothing were offended by the notion that factory workers who make tangible products people need should receive $50 an hour in wages and benefits. What's offensive is that all labor does not pay $50 an hour! If all labor paid $50 an hour, poverty would end.
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AP Photo/Carlos Osorio
Their role is important, but why should people who earn less be taxed to exempt them from the laws of economics?
For its part, the UAW could not have acted more arrogant. Union leadership wants typical Americans who earn less than $50 an hour taxed so that most UAW members give up nothing. Around the country, employees are accepting fewer hours or benefits to keep their companies going until the recession ends -- but not the UAW; it demands federally subsidized exemption from the laws of economics! The UAW talks as if it's still 1966, the Big Three has dominant market share and unlimited money, and it's just a matter of demand and management gives in. Plus low-quality assembly-line work is one of the reasons Detroit got into its present mess. Non-UAW autoworkers in Toyota and Honda plants in the United States, who earn roughly the same $50 an hour in wages and benefits, build great-quality cars that make their firms successful. The UAW won't take responsibility for its share of the Detroit decline; with UAW leadership it's always "we're victims, we're not responsible." Nobody, it seems, caused the decline of Detroit. Blame space aliens!
Meanwhile, Congress is shocked to learn that the executive pay limits in the Wall Street and banking-industry bailout package are toothless. Who's to blame? Congress. It was the members of Congress who voted for a bailout package whose executive pay "limits" were unenforceable, plainly intended solely as a PR exercise. Yet Congress did nothing. Now it turns out AIG is paying top executives up to $4 million each in taxpayer money as "retention bonuses," justified on the transparently fake claim that otherwise they will jump to other lucrative offers. The financial industry just experienced widespread layoffs, there are no other lucrative offers! But what is Congress doing? Nothing! Not even rushing to amend the legislation to prevent further abuses. Congress is in the situation Congress likes best: Members of the House and Senate can complain nonstop while taking no responsibility for anything and wasting large amounts of other people's money.
12/10/08
12/9/08
Stop Subsidizing the Well-Off
Stop Subsidizing the Well-Off: Now that the presidential campaign is over, it's time to ask a question about John McCain: Since he and his wife earn more than $6 million per year, why does McCain take $82,000 annually in federal pensions? (John and Cindy's financial disclosures can still be found here.) McCain earned the pensions, but clearly does not need them. Every pension dollar he pockets is passed on to our children as debt, or subtracted from resources that could be spent on the needy or for rebuilding the country. McCain could have his pensions canceled, or simply tear up the checks. Instead, federal taxpayers, with a median household income of $49,000, give McCain $82,000 a year he does not need. The Arizona senator is hardly the only person drawing subsidized pensions he or she doesn't need. Many billions of dollars per year in Social Security, military and government-employee pensions go to people who already have hefty incomes. The country has just borrowed insane amounts of money to fix the financial meltdown. Little fairies will not come in the night to replace that money. The national debt must be paid down somehow. Want an across-the-board tax increase? A much smaller defense budget? Drastic Medicare cuts? Social Security retirement age raised to 75? There's only one place where the federal government could take a big step in the direction of fiscal responsibility without causing any suffering or harm -- eliminating Social Security, military and government-employee pension payments to the well-off. Senator McCain: How about setting a good example by tearing up those checks?
12/8/08
Semi Precious Weapons - Magnetic Baby
New York's Semi Precious Weapons' frontman Justin Tranter was on MTV's Made yesterday appearing as the coach of a girl who wants to become a rockstar. If you don't know about this band yet, you should. Check out their new video to Magnetic Baby below.
12/4/08
Santa's Gmail Inbox
This is hysterical. I especially love the revised naughty list with Plaxico and the email from Oprah. Click the image to view a larger version.
12/3/08
I Want a New TV - A Short Film By Crazy Carl
Crazy Carl:
It's a very short film. Its a film with like a guy is in a living room, watching a small tv. with his wife/girlfriend and he says to his wife (and keeps saying to his wife/fiancee over and over) "when are we getting a new tv?"
"a bigger, nice, really expensive tv"
"and you know you have to spend 2 months salary on the new TV. You have to. Its Custom and Tradition"
"I won't except a cheap tv thats only $1000 or $2000 either. Thats not even an option"
"i'm not going to stay in this relationship forever if you don't save the money to buy a new tv."
"i'm getting older, i can't wait forever for a bigger tv."
"stop wasting your money on things that aren't a new bigger tv"
"all my friends have new tv's"
hmmmmmm I think Crazy Carl's talking about something else here and not a TV.
Dead Confederate - "Start Me Laughing"
New insanely awesome video from Dead Confederate - "Start Me Laughing"
And in case you never saw their first video which is also amazing - "The Rat"
12/2/08
Arrested Development : Bluth vs Bush - Another Crazy Carl Post
Did you notice all the parallels between the Bluth Family and the Bush Family?
Bush Family: 3 sons 1 daughter
Bluth Family: 3 sons 1 daughter
Bush Family: Weird usage of Acronyms for names: JEB (John Ellis) Bluth
Bluth Family: Weird Usage of Acronyms for names: GOB (George Oscar) Bluth
Bush Family: Filthy Rich, yet aloof and uncaring and self absorbed.
Bluth Family: Filthy Rich, yet aloof and uncaring and self absorbed.
George HW Bush (41st President): Friendly with Saddam until he fell out of favor with Americans
George Bluth: Friendly with Saddam until he fell out of favor with Americans
Barbara Bush: Openly racist, hatred towards minorities and uncaring towards people suffering
Lucille Bluth: Openly racist, hatred towards minorities and uncaring towards people suffering
George W. Bush: failed businessman and moocher off his parents and name until his 40's
GOB Bluth: failed magician and moocher off his parents and name into his 30's.
Unfortunately, Arrested development lasted a little over 2 years, and the Bush dyansty has lasted like 40 years. I agree this show was cancelled way too early, especially considering its brilliance. However, TV execs are generally morons. Take a look at how long the Honeymooners lasted, for example.
If anyone can think of any other parallels between the Bushes and the Bluths, let me know.
-Crazy Carl Himself
STEVE HOLT!!!!!!!!!!!!!!!!!
12/1/08
Japan Airline's CEO Slashes his Pay Below the Pay of Pilots, other CEO Should Learn from Him !
This actually makes me sick. I just can't understand why CEO's here in the United States can't foll0w this example.
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