Wall Street memory
No room for noble virtue
Greed over honor
No room for noble virtue
Greed over honor
Showing posts with label greed. Show all posts
Showing posts with label greed. Show all posts
Monday, May 25, 2015
Friday, February 27, 2015
Sunday, September 28, 2014
The Limerick of Finance for 09/28/14
Minsky moment approaching with speed
Investors have failed to take heed
Some pending margin call
Could trigger the fall
So many will pay for their greed
Investors have failed to take heed
Some pending margin call
Could trigger the fall
So many will pay for their greed
Saturday, April 05, 2014
Ethical Half-Lives In Finance
The few conversations I've had with people younger than me who aspired to finance careers always covered personal integrity. I could not ignore this subject because it is the ultimate litmus test of whether someone belongs in a large corporation. I use the term "belong" in a somewhat pejorative sense, as you'll see below.
I worked for three very large financial sector firms at various points in my career. They all publicly held themselves out as putting the client's interests ahead of their own. I observed their employees honoring this commitment more as an exception to general practices behind the corporate veil. It is possible to make a decent living by genuinely caring for a client, meeting their expectations, and charging them reasonable fees. Managers in large corporations often discount that objective by pushing their revenue producers (brokers, advisors, traders, loan officers, etc.) to make their department's growth numbers look good. That's how managers get promoted.
The competition for promotions in finance is fierce and unforgiving. A fast and loose approach to ethics is an easy ticket to the big time. It is very difficult to have a long career in a large organization without resorting to unethical behavior. The outsized rewards in finance tempt normal people to stray over to the dark side. The ones who cross over often enough will never look back, and never realize where they went wrong. Those rare people who climb ladders ethically and build business honestly deserve respect. The rest of these people are clawing, grasping, vicious vipers who masquerade as humans to deceive clients. They "belong" in a large corporation in the same sense that criminals belong in prison. Society must keep its sociopathic predators under positive control.
I care more about my personal integrity than my career. I performed very poorly when I worked in large financial institutions because I told the truth, followed rules, and executed my duties correctly. My supervisors marked me for elimination after observing my behavior. I wasn't fit for employment in their eyes because I would not lie or manipulate people. I stand out as an oddball and I couldn't care less. I dislike unethical people as much as they dislike me.
The half-lives of financial careers may be longest in corporate finance because incidences of temptation occur least frequently there. It's always possible to falsify payment invoices but internal auditors can catch those instantly, especially if they're tied to the enterprise's supply chain. There may very well be plenty of honest CFOs and treasurers around, and maybe this is why so many of them are sitting on piles of corporate cash rather than investing in overpriced assets.
Career half-lives are probably shortest in the financial sector's customer-facing roles. I specifically envision retail brokerage, institutional sales, and investment banking rainmakers as the career paths that winnow out honest people very quickly. The pressures to meet performance goals and earn bonuses are largest in those fields. Opportunities to deceive investors appear daily. The biggest liars and laziest trust fund babies win the retail production games.
Anyone who considers a career in finance should think very hard about the choice they will face soon after they begin work. Personal integrity and career success in a large enterprise become mutually exclusive at some point during upward career progression. Employees will choose one path over another. Choosing personal integrity usually leads to unemployment. Choosing career success usually means making ethical compromises. Those compromises come with severe legal risks that cannot stay buried forever in an era of pervasive surveillance. Having both integrity and success is possible with self-employment. I have extended my career's half-life by working for myself.
I worked for three very large financial sector firms at various points in my career. They all publicly held themselves out as putting the client's interests ahead of their own. I observed their employees honoring this commitment more as an exception to general practices behind the corporate veil. It is possible to make a decent living by genuinely caring for a client, meeting their expectations, and charging them reasonable fees. Managers in large corporations often discount that objective by pushing their revenue producers (brokers, advisors, traders, loan officers, etc.) to make their department's growth numbers look good. That's how managers get promoted.
The competition for promotions in finance is fierce and unforgiving. A fast and loose approach to ethics is an easy ticket to the big time. It is very difficult to have a long career in a large organization without resorting to unethical behavior. The outsized rewards in finance tempt normal people to stray over to the dark side. The ones who cross over often enough will never look back, and never realize where they went wrong. Those rare people who climb ladders ethically and build business honestly deserve respect. The rest of these people are clawing, grasping, vicious vipers who masquerade as humans to deceive clients. They "belong" in a large corporation in the same sense that criminals belong in prison. Society must keep its sociopathic predators under positive control.
I care more about my personal integrity than my career. I performed very poorly when I worked in large financial institutions because I told the truth, followed rules, and executed my duties correctly. My supervisors marked me for elimination after observing my behavior. I wasn't fit for employment in their eyes because I would not lie or manipulate people. I stand out as an oddball and I couldn't care less. I dislike unethical people as much as they dislike me.
The half-lives of financial careers may be longest in corporate finance because incidences of temptation occur least frequently there. It's always possible to falsify payment invoices but internal auditors can catch those instantly, especially if they're tied to the enterprise's supply chain. There may very well be plenty of honest CFOs and treasurers around, and maybe this is why so many of them are sitting on piles of corporate cash rather than investing in overpriced assets.
Career half-lives are probably shortest in the financial sector's customer-facing roles. I specifically envision retail brokerage, institutional sales, and investment banking rainmakers as the career paths that winnow out honest people very quickly. The pressures to meet performance goals and earn bonuses are largest in those fields. Opportunities to deceive investors appear daily. The biggest liars and laziest trust fund babies win the retail production games.
Anyone who considers a career in finance should think very hard about the choice they will face soon after they begin work. Personal integrity and career success in a large enterprise become mutually exclusive at some point during upward career progression. Employees will choose one path over another. Choosing personal integrity usually leads to unemployment. Choosing career success usually means making ethical compromises. Those compromises come with severe legal risks that cannot stay buried forever in an era of pervasive surveillance. Having both integrity and success is possible with self-employment. I have extended my career's half-life by working for myself.
Sunday, November 03, 2013
Helping Little Old Ladies Isn't My Calling In Life
I was on my way to lunch yesterday prior to the start of a conference on China's financial reform. I passed by a very elderly woman being helped by a not-so-elderly man. She was stooped over and moving very slowly, even for an old lady. I asked the guy if she was alright, and he said yes. Then he had the nerve to ask me if I could help him walk her down the street. I said no thanks, as I was only concerned about whether she needed medical attention.
This little episode made me think briefly about my duties to my fellow human beings. I am willing to go out of my way in emergencies to save human life in extremis, but I do not owe a duty of permanent care to random strangers. Unfortunately, our entitlement-laden culture has become so enamored with passing the buck of personal responsibility that the elderly are now at their apogee of greed and selfishness. Medicare isn't an insurance program, it's a transfer of wealth from current workers to current retirees. Many of the Boobus Americanus genus don't understand that fact. They want someone else to pay their bills for medical care. The dude on the street helping his grandma or whatever the heck she was wanted me to do his job for him. He can stick it where the sun doesn't shine.
My alarm bells go off when I see someone struggling or in obvious physical pain. If the person's caregiver tells me they're okay from a medical standpoint, my concern ends and I resume my life. People who think I assume an additional burden of care by making a random inquiry need to get their entitled heads out of their hindquarters. Yes, little old ladies and their able-bodied guardians, I'm talking about you. I don't owe you precious time out of my personal schedule to do things your caregivers find inconvenient. Helping you walk down the street isn't my calling in life nor is it my personal responsibility. My lunch, my conference, my career, my money, and my life are more important than your caregiver's inability to do their job.
This little episode made me think briefly about my duties to my fellow human beings. I am willing to go out of my way in emergencies to save human life in extremis, but I do not owe a duty of permanent care to random strangers. Unfortunately, our entitlement-laden culture has become so enamored with passing the buck of personal responsibility that the elderly are now at their apogee of greed and selfishness. Medicare isn't an insurance program, it's a transfer of wealth from current workers to current retirees. Many of the Boobus Americanus genus don't understand that fact. They want someone else to pay their bills for medical care. The dude on the street helping his grandma or whatever the heck she was wanted me to do his job for him. He can stick it where the sun doesn't shine.
My alarm bells go off when I see someone struggling or in obvious physical pain. If the person's caregiver tells me they're okay from a medical standpoint, my concern ends and I resume my life. People who think I assume an additional burden of care by making a random inquiry need to get their entitled heads out of their hindquarters. Yes, little old ladies and their able-bodied guardians, I'm talking about you. I don't owe you precious time out of my personal schedule to do things your caregivers find inconvenient. Helping you walk down the street isn't my calling in life nor is it my personal responsibility. My lunch, my conference, my career, my money, and my life are more important than your caregiver's inability to do their job.
Sunday, October 20, 2013
Arrest Striking BART Workers, Indict BART Unions, Replace with Symphony Losers
I am sick and tired of stupid losers ruining the Bay Area's economy. BART's unionized pea-brain workers have shut down the region's train system for the second time this year. They demanded pay increases that exceed the CPI, pension plan contributions lower than what the rest of us pay into social Security, and health insurance premiums lower than what subsidized low-income earners would pay under the ACA exchanges. I am totally disgusted with the arrogance of semi-literate button pushers and ticket takers who believe they are indispensable. They are no such thing. They are instead leeches and parasites who hold productive citizens hostage. This demands a legal remedy. Our elected leaders are too cowardly to do anything other than run their mouths. I have a much more robust action plan in mind.
BART management should petition the federal court system to issue a back-to-work order. If the striking union idiots refuse the order, management should immediately terminate them for insubordination. Terminated employees lose the right to loiter on their employers' property, so BART management should have their police arrest any union slobs still picketing at BART stations. Management should continue their campaign for justice by turning over all of the negotiation materials they received from the union reps to federal prosecutors. I believe a case exists under the RICO Act to indict, convict, and shutter all of the BART employee unions that have obstructed productive negotiations and sought extortionate concessions from BART. I'm pretty sure the NLRB would be cool with this action. Remember that a "racket" is a fraudulent solution to a nonexistent problem. Demanding high pay for low-value labor IMHO constitutes a racket. Remember also that BART is a publicly-chartered institution and is supported by both ridership revenues and tax revenues. Every work stoppage that delays scheduled maintenance puts the taxpayer on the hook for costs that rider revenues can't cover while trains aren't running.
This mass termination and prosecution would demand a new workforce. I have the perfect candidates in mind. The San Francisco Symphony losers in AFM Musicians Union Local Six went on strike earlier this year and were forced to back down when they realized they had zero public support and no realistic chance of obtaining their demands. The stupidity they exhibited makes them perfect candidates for employees in public transit. Union musicians can presumably follow simple instructions and show up on time, which is all that is required of menial labor. Since classical musicians are so upset with what are already extremely high compensation levels, they should jump at the chance to pocket some extra coin during daylight hours from a real job. They might even gain some appreciation for the livelihoods of people who work for a living. Read my outstanding analysis of the San Francisco Symphony union losers from March 2013 to discover how much they need to learn.
Replacing BART workers with classical musicians will not help the system's long-term performance but it will at least take lots of snobs down a few pegs in both groups. These stinking union bottom-feeders have no idea how good they have it, and how little they deserve for what they do.
BART management should petition the federal court system to issue a back-to-work order. If the striking union idiots refuse the order, management should immediately terminate them for insubordination. Terminated employees lose the right to loiter on their employers' property, so BART management should have their police arrest any union slobs still picketing at BART stations. Management should continue their campaign for justice by turning over all of the negotiation materials they received from the union reps to federal prosecutors. I believe a case exists under the RICO Act to indict, convict, and shutter all of the BART employee unions that have obstructed productive negotiations and sought extortionate concessions from BART. I'm pretty sure the NLRB would be cool with this action. Remember that a "racket" is a fraudulent solution to a nonexistent problem. Demanding high pay for low-value labor IMHO constitutes a racket. Remember also that BART is a publicly-chartered institution and is supported by both ridership revenues and tax revenues. Every work stoppage that delays scheduled maintenance puts the taxpayer on the hook for costs that rider revenues can't cover while trains aren't running.
This mass termination and prosecution would demand a new workforce. I have the perfect candidates in mind. The San Francisco Symphony losers in AFM Musicians Union Local Six went on strike earlier this year and were forced to back down when they realized they had zero public support and no realistic chance of obtaining their demands. The stupidity they exhibited makes them perfect candidates for employees in public transit. Union musicians can presumably follow simple instructions and show up on time, which is all that is required of menial labor. Since classical musicians are so upset with what are already extremely high compensation levels, they should jump at the chance to pocket some extra coin during daylight hours from a real job. They might even gain some appreciation for the livelihoods of people who work for a living. Read my outstanding analysis of the San Francisco Symphony union losers from March 2013 to discover how much they need to learn.
Replacing BART workers with classical musicians will not help the system's long-term performance but it will at least take lots of snobs down a few pegs in both groups. These stinking union bottom-feeders have no idea how good they have it, and how little they deserve for what they do.
Wednesday, March 20, 2013
Fire All Striking San Francisco Symphony Musicians
The unionized musicians of the San Francisco Symphony have gone on strike over compensation. They claim they should be paid as much as other big-city musicians and have declared a work stoppage until they get what they demand. This shuts down many of the in-house performances scheduled for Davies Symphony Hall and jeopardizes the performances of visiting artists who expect at least partial accompaniment from the Symphony. It also forced cancellation of the Symphony's tour of the East Coast, including a performance at Carnegie Hall. I was under the impression that every true artist in the world aspired to play at Carnegie Hall. A pianist who happens to share my surname once played there as a child prodigy.
The reputation of one of the world's greatest performing arts ensembles is at risk because these union thugs in tuxedos are unsatisfied with a base salary of $141,700. That is far above the San Francisco median household income of $72,947. Consider that the median national income from that same Census source is $61,632; San Francisco's median is thus 18.36% higher. It follows that a fair comparison for symphony musicians is not to the base salaries of other symphonies held hostage by collective bargaining but to nationwide statistics for musicians. The BLS reports that the nationwide hourly mean wage for musicians and singers in performing arts companies (NAICS 711100) is $34.85. The annualized equivalent, assuming a 40-hour workweek and 52 work weeks per year would be $72,488. I will allow that employment terms offer vacation time, overtime, sick days, health benefits, and other adjustments to total compensation but a gross figure is useful in comparative analysis. Let's apply the San Francisco premium I calculated above as 18.36% to this national figure, admitting some methodological imperfection because it is from a median set of figures and I'm applying it to a mean set of figures. This premium gives us an adjusted annual income of $85,797. Check my math if you'd like and I'll correct any errors.
Making over $85K per year to do something a talented high school musician can do for free is pretty generous. Simple statistics tells us that's pretty much all a professional musician in San Francisco deserves. Anything higher is a sum the market cannot bear for long without a return to a lower equilibrium through fewer ticket sales and lower ticket prices. Music promoters and non-marquee acts figure that out pretty quickly because they operate in a free market. San Francisco Symphony's unionized extortionists are unable to figure it out because their greed blinds them to market realities. The Symphony's Board has a much better grasp on reality because it includes business professionals who must make a profit in the real world outside of collective bargaining. The Board must close a four-year old operating deficit or there will be no future at all for this Symphony. Math is a harsh mistress.
If the Symphony needs a scab player for the triangle or tambourine to help break the strike, then I volunteer to perform for free. I've had no musical education at all but those instruments don't look that difficult. I am even willing to solo "O Mio Babbino Caro" on a kazoo if Renee Fleming can't elbow her way through the union's picket line. I'm pretty sure I could pick up the tempo if someone in the Davies front office would hum a few bars.
The greed of the Symphony's professional musicians is disgusting. I would like to see the SF Symphony's Board of Governors and renowned music director immediately terminate the employment of every single one of the Symphony's striking musicians. Replace them with the numerous musicians who compete for the small number of open spots in the company when they are available Musicians who fancy themselves irreplaceable remind me of the federal air traffic controllers who were justifiably fired in 1981 when they arrogantly broke federal law. The nation thanked President Reagan and even the leadership of the Soviet Union was impressed. San Francisco is in dire need of such bold, decisive action.
The SF Symphony can do without the greed of Musicians Union Local 6 corrupting its performing artists. Performing classical works in one of the greatest cities in the world is an honor and privilege that countless musicians dream of having. The spoiled union brats on strike for exorbitant pay no longer deserve such an honor. Their selfish action denies music to fans and brings shame to The City.
Addendum 03/22/13: I shall state for the record that I am not in any way speaking on behalf of any party to this labor dispute. No one involved in this dispute induced me to make this statement. I do not stand to gain anything at all from any resolution of this dispute. I speak only for myself in my capacity as a music fan exercising my First Amendment right to freedom of speech.
The reputation of one of the world's greatest performing arts ensembles is at risk because these union thugs in tuxedos are unsatisfied with a base salary of $141,700. That is far above the San Francisco median household income of $72,947. Consider that the median national income from that same Census source is $61,632; San Francisco's median is thus 18.36% higher. It follows that a fair comparison for symphony musicians is not to the base salaries of other symphonies held hostage by collective bargaining but to nationwide statistics for musicians. The BLS reports that the nationwide hourly mean wage for musicians and singers in performing arts companies (NAICS 711100) is $34.85. The annualized equivalent, assuming a 40-hour workweek and 52 work weeks per year would be $72,488. I will allow that employment terms offer vacation time, overtime, sick days, health benefits, and other adjustments to total compensation but a gross figure is useful in comparative analysis. Let's apply the San Francisco premium I calculated above as 18.36% to this national figure, admitting some methodological imperfection because it is from a median set of figures and I'm applying it to a mean set of figures. This premium gives us an adjusted annual income of $85,797. Check my math if you'd like and I'll correct any errors.
Making over $85K per year to do something a talented high school musician can do for free is pretty generous. Simple statistics tells us that's pretty much all a professional musician in San Francisco deserves. Anything higher is a sum the market cannot bear for long without a return to a lower equilibrium through fewer ticket sales and lower ticket prices. Music promoters and non-marquee acts figure that out pretty quickly because they operate in a free market. San Francisco Symphony's unionized extortionists are unable to figure it out because their greed blinds them to market realities. The Symphony's Board has a much better grasp on reality because it includes business professionals who must make a profit in the real world outside of collective bargaining. The Board must close a four-year old operating deficit or there will be no future at all for this Symphony. Math is a harsh mistress.
If the Symphony needs a scab player for the triangle or tambourine to help break the strike, then I volunteer to perform for free. I've had no musical education at all but those instruments don't look that difficult. I am even willing to solo "O Mio Babbino Caro" on a kazoo if Renee Fleming can't elbow her way through the union's picket line. I'm pretty sure I could pick up the tempo if someone in the Davies front office would hum a few bars.
The greed of the Symphony's professional musicians is disgusting. I would like to see the SF Symphony's Board of Governors and renowned music director immediately terminate the employment of every single one of the Symphony's striking musicians. Replace them with the numerous musicians who compete for the small number of open spots in the company when they are available Musicians who fancy themselves irreplaceable remind me of the federal air traffic controllers who were justifiably fired in 1981 when they arrogantly broke federal law. The nation thanked President Reagan and even the leadership of the Soviet Union was impressed. San Francisco is in dire need of such bold, decisive action.
The SF Symphony can do without the greed of Musicians Union Local 6 corrupting its performing artists. Performing classical works in one of the greatest cities in the world is an honor and privilege that countless musicians dream of having. The spoiled union brats on strike for exorbitant pay no longer deserve such an honor. Their selfish action denies music to fans and brings shame to The City.
Addendum 03/22/13: I shall state for the record that I am not in any way speaking on behalf of any party to this labor dispute. No one involved in this dispute induced me to make this statement. I do not stand to gain anything at all from any resolution of this dispute. I speak only for myself in my capacity as a music fan exercising my First Amendment right to freedom of speech.
Saturday, March 16, 2013
Alliance for Retired Americans Declares War on Mathematics
I recently stumbled across one of the most unproductive, brain-dead organizations you've never heard of until now. The Alliance for Retired Americans is a lobbying group focused on delivering as much of America's productive wealth to greedy senior citizens as possible. Yes, folks, that's really what they're doing and I'm not pulling any punches.
Check out their FAQ to see a great example of economic illiteracy:
In other words, they want the federal government's unfunded entitlement programs to be paid in full forever. Their crucial "Issues" include preventing any cuts to benefits (with no mention of how future benefits will be funded), support for the Affordable Care Act's mandatory care and free checkups (again, with no clue how to pay for them), joy that legislators cannot find a compromise to reduce the federal budget deficit (with no understanding that deficit spending imperils the nation's credit rating and currency), and other points that ignore the math of the real world.
The morons who promote this Alliance need to read the Bowles-Simpson Commission's final report, which lays out the math. The Alliance rejects outright some common sense reforms like using chained CPI for inflation-indexed programs and increasing the retirement age for Social Security recipients. This group feeds the image of greedy geezers ripping off young savers and Alan Simpson himself blasted them for their ignorance.
My own recent encounter with two local activists from the California group Sen. Bowles excoriated (a.k.a. CARA) was the trigger for this blog article. One activist spoke at a breakfast meeting I attended and made the following points (recapitulated from memory, as her talk was not recorded). My comments are in italics.
"A big portion of the cost of health care is profit for the service providers. I wish we didn't have to have that, because then we could afford more services." Idiot, the profit motive is what incentivizes those providers to offer those services. Take away the profit and you'll have no services at all.
"The rich need to pay their fair share in taxes." Dummy, read this excellent explanation of how impossibly high taxes would have to rise to meet the funding shortfalls reported by the trustees of the Social Security system.
The speaker's breakfast companion, an able-bodied but overweight older woman, was too lazy to get her own breakfast plate. I spoke up in the Q&A after the talk to personally insult the speaker and I was shouted down for being rude. You're gall-dang right I was rude and I'll do it again if I get the chance. These CARA takers abhor makers. Her speech was the most intellectually dishonest and financially illiterate talk I've ever had the displeasure of hearing at a breakfast meeting.
The Alliance for Retired Americans is a union-sponsored monstrosity. Its advocacy of fiscal irresponsibility ought to bring shame to its advocates but that is too much to expect given the gross stupidity in every statement on its website. They ignore the data available from the government's own financial statements on the inevitable insolvency of entitlement programs because their union supporters are a greedy, lazy, and stupid pack of liars. Unfortunately, they speak for a large number of citizens. That is why no entitlement reform will ever come from deliberate action in national policy. The global bond market's revolt will be very painful for these idiots when it destroys the real value of their monthly benefit checks.
Check out their FAQ to see a great example of economic illiteracy:
We are opposed to any form of privatizing Social Security and Medicare. The Alliance is also fighting any new tax breaks for the wealthy at the expense of programs that help seniors. We are also opposed to raising the retirement age.
In other words, they want the federal government's unfunded entitlement programs to be paid in full forever. Their crucial "Issues" include preventing any cuts to benefits (with no mention of how future benefits will be funded), support for the Affordable Care Act's mandatory care and free checkups (again, with no clue how to pay for them), joy that legislators cannot find a compromise to reduce the federal budget deficit (with no understanding that deficit spending imperils the nation's credit rating and currency), and other points that ignore the math of the real world.
The morons who promote this Alliance need to read the Bowles-Simpson Commission's final report, which lays out the math. The Alliance rejects outright some common sense reforms like using chained CPI for inflation-indexed programs and increasing the retirement age for Social Security recipients. This group feeds the image of greedy geezers ripping off young savers and Alan Simpson himself blasted them for their ignorance.
My own recent encounter with two local activists from the California group Sen. Bowles excoriated (a.k.a. CARA) was the trigger for this blog article. One activist spoke at a breakfast meeting I attended and made the following points (recapitulated from memory, as her talk was not recorded). My comments are in italics.
"A big portion of the cost of health care is profit for the service providers. I wish we didn't have to have that, because then we could afford more services." Idiot, the profit motive is what incentivizes those providers to offer those services. Take away the profit and you'll have no services at all.
"The rich need to pay their fair share in taxes." Dummy, read this excellent explanation of how impossibly high taxes would have to rise to meet the funding shortfalls reported by the trustees of the Social Security system.
The speaker's breakfast companion, an able-bodied but overweight older woman, was too lazy to get her own breakfast plate. I spoke up in the Q&A after the talk to personally insult the speaker and I was shouted down for being rude. You're gall-dang right I was rude and I'll do it again if I get the chance. These CARA takers abhor makers. Her speech was the most intellectually dishonest and financially illiterate talk I've ever had the displeasure of hearing at a breakfast meeting.
The Alliance for Retired Americans is a union-sponsored monstrosity. Its advocacy of fiscal irresponsibility ought to bring shame to its advocates but that is too much to expect given the gross stupidity in every statement on its website. They ignore the data available from the government's own financial statements on the inevitable insolvency of entitlement programs because their union supporters are a greedy, lazy, and stupid pack of liars. Unfortunately, they speak for a large number of citizens. That is why no entitlement reform will ever come from deliberate action in national policy. The global bond market's revolt will be very painful for these idiots when it destroys the real value of their monthly benefit checks.
Thursday, January 31, 2013
Wednesday, May 23, 2012
Monday, May 14, 2012
Tuesday, March 27, 2012
Wall Street Misses Point Of Survey Dissatisfaction
Wall Street knows it has an image problem. Its own communication executives acknowledge this in a survey of their attitudes. Take a look at the most sensitive issue for them - compensation - to see what they fear losing the most. Note further that the solution they draw from the survey is something like "more communication" rather than a fundamental change in predatory behavior.
Better PR isn't going to mollify an investing public that no longer believes the equity markets are fair to investors. Wall Street has pushed its advantage in asymmetric information so far that the people on the other side of its trades don't want to play anymore. No one is going to believe a news release stating "Wall Street wants to try harder" after an avalanche of stories on how Wall Street has picked investors' pockets. No investor is going to trust Wall Street until senior executives who commit fraud - especially those at MF Global - are prosecuted.
Here's a good analogy. A senior U.S. military official once remarked that the key to convincing Afghans that the U.S. is on their side is to "worry a lot less about how to communicate our actions and much more about what our actions communicate." Wall Street should worry less about how to spin its behavior during the 2008 financial crisis than about what it should do to remove anti-client conflicts of interest.
Better PR isn't going to mollify an investing public that no longer believes the equity markets are fair to investors. Wall Street has pushed its advantage in asymmetric information so far that the people on the other side of its trades don't want to play anymore. No one is going to believe a news release stating "Wall Street wants to try harder" after an avalanche of stories on how Wall Street has picked investors' pockets. No investor is going to trust Wall Street until senior executives who commit fraud - especially those at MF Global - are prosecuted.
Here's a good analogy. A senior U.S. military official once remarked that the key to convincing Afghans that the U.S. is on their side is to "worry a lot less about how to communicate our actions and much more about what our actions communicate." Wall Street should worry less about how to spin its behavior during the 2008 financial crisis than about what it should do to remove anti-client conflicts of interest.
Saturday, April 02, 2011
Goldman Sachs CEO Makes $14 Million More Than You
What financial services CEOs do to "earn" their ginormous compensation packages is beyond the comprehension of mere mortals. Only those who already live on mount Olympus can truly understand the lives of fellow Olympians. The CEO of Goldman Sachs, for example, is no garden variety globetrotter. This titan absolutely must make at least eight figures per year, with much more waiting for him in deferred compensation, or else he won't be motivated to do whatever it is that he does.
It takes a great deal of focus, stamina, and business acumen to keep those proprietary hedge funds churning their books several trillion times per day. That can be exhausting just to watch, so imagine how tuckered out it makes the poor CEO who has to engineer the whole thing. One can only marvel at the superhuman abilities of CEOs who manage to squeeze billion-dollar deals in between golf rounds and martinis.
Here's a personal note to Goldman's board. I'll do the same amount of work for one-tenth what it's costing you to pay the current guy to run around Davos and Jackson Hole. Feel free to fire me after a year if I can't deliver the exact same results. You know where to reach me.
It takes a great deal of focus, stamina, and business acumen to keep those proprietary hedge funds churning their books several trillion times per day. That can be exhausting just to watch, so imagine how tuckered out it makes the poor CEO who has to engineer the whole thing. One can only marvel at the superhuman abilities of CEOs who manage to squeeze billion-dollar deals in between golf rounds and martinis.
Here's a personal note to Goldman's board. I'll do the same amount of work for one-tenth what it's costing you to pay the current guy to run around Davos and Jackson Hole. Feel free to fire me after a year if I can't deliver the exact same results. You know where to reach me.
Thursday, March 24, 2011
YRCW Teamsters' Pension Benefits Cut By Older Teamsters
When a ship is sinking, the crew can either band together to save it or crowd into whatever lifeboats remain. In the case of YRCW, it looks like senior Teamsters had their lifeboats prepared well in advance at the expense of their younger brethren. The Central States Pension Fund is cutting benefits available to YRCW employees. It's worth noting that not all Teamsters will share the pain. Younger retirees are the ones seeing their pensions capped, while older retirees will still reap full benefits. Younger pension plan beneficiaries are thus subsidizing the full benefits of their older counterparts while paying the exact same dues for union membership.
Teamsters under the age of 55 need to think long and hard about the representation they're getting. Why pay union dues if all you get for this privilege is to see older union workers take your pension? There's a good topic for discussion at the next all-hands meeting.
Teamsters under the age of 55 need to think long and hard about the representation they're getting. Why pay union dues if all you get for this privilege is to see older union workers take your pension? There's a good topic for discussion at the next all-hands meeting.
Tuesday, March 15, 2011
Teamsters Ready To Pull Trigger On YRCW Pension Default
Poor YRC Worldwide. They just can't catch a break lately. First their CFO quits, and now their unions demand interest payments that will immediately trigger the bankruptcy of the company if enacted. The company's other creditors won't put up with these games forever. No one has unlimited patience when dealing with unions, but now that Teamsters are getting YRCW board representation they will have the opportunity to test the limits of such patience.
YRCW's survival is now clearly in the hands of its Teamsters. If they are selfish enough to demand a higher interest rate on their deferred pension contributions, the company will fail and they will get little or nothing.
Teamsters, think hard about what you're about to do to yourselves. Think very, very carefully about the imminent consequences of your greed and inability to think long-term. The survival of your employer depends entirely on whether you're not collectively stupid enough to demand something you have no hope of receiving.
Full disclosure: No position in YRCW at all. Ever.
YRCW's survival is now clearly in the hands of its Teamsters. If they are selfish enough to demand a higher interest rate on their deferred pension contributions, the company will fail and they will get little or nothing.
Teamsters, think hard about what you're about to do to yourselves. Think very, very carefully about the imminent consequences of your greed and inability to think long-term. The survival of your employer depends entirely on whether you're not collectively stupid enough to demand something you have no hope of receiving.
Full disclosure: No position in YRCW at all. Ever.
Thursday, February 17, 2011
Day Of Greed In Wisconsin From Unions
Arab street protests have given the world a "Day of Rage" on several different days. Now some misguided Americans are making this concept their own to protest the imminent destruction of their union benefits. The state of Wisconsin is doing the right thing by moving to curtail state employee unions' collective bargaining rights. The state has even thrown the unions a bone by promising no layoffs in exchange for higher employee contributions to their own pension and health care benefits. In other words, the state asks its employees to accept the same lifestyle deal faced by the private sector taxpayers who pay their salaries.
On the plus side, passage of this fiscally responsible legislation will make credit analysts look more favorably upon the state of Wisconsin's finances. The state's muni bonds will look more secure and taxpayers will save on interest costs. On the minus side, unionized teachers and other employees show how clueless they can be when sufficiently roused.
Unions are responding to this common sense legislation with their typical childishness, greed, and arrogance. This goes to show that union leaders just aren't intelligent enough to grasp economic concepts. These protesters may be even more dense than the Teamsters at YRC Worldwide, which I didn't think was possible until I read the stories coming out of Wisconsin today.
Wake up, unions. Your time is almost up. Do your members a favor by breaking the news to them that the days of generous benefits and job security for low-skill occupations are rapidly drawing to a close.
Full disclosure: No position in YRCW or Wisconsin muni bonds.
On the plus side, passage of this fiscally responsible legislation will make credit analysts look more favorably upon the state of Wisconsin's finances. The state's muni bonds will look more secure and taxpayers will save on interest costs. On the minus side, unionized teachers and other employees show how clueless they can be when sufficiently roused.
Unions are responding to this common sense legislation with their typical childishness, greed, and arrogance. This goes to show that union leaders just aren't intelligent enough to grasp economic concepts. These protesters may be even more dense than the Teamsters at YRC Worldwide, which I didn't think was possible until I read the stories coming out of Wisconsin today.
Wake up, unions. Your time is almost up. Do your members a favor by breaking the news to them that the days of generous benefits and job security for low-skill occupations are rapidly drawing to a close.
Full disclosure: No position in YRCW or Wisconsin muni bonds.
Friday, September 24, 2010
Wednesday, July 07, 2010
Illinois' Greedy Unions Get Raises That Break Taxpayers
Just when I thought unions couldn't hit a new low for rapacity (good luck getting a union ignoramus to understand that word), they manage to sink even lower. Illinois state taxpayers are about to pay a lot more for even less union work:
This is criminal! Illinois is facing a budget deficit of about $11B for FY2011 and shiftless union slobs get a $500mm raise? It's not like they need 7% more dough to make it through deflationary times. I guess all those school teachers and prison guards are so hung up on sugar rushes from three daily servings of doughnuts in the break room that they feel the extra 7% is the baseline they need to fill their orders at the corner doughnut shop. Disgusting!
What is it with unions and their greed these days? Can anyone wearing the union label see past the fat wallets protruding from their fat behinds, or are they all dumb enough to think that economically productive taxpayers will take this outrageous behavior indefinitely? Union jerks won't voluntarily sacrifice for the public good because after years of getting their way unchallenged they think they are the public good!
Government employee unions are playing with fire. It's time for state attorneys general to open racketeering cases against government unions that get salary step-ups thanks to their campaign contributions. It's time for governors to do to their union dregs what Reagan did when air traffic controllers got out of hand: FIRE THEM ALL.
Full disclosure: No exposure to Illinois muni bonds.
More than 40,000 unionized state workers got a pay raise last Thursday, bringing to 7 percent the amount they're gotten since last year. These same state employees are in line for another 7 percent by next July 1, all at a cost of a half-billion tax dollars a year.
It's more than the virtually bankrupt state can afford, and some Republican lawmakers say the raises need to be rolled back.
This is criminal! Illinois is facing a budget deficit of about $11B for FY2011 and shiftless union slobs get a $500mm raise? It's not like they need 7% more dough to make it through deflationary times. I guess all those school teachers and prison guards are so hung up on sugar rushes from three daily servings of doughnuts in the break room that they feel the extra 7% is the baseline they need to fill their orders at the corner doughnut shop. Disgusting!
What is it with unions and their greed these days? Can anyone wearing the union label see past the fat wallets protruding from their fat behinds, or are they all dumb enough to think that economically productive taxpayers will take this outrageous behavior indefinitely? Union jerks won't voluntarily sacrifice for the public good because after years of getting their way unchallenged they think they are the public good!
Government employee unions are playing with fire. It's time for state attorneys general to open racketeering cases against government unions that get salary step-ups thanks to their campaign contributions. It's time for governors to do to their union dregs what Reagan did when air traffic controllers got out of hand: FIRE THEM ALL.
Full disclosure: No exposure to Illinois muni bonds.
Tuesday, July 06, 2010
Unions Turn Up Pressure On Weakened YRCW
I've written recently about my disgust for organized labor in the United States. I briefly thought that union truck drivers were capable of doing the right thing when they agreed to wage givebacks at YRCW. I had set my hopes too high. The Teamsters can't wait to get their greedy paws on YRCW's cash and are willing to place that company's cash flow at risk:
I don't care whether they're only looking for a partial resumption of payments. Once that camel's nose gets under the tent, they won't hesitate to bite the whole burrito and demand full resumption even if it destroys the company. Someone should tell the Teamsters that YRCW isn't remotely close to being out of the woods yet. The sale of YRCW's logistics unit won't raise nearly as much cash as expected due to termination costs. Good luck trying to tell uneducated union schmucks to look at numbers. We can look at YRCW's own short-term estimates for confirmation that their situation is still tenuous:
Using EBITDA is a bit of an optimistic stretch, as many analysts learned to their chagrin during the dot-com era. More bad news may be on the way for truckers if they have to compete against rapidly-strengthening railroads. Railroads kept up their capital spending while truckers like YRCW were forced to sell assets. Wanna bet who's going to win that race in the short term? That's especially noteworthy if the short term is all YRCW has to make itself profitable but union workers just can't think that far ahead.
Hey, what's this about unions getting a say in picking a board member? If YRCW's shareholders are dumb enough to let unions get a say in board leadership then maybe they deserve to see their share price drop to zero. Union pick Dr. Ghilarducci (who taught at my undergrad alma mater, Notre Dame) is an advocate for replacing self-directed retirement accounts with government-guaranteed annuities. I have no problem with government-mandated savings programs (like Australia's superannuation accounts or Uncle Sam's Thrift Savings Plan) so long as they truly operate as investment management programs. The problem with Dr. Ghilarducci's reform program - and others that rely on government-directed investments - is that they can too easily become permanent deficit funding mechanisms. Try living on that guaranteed "3% above inflation" when the government controls the measurement of inflation and the schedule for indexing your inflation-tracking portfolios. I'll bet union workers think that's just great.
Trying to explain any of this to a typical union member is probably a waste of intellectual energy. Thankfully, ports in SoCal remain open despite greedy striking secretarial pools, so we should be grateful that unions don't always get to bully the rest of us around. The day of the union is long past. Executives in unionized firms need to get tough and push these dinosaurs out to pasture.
I avoid investing in unionized companies because they have a hard time doing what they need to do - cut costs, discipline unproductive employees, shut down unprofitable business units - thanks to union interference. It's time to break up unions before they break the United States economy with their greed and stupidity.
The Teamsters union is aiming to get YRC Worldwide to resume some pension contributions starting in January 2011, union officials said Tuesday.
(snip)
The $5.3 billion trucking operator won an 18-month suspension of pension contributions from the Teamsters last August, along with a 15 percent wage cut.
I don't care whether they're only looking for a partial resumption of payments. Once that camel's nose gets under the tent, they won't hesitate to bite the whole burrito and demand full resumption even if it destroys the company. Someone should tell the Teamsters that YRCW isn't remotely close to being out of the woods yet. The sale of YRCW's logistics unit won't raise nearly as much cash as expected due to termination costs. Good luck trying to tell uneducated union schmucks to look at numbers. We can look at YRCW's own short-term estimates for confirmation that their situation is still tenuous:
YRC Worldwide still believes it will "generate positive adjusted EBITDA" in the second quarter, the company said June 29, as it concluded its annual stockholder meeting.
(snip)
At its annual stockholder meeting June 29, the company replaced outgoing director Carl W. Vogt with Teresa Ghilarducci, the Teamster pick for YRC's board of directors.
Using EBITDA is a bit of an optimistic stretch, as many analysts learned to their chagrin during the dot-com era. More bad news may be on the way for truckers if they have to compete against rapidly-strengthening railroads. Railroads kept up their capital spending while truckers like YRCW were forced to sell assets. Wanna bet who's going to win that race in the short term? That's especially noteworthy if the short term is all YRCW has to make itself profitable but union workers just can't think that far ahead.
Hey, what's this about unions getting a say in picking a board member? If YRCW's shareholders are dumb enough to let unions get a say in board leadership then maybe they deserve to see their share price drop to zero. Union pick Dr. Ghilarducci (who taught at my undergrad alma mater, Notre Dame) is an advocate for replacing self-directed retirement accounts with government-guaranteed annuities. I have no problem with government-mandated savings programs (like Australia's superannuation accounts or Uncle Sam's Thrift Savings Plan) so long as they truly operate as investment management programs. The problem with Dr. Ghilarducci's reform program - and others that rely on government-directed investments - is that they can too easily become permanent deficit funding mechanisms. Try living on that guaranteed "3% above inflation" when the government controls the measurement of inflation and the schedule for indexing your inflation-tracking portfolios. I'll bet union workers think that's just great.
Trying to explain any of this to a typical union member is probably a waste of intellectual energy. Thankfully, ports in SoCal remain open despite greedy striking secretarial pools, so we should be grateful that unions don't always get to bully the rest of us around. The day of the union is long past. Executives in unionized firms need to get tough and push these dinosaurs out to pasture.
I avoid investing in unionized companies because they have a hard time doing what they need to do - cut costs, discipline unproductive employees, shut down unprofitable business units - thanks to union interference. It's time to break up unions before they break the United States economy with their greed and stupidity.
Tuesday, June 29, 2010
The Haiku of Finance for 06/29/10
Lazy union slob
Want to make some more money?
Quit whining and WORK!
Want to make some more money?
Quit whining and WORK!
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