Perry Glasser

Archive for November, 2008|Monthly archive page

Dollars$ Buccaneer Award: Robert Rubin, Citigroup, Inc.

In Business, Wall Street on November 29, 2008 at 10:25 am

buccaneerTHE FACTS

  • Robert Rubin is the CEO of Citigroup, Inc. at one time the largest bank and financial services institution in the world, capitalized at $255 billion.Citigroup is now worth $20 billion.
  • CEO Rubin has been an appointed Weasel, as Secretary of the Treasury and once worked for Goldman Sachs.
  • Rubin has no operational responsibilities at Citigroup. In labor unions, this is called a sweetheart, no-show job. People go to jail for this.
  • Rubin has pulled down $115 million in pay since he started at Citigroup.
  • Citigroup’s shares are down 70% since Rubin joined the company; 86% from its all time highs. He is quoted as saying, “I have been very involved.” (WSJ, 11/29)
  • Rubin points out in the same interview that Citigroup’s “decision to increase risk followed a presentation to the board by a consultant.”
  • Citigroup is laying off 75,000 workers out of 375,000 worldwide.
  • Citigroup has received $40 billion in Citizen aid.

THE QUESTION

WTF???

 

People earn $ 10 million per year with no operational responsibility ask a consultant? If they don’t know, and if they have to hire advice-givers, fire their overpaid asses and hire the consultant!!

 

THE CHUTZPAH

Rubin is quoted as saying, “I bet there’s not a single year where I couldn’t have gone somewhere else and made more.” (WSJ 11/29) and,

 

“Maybe there are a few things in the context of the facts we knew then, we should have done differently.” (WSJ 11/29)

 

GEE BOB, YOU THINK??  STRICTLY IN THE CONTEXT OF FACTS, THAT IS.

 

THE AWARD

Stand! Robert Rubin, recipient of the Dollar$ Buccaneer Award, Extraordinaire with Oak Leaf Cluster for Balls of Brass.

 

In ancient Rome, he’d have fallen on his sword. That’s too much to hope for, so let’s ask Bob to avoid having the door hit him in the ass on his way out–and, O, leave that golden parachute so the Citizens paying for your mess don’t finance your place in the Hamptons, your use of the corporate jet, or the your medical benefits for life.

 

 

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INFLATION HISTORY: A PRIMER FOR OBAMA

In Economics, Politics on November 19, 2008 at 2:13 pm

We cannot spend our way out of economic disaster brought on by thieves and liars.
Today in the US, we are making expenditures with little or no hope of return on investment. There is no talk of greater productivity. The US can and should always engage expenditures for the social good—medicine, social security, the “entitlement programs” whose only return is better lives. But when we engage expenditures by printing money with no tax basis for those expenditures, when we expect no ROI (return on investment), we invite ruin.
Most of us have come of age terrorized of inflation. The word is loosely bandied about and in the mouths of many means no more than “rising prices.”

INFLATION

But that’s only partially correct.
In an environment where wages and compensation rise at a pace equal to or greater than the rate of inflation, Citizens gather wealth. Rejoice! Old codgers who recall when an automobile cost roughly $1 per pound may be startling their grandchildren with strange tales of the good old days while gathered in the family manse in Levittown, a building purchased in 1952 for $8,000 now worth $750,000. Prices rise because wages rise when employment is high and skilled labor is expensive. The cost of cars and doughnuts may soar, but over the long term it all levels out, and adjusted for inflation the standard of living rises.
That’s a far different scenario than when a government prints and pumps money into an economy with no change in productivity. Governments inflate their currency by creating money with the stroke of a pen on a ledger, and if they do so to pay for non-productive goods and services, their economies eventually collapse. In a prolonged collapse, the society itself collapses.
Non-productive uses of government monies include debt service and military expenditures.
Dollar$ acknowledges that buying security is a necessary expenditure, but Dollar$ points out that while the military consumes goods and service, it does not create either. There is no economic ROI for military expenditure.
We see nations that spend 100 percent of their GDP on the military—Darfur, Angola, Nigeria—cursed nations where bandits eat and all else starve. These places do not want for natural resources: they have no economic infrastructure that creates ROI.

INFLATION KILLS

In Weimar Germany, when the Depression began, the country could no longer afford the debt service of reparations for World War I. The government printed money. Famously, workers demanded their pay on a daily basis, in cash, the better to run to markets to buy goods that would be far more expensive in a day. No one was working any harder; technology had not spurred innovation for new products or services. The price of bread soared, people were frightened. The government collapsed. Germany turned to a savior, Hitler.
The Soviet Union competed militarily with the United States after World War II in the Cold War. Surrogate hot wars were fought in Korea and Vietnam, but the main event was the ongoing arms race, really an economic tussle. Every military initiative had to be matched, equaled and then excelled by the antagonists. Missile gaps, nuclear warhead gaps, submarine gaps. The world watched two countries create and then maintain the balance of terror. When the Soviet Union’s foreign adventure in Afghanistan met unexpected resistance and the cost of that war soared in human and economic terms, the home population that for so long had done without creature comforts such as denim jeans and good scotch rebelled; the country collapsed into anarchy. Chechnya is in revolt. Putin is reinstating the police state—and in the US we never enjoyed any “peace bonus” because we never let up on our expenditures; our Republican leadership found us wars to fight. If there were no weapons of mass destruction, bomb shepherds to export democracy.

OBAMA’S LESSON

We do NOT need to fund:
• troubled financial firms that only buy less troubled firms to strengthen their balance sheets and then need to fire extraneous works as a matter of “efficiency”;
• troubled financial firms that buy small financial firms so that the acquiring firm qualifies for bailout money, the welfare to the rich;
• the US auto industry’s horrendous mismanagement. Jobs won’t be lost—if Toyota and Honda and Volkswagen gain the market share GM once had, they will have to hire workers to meet the demand. Let’s not save Rick Wagoner’s arrogant, sorry ass;
• two foreign adventures. Though Mr, Obama has pledged to end Georgie’s War on Shepherds in Iraq, our only goal in Afghanistan is to find and kill Bin Laden.
Where the hell is James Bond when we need him?

Buccaneer Award: Rick Wagoner!

In Business on November 11, 2008 at 11:52 am

 

buccaneer1As predicted weeks ago at this blog, General Motors is petitioning for a Weasel-dole. The reasoning is simple: if socializing the financial sector is a good thing, why not manufacturing?

 

It’s an odd kind of socialism the Weasels have brewed, too. In exchange for billions in public money, the American taxpayer gets non-voting equity and guaranteed higher taxes to be paid by the companies receiving bailout money.

 

Yes, Dollar$ knows that the Federal Weasels want to call it “dividends.” Fiver percent now and nine percent later. But Dollar$ is happy to remind readers that when corporate entities or real human beings pay money to the government, that’s called “taxation.”

 

And lest any Citizens reading this are starry-eyed enough to think that corporate taxes are paid by corporations, they need to think again. Corporate taxes are a cost of doing business, and, like the cost of raw goods, labor, and logistics, are passed along to the consumer in the final price for the goods and services.

Make it plain: if we give billions to General Motors, to make the payments, GM will have to raise the price of cars. We pay; they profit.

 

Citizens will note, by the way, that the price-tag of the bailout is already creeping up faster than Wal-Mart underwear. AIG got money; AIG needs more money. There’s a surprise. A few billion here, a few billion there—what the hell is the difference? The current Weasel Team is out by January 20, but the incoming Weasel Team looks even more inclined to hand out our money.

 

Weasels is weasels

 

As it happens, yesterday the Chief Buccaneer and CEO of GM, Rick Wagoner, refused to resign as a condition for GM getting aid. “I think our job is to make sure we have the best management team to run GM. It’s not clear to me what purpose would be served.”

 

No. That was not a joke.

 

Bear in mind, the auto industry is not in dire straits. A slowdown is a slowdown: people are not abandoning cars on the highways. With the price of gasoline going lower, the demand for less-fuel efficient (read: “cheaper’) cars will rise. Toyota and Honda are not on the brink of bankruptcy. They are building roads all over China and that huge market of people newly arriving into the middle-class will want autos. Visionary companies with visionary leadership innovate and strategize–and they somehow sell cars. They negotiate with unions. They will get through bad times; their laid-off employees will be recalled. They will meet their pension and heathcare obligations.

Wagoner would like us to think that GM is a victim of circumstance. The man’s contempt for Citizens is palpable.  His leadership the management team that has brought GM’s stock price to the same level it was at in 1946, and now he wants us to fund his ineptitude, calling himself, “the best.”

 

Those of you who endorse “buy and hold” as an investment strategy may want to contemplate GM’s price level.

 

So!

 

For chutzpah and  contempt, Rick Wagoner STEP FORWARD!