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AIG Gives New Meaning to F*ck You Money

Wed, 8 Oct 2008 19:06:50 -0400

It is especially hard for the outrage of a Congress tainted by its aiding and abetting what Warren Buffett called an economic Pearl Harbor (not an apt analogy since we did it to ourselves) to be credible. It must come from the electorate and CEOs with the right values.

Outrage about what? About the self-absorbed rationalizing of those in charge at AIG, Lehman and others. AIG’s partying and indulging in expensive luxuries just after receiving a bailout from their own mismanagement of risk gives new meaning to F*ck You Money – it used to mean having the wherewithal to protect yourself against abusive employers.

Now it means treating the taxpayers’ money and the shareholders’ money as your own, really your own and telling them nothing is your fault.

Cramer vs. Cramer

Tue, 7 Oct 2008 17:43:57 -0400

Jim Cramer has been famous for his stock market analysis and his schtick of frenzy (shouting, sound effects and subtext of we-can-all-make-a-pile in the stock market.). His publicity has been nothing short of genius. Something else is short.
Yesterday, with the Dow down to 9900 or so, it was New Cramer vs. Old Cramer as the current version advised us to sell what remains of our holdings and lock in our losses (if we need any the money in the net 5 years). He added: it could go down another 20%.

Where was Cramer in August of 2007 when the CEOs I coach were feeling the beginnings of the recession and the Dow was at 12,455? Or in July or August 2008 when a lot of smart money reduced equity holdings to a minimum and the Dow was 13, 378 and 11,543 respectively?

Now is a great time to add to the panic.

The Public Dis(Trust)

Tue, 7 Oct 2008 11:52:01 -0400

For at least the past eight years, the public trust has been broken by every type of institution. Economic recovery depends not only on economic fundamentals but a change in leadership and leadership values in Washington and elsewhere.

Last Valentine’s Day, February 14, my post using Wachovia’s marketing tag line was a warning: “Are You With Wachovia? Then You May Be In Danger.” Wachovia was doing a profitable business with telemarketers known to defraud bank customers. Internal emails appeared to confirm Wachovia’s knowledge of and addiction to the source of the profits. Who was looking out for the customers?

So if you are surprised that Wachovia stiffed Citi when Wells Fargo made a better offer (and it is better in that it avoids draining more taxpayer funds and keeps Wachovia in tact) you are just not paying attention.

And if you thought that Richard Fuld, former chairman of Lehman brothers, would cop to doing anything wrong (for example, in paying bonuses to fleeing executives as their firm sought government cash), you must be in the 15% of the populace that thinks the economy is strong and George Bush has done a great job. Could we defend his assertion? Were the bonuses contractually guaranteed? Were they performance bonuses based on responsible management and actual accomplishments or phony profits? What made them “appropriate” as Fuld called them. He didn’t say. Who was looking out for the customers and investors?

And when the SEC allowed hedge funds bosses private audiences with SEC higher ups to complain about front-line auditors, when the FDA and Consumer Product Safety agencies failed to protect us from adverse impacts including death, when the Congress could not police its own ethics let alone keep the lobbyists for Fannie and Freddie and others in bounds, who was exercising the fiduciary trust of the public? And I have not yet touched on the war and the Defense Department.

And in case you have a short memory, it is only a few months since we learned our Federal oil regulators whose salaries we pay partied with sex and drugs funded by the companies they regulate.

Don’t blame it on free markets, either. Our markets have not really been free – free of undue, self-serving influences and subsidies that inhibit real competition intended to benefit the public.

There have always been insider dealing, other forms of corruption and a lack of wise oversight. But this is one of those periodic times when it is so egregious that the trust – and the system – breaks down.

And you now know that it affects everyone.

So, make sure you vote in presidential elections and congressional elections and do so for whoever is most likely to restore trust by doing the right thing.

Act In Your Own Interest

Tue, 7 Oct 2008 11:12:52 -0400

If you are a regular visitor to this site, then you know that you can count on the posts and archives for free tools you can use in your daily life, insights into leaders and inside stories about leadership behavior.

I am about to invest in a complete overhaul of the site to make it easier to use, more fun to use as well as enable it to connect to a library of CEO videos and facilitate comments from a community of like-minded people.

It will be much more worthwhile for you if you will provide timely comments on the posts and the tools. It will be much more worthwhile if you tell your friends about this site. If you like what you see, tell your friends. If you are having trouble using the site or dont like what you see or disagree with it or have something to add, tell me. Please.

Only with such comments and community can I afford to add the next dimensions. And it is in your own interest.