Archive for March, 2009

MOFT: Episode 12 (T.J. Oshie)

Just a few weeks ago, I fell in love with singer Ingrid Michaelson while watching her perform an amazing concert.

After 35 years of living, I had my first celebrity crush.

Well apparently, celebrity crushes come in bunches because I already have another one … and this time, it’s for a man, baby.

I love you, T.J.

I love you, T.J.

That’s right – I now find myself totally jonesing for St. Louis Blues hockey player T.J. Oshie. And I’m not afraid to admit it. This is an enlightened society, right? A movie called ‘I Love You, Man’ is the nation’s number one comedy, after all.

Now I know by merely mentioning hockey, I probably just lost a lot of my regular readers, but if for no other reason than to see a man without any hint of irony or embarrassment express his intense affection for another man,  please stay with me a bit longer so I can explain what’s so amazing about this 22-year-old rookie from the University of North Dakota.

Oshie is without a doubt a very solid technical hockey player. He’s a speedy, agile skater who’s got mad stick skills which he uses often to make defenders look silly. For a player his age, he’s also got an amazing, almost uncanny ability to read the ice and know where to go with the puck. He plays strong on defense and is versatile enough to be used on both the Blues’ power play and penalty kill special team units.

But the real reason Oshie is so special – and why he has become My One Favorite Thing of the week – has nothing to do with his physical talents but is all about the way he plays the game, the size of the kid’s heart.

Oshie’s not a big dude, at least in terms of NHL players, coming in at an official (and from my eyes, generously measured) 6 feet 0 inches and 194 pounds. But he plays like an absolute lion, going 110% every shift, throwing his body around without any regard for his physical well-being.

Every game, Oshie skates with intensity, aggression, and most importantly, infectious joy, and his impact is having a dramatic effect on the entire team as the Blues are on one of the most exciting late-season runs in recent memory.

Dwelling at the bottom of the conference just a few weeks ago, the team is now battling hard to nail down one of the final playoff spots with two weeks left in the season. In January, I predicted that with a core bunch of talented young players (David Backes, David Perron, Andy Mcdonald, Patrick Berglund, Brad Boyes, Roman Polak, Eric Johnson to name a few),  the Blues would soon be a force to be reckoned with, winning the franchise’s first Stanley Cup within five years.

But watching Oshie makes me think that timetable could be moved up considerably. Just look what Oshie has done for the Blues this week alone. Last Thursday night, after sitting out a morning practice skate with some sort of bug, Oshie scored two points with an assist and a highlight-reel goal (shown here) to help the Blues beat the Vancouver Canucks 4-2.

Then in a key back-to-back weekend series with the Columbus Blue Jackets, Oshie showed what a stud he truly is. On Saturday night, after serving a stint in the penalty box, Oshie returned to the action and laid a huge, clean hit on Blue Jackets star Rick Nash, causing a bit of an on-ice ruckus since marquee players don’t usually get hit like that.

The Blues ended up winning that game in an overtime shootout, and it was quite clear that the Blue Jackets wanted some vengeance during the next match, to be played in Columbus in less than 18 hours. But instead, Oshie just doubled down on his ultra-coolness by scoring the first goal of the Sunday game, adding an assist, and most awesomely, doing the following when Rick Nash tried to exact retaliation …

The Blues won Sunday’s game 5-2, moving for now into sole possession of the eighth and final playoff spot.

Yeah, so I now got me a man-crush for T.J. Oshie. That’s OK. I’m cool with it. And it”s not like I’m fawning all over Oshie’s long wavy locks of hair or his baby face and the way his cheeks get all red and pinch-able when he exerts himself.

OK, maybe I should stop now. But T.J., I love you, man. Truly…

Government Debt: The Final Bubble

Could this be the beginning of the end for our markets’ last great bubble?

An auction yesterday of $34 billion in 5-year U.S. government bonds didn’t go over so well, fetching prices well under what analysts were expecting.

Ruh-roh.

Oh I know, it may not seem like that big of a deal. The debt still got sold, unlike an unsuccessful auction for 40-year bonds in the UK. The fact that our auction resulted in yields (which move in the opposite direction of the price of bonds) of 1.849% versus the expected 1.801% seems like rather unimportant, inside-baseball type of stuff.

And if it’s just one bad auction, then it may not be important (Edit: Demand for an auction of $40 billion in two-year U.S. notes Tuesday was quite strong). But if this weak demand is a signal of things to come, then we are in for a world of hurt.

In the past ten years, we have had a dot-com bubble, a housing bubble, a credit bubble and an oil bubble, but I have contended they will all pale in comparison to the government debt bubble we are now experiencing.

Think about it: The U.S. government, despite owing $10 trillion in debt, despite incurring an additional $1.3 trillion deficit in 2008 (a number which will certainly be crushed this year and likely for years to come if the Obama plan even gets partly realized), has been up until now able to sell almost as much of the debt as it wishes to at extremely low interest rates.

The Pollyannas will say that there’s a good reason for the low cost of our debt, and why that situation won’t change anytime soon. The big concern right now is deflation, not inflation. Other countries have at least as many problems as we do, and too much savings to boot. They need to put their money somewhere, and the U.S. markets are still the world’s best, safest place to invest money. They own too much of our debt to start selling now – it would only lead to mutually assured destruction.

“This time it’s different.” To me, there are no four more dangerous words. It defies the laws of economics and of logic to expect that a nation awash in debt with miles and miles of higher and higher deficits on the horizon will be able to lend more money at virtually zero interest for an extended period of time.

The only question is when do the floodgates open? We’ve heard rumblings of complaints – notably, on the record and not anonymous – from Chinese officials about our country’s economic situation and increasingly high levels of debt. We’ve seen budget deficit estimates from the CBO which far exceed the optimistic ones put together by the Obama team. And now we had a disappointing auction.

Of course, to a certain extent, debasing our currency is what the government wants. If we could control the pace of the move, some inflation would be a good thing since we’re so heavily in debt (as the value of the dollar falls, that means debtors owe less in ‘real’ terms). But it is highly likely that the transition would come too fast and too quick for our economy and our policies to adjust without experiencing significant dislocations and subsequent pain.

I can almost guarantee you that if government debt is a bubble and it does pop, you won’t see our foreign lenders gently exiting the market. It will be a stampede.

And what will be the implications of such a scenario? Believe it or not, they are likely far worse than anything we have seen so far. Interest rates will soar, as will inflation. Savers will be crushed. Investment will grind to a halt. An already weak economy on its knees would get weaker. We will be forced to renegotiate our obligations with foreign lenders, most notably the Chinese.

The end result could be no less than the end of U.S. hegemony.

MOFT: Episode 11 (McDonald’s Filet-O-Fish commercial)

Every Tuesday night after my weekly basketball game, I pick up some Mickey D’s for me and Filet O Fish cartonMs. Deadman (or Deadwoman, if you prefer) to eat at home. It’s a classy tradition in the Deadman household, one that we both totally look forward to, with the main source of our enjoyment being the Filet-O-Fish sandwich that always makes up the entree portion of our meals.

Snicker if you must, but we are just huge fans of the Filet-O-Fish, so you can imagine my intense glee when I found out that McDonald’s recently launched a promotion for the sandwich – the pricing apparently varies depending on the location, but two Filet-O-Fish sandwiches for $3 is the going rate at the establishment I frequent (compared to the regular price of $3+ for 1 sandwich).

That steal of a deal would have been normally enough to make the Filet-O-Fish My One Favorite Thing of the week, but whoa, wait just one second … because you see, in order to advertise this particular promotion, McDonald’s created this friggin’ awesome commercial that has this fish on a wall singing a catchy little theme song. It’s a good thing it’s catchy, too, because my best estimate is that the ad airs on average about two million times every day.

Just in case you haven’t seen it, for your viewing enjoyment, here’s the original commercial:

Oh, how Ms. Deadman and I love this commercial. Every time it comes on, we can’t help but join in the singing, and we even started doing our own little dance (well, basically, just a bunch of funky head moves). So we thought we’d demonstrate our appreciation of this marketing masterpiece by crafting our own little homage video and – because we have no shame – sharing it with all of you. (As you can tell from the outtake version below, this was a much more difficult task than I had first imagined).

So congratulations to Mickey D’s, to that little square of processed fish goodness, and of course to whatever creative, daring agency is responsible for this particular commercial – You are the winners of this week’s prestigious My One Favorite Thing award.

And here’s the final, (mostly) error-free version:

The dagbuzz for 3/23/09: The Geithner Bank Stability Plan

Details of the Geithner bank stability plan came out today, and Wall Street for one loved it. And why not,  for the plan basically allows financial institutions to take the worse of the toxic assets rotting away on their balance sheets and pawn off the vast majority of the risks of nonpayment onto the U.S. government (and ultimately the U.S. taxpayer).

I will give credit to Geithner for creativity in crafting the plan given our limited options. Without the use of private money and leverage, we would never be able to afford absorbing all the problematic assets without jeopardizing the health of the U.S. balance sheet and sending our foreign investors fleeing for the exits. And even if we could afford it, Congress would never step up with the money now that the public’s appetite for these Wall Street bailouts has totally disappeared, so Geithner cleverly bypassed that particular concern by giving extraordinary powers to agencies like the Federal Reserve and the FDIC.

It is quite apparent from reading the fact sheet the U.S. Treasury released today regarding the plan (which I encourage everyone to read since it actually provides a concise, rather easy-to-understand summary) that Geithner’s core assumption is that current market prices for these toxic assets are not reflective of their underlying value.

If Geithner is right, and prices of these assets are artificially low, then his plan could very well work. If he’s wrong and, as many experts believe asset prices fall further, then we are throwing good money after bad, and the leverage we are employing will cause even more damage.

Geithner says new plan is best option

Eliot Spitzer: A thoughtful voice of reason (alas, without any power)

In a recent interview with CNN,  former New York Governor Eliot Spitzer gave detailed, thoughtful, reasoned insights into a whole host of recent topics related to our financial crisis, including AIG bonuses, Obama’s performance, the media’s impact, regulation, etc.

I recommend the 20-minute Fareed Zakaria interview in its entirety, but if you only have limited time, Spitzer offers a concise explanation into the cause of our current economic situation for a few minutes starting at about the 10:45 mark (I have attached that portion of the video below.

No matter what you think of his personality (I always thought he seemed like an arrogant, hypocritical jerk) or the personal indiscretions that caused his ultimate demise (to me, it should have been a matter between him and his family and THAT’S ALL), Spitzer unquestionably took a harder, more probing look at Wall Street and its practices than anybody else who was in a position of power during that time. If we had had more Spitzers running around, then perhaps we would have addressed our problems earlier and avoided some of the pain we are experiencing.

Private-public partnership proposal poses plenty of problems

Oh goody. Looks like we’re about to hear the details of Geithner’s long-awaited financial stability plan, which has as one of its key components a public-private investment pool designed to help rid our system of the toxic assets rotting away on bank balance sheets.

Apparently, the Treasury will hire four or five private investment managers to run a fund that will purchase the assets. The government will then match whatever monies the private firms manage to raise and invest.

Sounds simple enough on the surface, but is it just me, or do bad things generally happen when government and the private sector get into bed together?

What often ends up occurring is one of two things:

1) The private companies – because they get all sorts of government breaks and incentives, including in many cases the assumption of losses should really big disaster strike – end up making decisions that do not properly assess risks vs. rewards, resulting in ultimate failure, whereupon the government must become more fully involved anyway. It’s exactly the kind of privatizing profits, socializing losses phenomenon we’ve seen with the current crisis. And it’s the taxpayer who gets screwed.

2) OR, public policy concerns get in the way of maximizing profits, and the government feels like it must step in to protect the interests of the American populace. In this case, the private enterprises get screwed, and are either forced to alter their investment strategy in inefficient ways or watch as their investments or ‘outsized’ gains get confiscated in one manner or another.

We saw both 1 and 2 when it came to the Fannie Mae and Freddie Mac disasters, and watching the AIG fiasco unravel is like watching the same story over and over again.

Though your ideology may affect the way you ultimately view the AIG situation – either management knows the company is too big too fail so they are not spending the taxpayers resources wisely, or the government is being forced by public outrage to get involved in company decisions that would be better left to management – we should clearly have done one of two things: Let the company fail and allow the private markets to work its destructive magic (and risk systemic collapse as its unpaid obligations filter through) or fully take the company over and end this charade that AIG is still a private entity. Anything would likely be better than this half-assed, want-it-both-ways solution we currently are trying.

In most cases, public-private partnerships are just clever ways to try and remove large obligations off the balance sheet of the American government (but merely postpone the costs), and justified under the guise that private industry can do things cheaper and more effectively.

I’m sure there are instances where public-private partnerships have been successful (if you know of any, please let me know in the comment section), but when the goals of the two entities are ultimately so different – one wants to maximize profit, the other wants to address some sort of nonprofit-based public policy goal – it’s no surprise the end result often ends up being a disaster.

Look, I know I’m doing the very thing I’ve been complaining about: Criticizing the new administration without giving its agenda or policies a chance (hell, in this case, I’m criticizing without even seeing the plan!).

Obama & Co. inherited this giant, sticky, complicated financial mess and are trying to be creative about fixing it without making our government go broke. There are no easy answers, and I frankly don’t know what the alternatives are. But the idea that we’re employing the same basic strategy that helped get us into this crisis strikes me as very unwise, to say the least.

The Congress AIG Bonus Bill: Bravo! (Seriously…)

Great. Now there’s a backlash to the backlash to the AIG bonuses, and everyone is scolding Congress for acting so rashly in crafting a bill designed to recover 90% of the bonuses in taxes.

Conservatives are complaining the bill is unconstitutional and unproductive. In his Obama interview, Jay Leno said he’s frightened about its implications, and dagblog.com’s own Genghis is mocking the effort.

Gimme a break.

Don’t get me wrong. I have plenty of problems with this bill.

I question the constitutionality of the law.

I think targeting bonuses alone is unwise and insufficient. Companies will just get around the law by increasing base salaries, and bonuses in any case are a reasonable compensation incentive, as long as they’re tightly tied to performance at the individual AND corporate level.

I agree that some talented people may be poached by companies not encumbered by the law and that this would put the very institutions we’re trying to rescue even further behind the eight ball.

I worry that banks that aren’t healthy may try to return the TARP money as soon as possible, undermining the main purpose of the program in the first place – keeping the banks well capitalized and the credit flowing.

However, I think all of these potential issues aren’t nearly as concerning as the critics would have you believe.

I’m no lawyer or Constitutional expert, but I do believe the bill of attainder issue has been at least somewhat addressed by broadening the law to include bonuses paid by any bank receiving a certain amount of TARP money. At a minimum, the answer doesn’t appear clear-cut and deciding questions of legislative constitutionality is one of the reasons why we have the court system anyway.

While I’d rather have Congress devise a broader, much more considerate compensation bill, I’m not going to cry that banks which are receiving significant sums of taxpayer money in order to stay solvent are severely limited in their ability to pay out bonuses to people already making a very good living (the bill only targets households with income greater than $250,000). When these banks are healthy and making a profit again, they can return the money and institute whatever compensation policies they want.

In terms of top talent leaving banks targeted by the bill, I think this concern has been wildly exaggerated. The financial industry has been decimated; unemployment in the sector is very high and even some very talented capable individuals are out of work and available should any talent be poached. Besides, you gotta find it laughable that we are worried about these ‘best and the brightest’, since it was in large part these very same folks with their fancy financial alchemy that created the monster which finally broke our system. Perhaps a thorough management cleansing at some of these companies would ultimately be helpful.

I also largely dismiss concerns regarding the unintended consequences of incentivizing banks to return the TARP money too quickly. If banks are healthy, we want them to return the TARP money as soon as possible. If banks are not healthy, and still attempt to return the TARP money, the government can stop them. Government regulation requires a certain amount of capitalization, and the stress tests will hopefully further separate the healthy institutions from the sick ones.

In short, I am glad Congress is moving in haste on this issue, even if in practical terms the AIG bonuses are chicken feed and any legislation addressing them will do very little in terms of getting us out of our current mess.

Would it have been so much better had we used force of law to stop AIG from giving out the bonuses n the first place? Absolutely, and if Geithner or others did not act forcefully enough to make that happen, I hope they are taken to task for that failure.

Do I hope our legislators take the time to craft a meaningful, defensible bill that minimizes any negative unintended consequences? Of course. Now that the first tranche of bonuses have already been paid out, and it will be up to the government to get the money back, it only makes sense to do this right.

But symbolism matters, and if we plan on continuing this practice of doling out hundreds of billions of dollars to companies in need, we have to show that this kind of behavior won’t be tolerated. It’s our money, and we have a right to say how it is used.

If in the process, we begin talking about how our culture of excess and misaligned compensation policies led to an unhealthy focus on short-term profit and an imbalance in dangerous risk-taking, then all the better.

CBS, Microsoft: Brilliant NCAA Tournament Silverlight strategy

Except for a couple of close final games, it was a pretty uneventful first day in the 2009 NCAA March Madness tourney (you know it can’t have been too interesting when your girlfriend correctly selects every game but one – way to ruin her perfect day, Fightin’ Illini, you bastards!).

So I figured instead of discussing the actual games, I’d quickly mention an interesting side issue surrounding CBS Sports’ online coverage of the tourney.

First of all, kudos to Microsoft for being the exclusive provider of the software to run the high-quality version of the video feed. Ironically enough, because I use Firefox and not Microsoft’s IE browser, the standard Flash-based video player at 550 kbps streaming wasn’t even an option for me. I had to use the high-quality Silverlight version, which can stream as fast 1.5 Mbps.

Teaming up with CBS for the tournament is a brilliant move on the part of Microsoft, which is trying to catch up from way behind its main competitor in the video delivery space, Adobe and its Flash technology. Obviously, I don’t know how much Microsoft is paying for this right, but I’ve already somewhat reluctantly downloaded Silverlight on three different computers in my house. Last year, 4.8 million people watched at least part of the NCAA tournament online, so it should end up providing a huge quick way for Microsoft to close the gap.

And I have to admit, I’ve been pretty impressed with the Silverlight software, both in terms of usability and streaming quality. It’s a quite solid experience all around.

One of the Silverlight features that I’m not the biggest fan of is that the software disables the ability to switch games during most commercial breaks. It actually took me a long time to realize that’s why the ‘Live Games’ button wasn’t working at certain points. I’m kind of slow!

I may not like it, but forcing their users to watch at least some ads is a brilliant move on the part of CBS. And it’s probably fair, when you think about it because the only way content like this is going to be continued to be offered for free is if it’s subsidized by advertisers. At least the feature isn’t totally obnoxious; if you switch games only to find out that the other game you’ve moved to is in the middle of its own commercial break, the software is smart enough to allow you to switch games again.

CBS also did a smart thing by always keeping its advertising partners’ logos displayed at the top of the screen even when you expand the video ‘full screen’.

Now obviously in the day and age of Tivo, when people’s patience with marketing content wears thin quickly, I’d rather advertisers try and capture viewers’ attention through clever and relevant marketing and not brute technological force, But in this case, it’s not like the viewers have a choice – if you want to watch the tourney, this is your only option, so CBS and Microsoft are wise to take advantage of that exclusivity.

P.S. Apparently, CBS and Microsoft are also working with YouTube to offer its live broadcasts. Also pretty innovative.

P.P.S. Can anyone help me out on a techie issue – when my girlfriend watches the tourney on her Samsung NC10 netbook, the bottom of the video is cut off, so she can’t see the scores nor access the software’s controls. Is that because of the 10″ screen, and is there anything she can do about that?

The dagbuzz for 3/17/09: Zombie Banks and Executive Suicides

Iowa Republican Senator Charles Grassley yesterday went on the radio and suggested AIG executives do what their Japanese peers often do when the proverbial shit hits the fan and either “resign or go commit suicide.”

Easy to dismiss the senator’s remark as loony-toony and disturbing, but hell, we’re basically following the Japanese blueprint to dealing ineffectively with economic crises anyway. I obviously don’t think suggesting suicide is a helpful plan, but wouldn’t it be nice for once to see American executives demonstrate a little bit of shame and take some personal responsibility for the destruction they’ve wrought?

Image: Sen. Grassley: AIG Execs Should 'Resign or Go Commit Suicide'

Sen. Grassley: AIG Execs Should ‘Resign or Go Commit Suicide’

MOFT: Episode 10 (Ingrid Michaelson)

I finally have a celebrity crush!

For the first time in 35 years, there is finally a woman out there whose posters I want to plaster all over my bedroom walls, whose biographical trivia I want to accumulate like so many rare golden nuggets, whose live and TV appearances I want to schedule my life around (while still respecting all applicable stalker laws, of course).

The object of my intense affection and the clear winner of this week’s My One Favorite Thing award is singer Ingrid Michaelson.

Before last Thursday, all I knew of Ms. Michaelson is she sang this simple, catchy love song called “The Way I Am” that my girlfriend dedicated to me on Facebook (That song, featured in an Old Navy ad, propelled Michaelson to the significant indie-type of stardom she now enjoys. My girlfriend dedicated it to me mostly because it contains the line “I’d buy you Rogaine when you start losing all of your hair,” which, alas, has some, uh, personal relevancy).

I didn’t have much in the way of expectations when my girlfriend told me she bought us tickets to go see Michaelson live at New York’s City Winery (which for all you locals is a fairly new, awesome music venue worth checking out – cavernous yet still somehow cozy, with great acoustics, and good, reasonably priced food and wine to boot).

I certainly didn’t expect Ingrid Michaelson would give one of the most entertaining, enchanting performances I have ever witnessed, and that she would make me all giddy with girl-crush tingliness.

Now I knew from listening to a few of her songs that Michaelson had strong pipes, but she’s no mere studio voice. On stage, her sound reached soaring heights with very little effort, showing at least as much range and power and clarity as on her albums. Plus, she also knew how to use the occasional, well-placed ‘crack’ in her voice to display an endearing vulnerability and fragility in songs that were inevitably about the getting and/or losing of love.

Though it played a clear second fiddle to the star singer, Michaelson’s band was pretty tight as well, benefiting from their long-time collaboration. And the backup vocals – performed by the three guitarists and a key factor in many songs – meshed beautifully with Michaelson’s voice. Her music overall generally rocked a teensy bit harder than some of the other female songwriters who I would put in a similar category, like Feist or Regina Spektor.

But it wasn’t the technical performance of the concert that won me over. The star of the show was clearly Michaelson’s silly, playful, self-deprecating, lovable personality … which came as a complete surprise to me. I don’t know if it was because of her name or her voice, but I expected Ingrid to be this tall, stunning, rail-thin, aloof performer, yet she was actually a bit on the short side, full of curves, mad funny and totally engaging.

Dressed in a stylish yet comfy-looking hipster outfit – tight dark pants, brown leather boots, sleeveless black shirt, colorful scarf and a cute, bowler-like hat –  she reminded me of the sexy best friend you totally dig hanging out with and then all of a sudden somewhere along the way, you realize you’ve fallen in love.

Despite her talent, she seems rather humble and doesn’t take herself or her work too seriously, joking during the concert that she composes all her songs in the ‘C’ chord because it’s the simplest and turning the lyrics of another song into a catchy paean for the Lost TV show.

(I wondered at times if her humility and self-doubt were a bit of an act – she seemed way too engaging of a performer for it to be totally legit – but then there were moments, like when she came back for her encore and spent several minutes trying to remember how to play a tune on the piano, where she truly seemed about ready to lose it).

Michaelson loves interacting with the audience, and its one of her biggest strengths as a performer. Early in the show, she obliged one fellow who wanted to propose to his girlfriend by popping the question for him and then dedicated a beautiful, yet also sweetly realistic song of hers called ‘Giving Up’ to the happy couple. “Thanks for reminding me I’m alone,” she joked. (Oh, but you so don’t have to be, Ingrid!)

At another point, she chided the audience for not being more enthusiastic about joining in on the chorus Ingrid and Deadman ... Can you feel the love?to her song ‘The Hat’. She created this hilarious little story/metaphor – seemingly on the spot – about taking us on a date and comparing our vocal performance to a lame first kiss:

“I take you in my car. I take you home and I reach in, I lean in for a kiss. And what you just gave me was like a dry, half-mouthed, Aunt Mabel kiss. And I bought you like seven dirty martinis so I think I could get a little bit more. So I’m going to try once again, and at least let me get a full lip situation, if not a little over the blouse action.”

When the audience subsequently obliged with a more full-throated response, she screamed “You’re a slut” into the microphone before finishing the song.

I fear I’m not doing a good enough job explaining her rockingness, so I just encourage everyone to catch her act when she’s in town and see for herself. You won’t regret it.

The only thing I regret is how stupid and flustered I got after summoning up enough courage to approach her after the show to get her picture. I don’t remember what I said, but I’m pretty sure it was incoherent. My girlfriend tried to help me out by telling Ingrid that I had immediately placed her in my Top 5, and thus was free to fool around with her, but I think that scared her even more!

Oh well, I’ll do better next time ;-)

AIG Chief on Bonuses: Our ‘Hands are Tied…’ SAY WHAT?!?

Apparently, $175 billion doesn’t buy what it used to.

AIG has decided that it has no choice but to pay out $165 million in bonuses to employees due to contractual obligations. And the government has decided it has no legal recourse to stop the payments.

To make matters even worse, AIG CEO Edward Liddy has the gall to ask the government to reconsider limitations on executive compensation, saying that such limits curtail the company’s ability to “attract and retain the best and brightest talent to lead and staff the AIG businesses.”

Are you kidding me?

First of all, the fact that AIG agreed to contracts where they would have to pay out these kind of bonuses in a year the company lost $99 billion ($61.7 billion in Q4 alone) is absurd and highlights the ridiculousness of the typical executive contract structure. Reform is needed now and responsiblity must start with the board of directors.

Secondly, the idea that AIG had no choice but to pay out these funds is laughable. AIG lawyers said the company would be subject to lawsuit if the bonuses weren’t paid. Now I’m no lawyer, but I say if an executive wants to sue the company because he or she didn’t get a bonus, then bring it on. Even if the legal argument is sound, the public outrage would be enormous. Plus, at least they would be the ones fighting to get their money as opposed to the government fighting to get it back.

Third, the US government should absolutely have the right to stop these bonuses. The government is the one that decided the company was too big to fail. If it wasn’t for the government – and the US taxpayer – AIG would have been gone long ago. We own the vast majority of the company. What’s the point of making that kind of investment if we can’t have a say in how to use the $175 billion in taxpayer money we’ve doled out?

One of the reasons this financial crisis is likely to linger for a very long time is that we are so concerned about honoring contractual obligations, especially to holders of debt and credit default insurance. I understand how important the sanctity of the contract is in a capitalist society, and I understand how not honoring certain contracts could trigger a ripple effect that brings down our entire economic system. But this is a crisis of unprecedented proportions and extraordinary measures clearly are called for. Certainly, we can find a way to have companies in the eye of the storm extricate themselves from ludicrous executive contracts.

AIG is the poster child for the reckless, greedy behavior that played a large part in getting us into this current mess.

We must set an example.

The bonuses are a fucking outrage.

Treasury Secretary Timothy Geithner has a chance to prove that he is not the impotent, incompetent clown I think he is by stopping this debacle from happening.

Melissa Rycroft fans – Welcome! …

I’ve noticed a lot of people coming to this site in the past couple of days are being referred here by Google images, yet the post i did on her is further down the page so I want to make sure you read it if you like by clicking this link. Also the image I used for the story has disappeared from its source, so I am putting up a new one here for both your enjoyment (and mine). She is truly a very pretty girl, and if she’s even half as genuine and sweet as she appeared on TV, then she is a big-time catch and Jason was a big-time idiot (Yes, I am a man, but I confess, I got caught up in watching The Bachelor with my girlfriend. Hell, Melissa is so enchanting I may start watching Dancing with the Stars!)

Anyway, welcome to the site. It’s cool getting the traffic! Hope you stay awhile and look around. Also, be sure to check out the other blog I cross-post at – dagblog.com – where we’ve got a nice little community of bloggers and readers discussing politics, sports, business, entertainment (and whatever else strikes our fancy!)

Cramer v. Stewart: Wow!

I have railed against CNBC host Jim Cramer for some time. I enjoy him greatly as an entertainer, and when he focuses on the inner workings of the stock market, I think he does a pretty decent job of educating regular investors as well.

If that was all his Mad Money show professed to be – a vehicle to entertain and educate investors – then I would have no problem with his on-air performance and crazy antics. Unfortunately, the show also touts its ability to make investors money – mad money, as it were – and it is in that role that both he and the show fail regularly.

When it comes to actual stock and market predictions, I think Cramer has done more harm than good. He has made a ton of bad calls over the past couple of years on his show. And he has also changed his opinions constantly, going from bearish to bullish to back again within the framework of a few shows.

That’s not entirely his fault – there’s no way someone who produces a show every day can come up with good, long-term stock picks or correctly guess which way the market is going to move the following day. It’s just not possible. Hell, even the best investors in the world – and Cramer was a great one when he was a hedge fund manager (although to generate those returns he clearly engaged in some of the shenanigans that he now rails against in his new role as ‘man of the people’) – get many of their picks wrong.

However, for me, the most troubling part has been that Cramer largely stopped living up to his mistakes, something he did with refreshing frequency in the past when he was merely a columnist for his online financial news website Thestreet.com.

So I have to admit I was pleased to watch the Daily Show earlier this month finally take Cramer – and the entire CNBC network, really – to task for some of those poor calls, particularly his claim that Bear Stearns would be fine a few days before it had to be rescued by JP Morgan at $2 a share (the final price ended up being $10).

Cramer happened to take offense to the clip, saying he was taken out of context, after which Stewart and Co. put together a new clip that demonstrated even more clearly that Cramer was wrong.  it was great stuff, and a feud was born.

To his credit, Cramer agreed to go the Daily Show yesterday, and almost the entire episode was devoted to the mano-a-mano interview between Stewart and Cramer. If this had been a fight, they would have stopped it after two rounds. Cramer was annihilated by a deadly serious Stewart.

It was an ass-whoopin’ and I even feel a bit sorry for Cramer, who has always seemed like a decent fellow. Some of Stewart’s attacks – complaining about Cramer’s wild on-air antics, for instance – struck me as a bit unfair. We’re talking about a TV show, after all, not a college textbook.

But most of Stewart’s complaints were right on the – ahem – money.

Watch the video and see for yourself (I’ve embedded Part I of the unedited version). Go to the dailyshow.com for the other two parts, which are probably even more fascinating.

The dagbuzz for 3/11/09: Grading Obama’s Presidency??

So some jackass reporter decided to ask White House Press Secretary Robert Gibbs to grade President Obama’s performance after a whoppin’ 50 days in office. Seriously? You could pass the question off as harmless, silly journalistic tripe, but I think it’s symptomatic of a rush to judge and criticize anything and everything Obama is trying to accomplish. It’s unhealthy, unproductive and unfair. The time to hand out grades will eventually come, but for now, how about giving the president a break and let him do his job.

Image: Gibbs Grades Obama's First Fifty Days In Office

Questions: The Quirks of a Quack

But we’re never gonna survive unless … We get a little bit crazy. - Seal

So-called normal people are boring. A little crazy is good. In fact, it’s a perfectly normal response to life.  Frankly, the only truly crazy people in this world are the ones who think they’re normal.

I certainly harbor no illusions of normalcy. In this long-overdue questions column, I point out some of my personal quirks of which I am most proud. And then I want you to rate them on the 1-10 crazy scale, 1 being ‘That makes perfect sense’, 3 being ‘I guess I can kind of understand that’, 5 being ‘Um, ok.’ 7 being ‘You are fucking loco, deadman’ and 10 being ‘The authorities have been contacted.’

Feel free to add your rationales and insights to your ratings, and don’t forget to answer the 10th question, where you reveal one of your own most intimate and quirkiest quirks. C’mon, everybody’s doing it! As always, the commenting will likely be heavier over on dagblog.com.

1) Bathing

I read in the shower. I know it’s not eco-friendly, but I will often spend twenty minutes or more in a hot shower catching up on the latest current events. My apartment is full of magazines all dried up and wrinkled from having been used in the shower. I really want to invent a waterproof, see-thru device that you could place on the wall of your shower and stick a book or magazine inside. It would need to have some sort of external page-turning mechanism.

2) Flying

I am terrified of flying. I believe dying in a plane crash is one of the worst ways to go. I will often take a good close look at my fellow passengers before and while boarding a plane. I am actually not racial profiling for terrorists or looking for suspicious people, but instead I am on the lookout for rude, obnoxious jerks. I worry that if I am on a plane with enough of these people, then god may decide that I am an acceptable casualty in the name of making the world a better place.

Contradictorily, I also worry if I’m on a plane with a bunch of young children, like from some sort of sports group or camp, because I also feel god likes to do mean shit sometimes and will crash that plane if only to cause unnecessary horrific tragedy to teach some sort of inexplicable lesson.

3) Sleeping

I believe sleep is sacred. I love naps. Dreaming is super-cool, even nightmares. And I do not set alarms, except in the case of emergencies. The body will let you know when it is good and ready to get up. Since instituting my no-alarms policy, I have significantly reduced the occurrence of colds, flus and sinus infections, which I used to get twice or more a year.

4) Shaving

As you can tell from my dagbuzz videos, I don’t like shaving. I pretty much started my no-shaving policy except in emergencies around the same time as my no-alarms policy. I can’t say it’s provided a similar level of health benefits, but it certainly makes getting ready to go out easier.

Aside from the face and head, I do not like hair on the body. I tolerate hair on my chest, arms and legs, and fortunately have very little on my back, but I trim my genital regions regularly. And I cannot stand hair anywhere on women. I chalk it up to early exposure to Playboy as my first source of what the ideal naked female body should look like. It’s hypocritical because I’m pretty hairy, and unfair because it’s natural and widespread, but barring years of psychotherapy and hypnosis, I don’t know what I can do about it.

5) Fucking

I could probably write this whole post about my skewed views on sex. I think as a nation we are still oddly uncomfortable with our sexuality despite the fact everyone talks about it. Discussing sex and being completely honest about it are two different things. Here’s one of my many minority views on the matter: I do not feel it is natural to be with one person sexually for the majority of one’s life, and believe that ‘open’ relationships can work as long as honesty is the rule at all times and both people are aboard the concept.

6) Eating

I am a picky eater. I do not like eating things that are too slimy, or things look like they were once alive. I think people who like their meat rare or close to it are sick. Also, I will almost always leave a little teeny tiny bit of food on my plate no matter how much I enjoyed the dish. I do not know where this habit stems from, or why I do it – perhaps it’s an attempt to show off some willpower, or perhaps it’s an act of rebellion from hearing my dad ask me a million times to clean my plate because there are starving kids in Africa.

7) Dying (and Reliving)

I kind of believe in past lives. At least I believe that reincarnation is the most likely possibility after the less appealing but likeliest ‘we die and then it’s all over’ theory. I believe it is quite possible that our most intense fears and neuroses, like my one about flying, stem from bad experiences we’ve had in recent past lives.

I have one other potential theory – that I am living in a meta-universe that some other life form or species – not god although perhaps that’s an issue of semantics – has created as an experiment or as a game, kind of like their version of the Sims.

8) Singing

I love karaoke. I have one of the worst voices. But I love karaoke.

9) Dressing

My girlfriend calls me Sox. I wear socks all the time, except while in the shower, and on those very rare days when I wear sandals. My feet are almost always cold due to poor circulation, so it’s mostly a comfort thing, and not that my feet are so ugly I want to hide them. I especially hate being barefoot while in bed, as I equate the feeling and sound of toenails brushing against sheets to fingernails on chalkboards.

Around 10-15 years ago, there was a brief period when people who weren’t dads started wearing socks with sandals, at least with jeans, and I was overjoyed. I alternatively believed I started that trend, or was making up that trend.

10) Confessing (Your Turn)

You know the scene in the underrated movie In and Out when all the women sit around making embarrassing revelations to help the one woman with the gay son feel better. Think of me as that mom, and help a brother out by revealing one of your quirkiest quirks.


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