"Wall Street" (v.2009)

As a regular reader of the Wall Street Journal I love its understatement. Friday, in a story about departing Merrill Lynch CEO John Thain, there was this gem:

"But his image has been hurt in recent months, most notably by Merrill's $15.31 billion quarterly loss and his behind-the-scenes lobbying for a multimillion dollar bonus."

Yeah, that would pretty much do it.

Article goes on to state: "He left for vacation in Vail, Colo., after the losses surfaced. He also accelerated ($4 billion in) discretionary bonus payments at Merrill so they could be collected before the end of the year....He is also facing heat for spending lavishly ($1.2 million, including a $35k commode) to renovate his office after arriving at Merrill last year."

This is the same Merrill where a single manager running a bunch of brokers in the mortgage-backed securities dept. got $35 million in bonuses in 2006. And we wonder why the mortgage business became such a runaway freight train. (Hint: it wasn't because of some law passed in 1977.)

This is also the same John Thain who one year ago, amid the first signs the bubble was bursting, said: "This problem is not zero, but for the most part it is behind us."

More recently, after BofA closed its purchase of Merrill, its CEO asked Thain why the losses were so bad. "Not only did Mr. Thain not appear concerned about the losses, but he "didn't really have a good grasp of what was going on," the Journal reported.

I've noticed a number of people here live in a fairyland where the only people who ever do any economic harm are Barney Frank and the UAW. Business owners and executives are people of unquestionable skill, intelligence and integrity. Whatever rewards they reap are purely a function of their superior work ethic and noble service to the economy. If only we ran our public institutions like businesses, the theory goes, all would be well, forever and ever.

Well, how many of you would want John Thain -- or any of the many like him -- on the local school board?

The roots of our economic problems are complex, but I believe one large part of the problem is that our corporate boardrooms have become way too populated by back-scratching plutocrats whose chief motive is amassing dynastic wealth, risk-free. If shareholders make some money and jobs are created along the way, great. But if the house of cards collapses, guess who keeps all the bonuses and retires in luxury while the shareholders and workers lose?

"Wall Street" epilogue

Submitted by bowser on Thu, 01/29/2009 - 8:30am.

This from a NYT column on the topic of clueless masters of the universe:

"In an interview with Maria Bartiromo on CNBC, Thain used the specious, contemptible reasoning that other executives use to rationalize why they’re keeping their bonuses as profits are plunging.

“If you don’t pay your best people, you will destroy your franchise” and they’ll go elsewhere, he said.

Hello? They destroyed the franchise. Let’s call their bluff. Let’s see what a great job market it is for the geniuses of capitalism who lost $15 billion in three months and helped usher in socialism.

Bartiromo also asked Thain to explain, when jobs and salaries were being cut at his firm, how he could justify spending $1 million to renovate his office. As The Daily Beast and CNBC reported, big-ticket items included curtains for $28,000, a pair of chairs for $87,000, fabric for a “Roman Shade” for $11,000, Regency chairs for $24,000, six wall sconces for $2,700, a $13,000 chandelier in the private dining room and six dining chairs for $37,000, a “custom coffee table” for $16,000, an antique commode “on legs” for $35,000, and a $1,400 “parchment waste can.”

Does that mean you can only throw used parchment in it or is it made of parchment? It’s psychopathic to spend a million redoing your office when the folks outside it are losing jobs, homes, pensions and savings.

Thain should never rise above the level of stocking the money in A.T.M.’s again. Just think: This guy could well have been Treasury secretary if John McCain had won.

Bartiromo pressed: What was wrong with the office of his predecessor, Stanley O’Neal?

“Well — his office was very different — than — the — the general décor of — Merrill’s offices,” Thain replied. “It really would have been — very difficult — for — me to use it in the form that it was in.”

Did it have a desk and a phone?"

Couldn't have said it better myself.

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I Personally Like Geithner the Tax Cheat

Submitted by skyspy on Thu, 01/29/2009 - 8:58am.

I can hardly wait to do my taxes next year. I will sit down, decide how much money I need back. Then using the geithner tax method proceed accordingly. I think I'm going to want at least $20,000 back. This is our free ticket to cheat on our taxes. It doesn't get any better than this.

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Geithner

Submitted by Fred Garvin on Thu, 01/29/2009 - 1:14pm.

Geithner on taxes

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Geithner's no hero either

Submitted by bowser on Thu, 01/29/2009 - 12:31pm.

Obama should have crap-canned him when the tax stuff came out, imho.

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