Finance Archives

Remain calm! All is well!
Posted by Fired Fred on October 12, 2007 2:54 PM
Banks are one of the most corrupt businesses that exist. They play favorites with rich customers, shaft the poor ones with all kind of fees, and get to do pretty much what they want thanks to the fat checks they write to Congress.

They have their bad points too, I'm sure. Like lying to the public about their portfolios...
Months before Merrill Lynch & Co. (MER) preannounced a third-quarter loss and a writedown of $5 billion last week, it had been assuring investors and the press that its portfolios of mortgages and asset-backed securities were well-hedged and profitable.

Investors are now questioning why Merrill would dissemble if the truth was going to come out weeks later.
Um, could it be because they're lying bastards trying to hang on to their jobs?

That didn't work for quite a few people...
Merrill Lynch Chief Executive Stanley O'Neal last week fired global fixed-income chief Osman Semerci and his North American lieutenant, Dale Lattanzio.

Citigroup on Thursday fired its capital markets and trading head, Tom Maheras, in the wake of announcing an upcoming $5.9 billion writedown that took the markets by surprise. The bank also dumped one of his top lieutenants.

UBS is the only one of the big banks to have held its top executive responsible. In July, it fired Chief Executive Peter Wuffli after the collapse of a hedge fund unit, which he had helped engineer, cost the bank some $300 million.
If you take $5 billion out of investors' pockets, that's a writeoff. If you take $100, that's at least a misdemeanor. Set your sights high, peeps, cuz if you're on top of the banking world, you can commit legalized theft for at least a little while.
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Bank of America cuts up 3,000 jobs
Posted by Fired Fred on October 25, 2007 4:50 PM
All those bad mortgages have caught up to the banks. Everyone's dumping people as fast as the executives can push them out the door to save their skins.

Bank of America has an assembly line, or is it a job disassembly line, in operation to fire people after they put up a mere $3.698 billion in net income last quarter.

Just think of the unimaginable horrors the C-level types could experience if they didn't toss out all those employees. They might have to fire a gardener or maid at home, or limit their consumption of caviar to a jar or two less per month.

Imagine the sadness at the prospect of selling off one of the vehicles from the 10 car garage to make up for, oh, having to eat a pay cut instead of getting rid of a bunch of people who aren't going to ski outside the United States anyway.

Gasp! Seriously, what kind of ass would suggest a little less largess at the top of the corporate pyramid, so a few of the little people could hang on to their jobs? Obviously someone who doesn't shop on Fifth Avenue or Rodeo Drive.

That's just un-Bank of American.
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Dude, you're losing the Bear Stearns gig
Posted by Fired Fred on November 1, 2007 4:51 PM
Finally, a CEO may be on the way out of his job for a totally awesome reason. They think he was toking up in Memphis three years ago.

That seems awfully harsh, but Jimmy Cayne has made plenty of people feel really down about stuff like massive hedge funds collapsing...
Cayne has been criticized for spending too much time playing bridge and golf while Bear stumbled this summer on wrong-way bets on subprime mortgages. Two Bear-run hedge funds collapsed, a crisis that unfolded as Cayne, a world-class bridge player, competed in a tournament in Nashville.
That's going to make the next job interview for Joint Jammin' Jimmy pretty uncool. "So why did you leave your last job?" "Dude, they totally harshed me for partaking, brah, can you believe it?"

Yeah, brah, I can believe it. Totally.

Image courtesy Reuters
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Massachusetts doesn't listen to Buffett or Dilbert
Posted by Fired Fred on February 6, 2008 5:07 PM
If I've blogged about firings that involved companies instead of people, I've forgotten them. People are funnier, anyway.

Governments and big companies can be funny too. Just look at Goldman Sachs, the latest money firm fired by Massachusetts for navigating state pension funds into less than profitable waters...
Travaglini alleged Goldman had been failing to meet the pension board's expectation to outperform the S&P 500 index. The board will now temporarily invest the money in a passive fund that tracks the index until it completes a review of its domestic equity allocation.
I'm going to break with tradition here to pass along advice from a couple of the wisest philosophers of our time. Warren Buffett and Dilbert's human side, Scott Adams, both offer the same investment suggestions.

The Oracle of Omaha put it this way...
In response to a question about why Buffett recommends index funds to investors, he said that for "a know-nothing investor, a low-cost index fund will beat professionally managed money." He also said he had a standing offer to anyone who could name 10 hedge funds that will beat a low-cost index fund. No one has taken him up on his offer.
As for the guy who wags Dogbert's tail, Scott Adams echoed that advice in his 9-Point Investment Plan...
Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
See, if Massachusetts spent more time listening to cartoonists and old billionaires, and less time over the past five months firing money managers and obsessing over the choke-job Patriots, they would have been ticking along nicely in an index fund, probably with a discount for being a big investor.

But what does a snarky blogger know? Well, this one knows how to get to Vanguard's web site and not dump money into funds with front-end loads and high expense ratios. That would make me the smartest kid in Boston.
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