Watching the slow-motion train wreck of an economic system collapse unfold

Watching the slow-motion train wreck of an economic system collapse unfold
click pic to reminisce

everything that is wrong with the world of wall street in one chart:  

Posted by howard in nyc

2012_02_04
12:05

adapted from a nice column from Mish:  

http://globaleconomicanalysis.blogspot.com/2012/02/cost-for-doing-gods-work-declines-from.html


what is the job of a CEO of a publicly held company? most books that i have read say 'to maximize shareholder value'. here is the chart of the weekly stock price for a large publicly held company, over the year 2011:



rough year. ex dividends, shareholder value was nearly cut in half. (to be fair, the dividend has held steady at 1.2%. about what you can get risk-free from a 5-year treasury bond.) the board of directors must've been out for blood. if the ceo wasn't dumped, surely he would be on notice. and he could forget about that big bonus, right?

the ceo did have his base salary more than triple, from $600,000 to $2 million, 2010 to 2011. but his bonus was cut. 2010--$12.6 million. his penalty for chopping shareholder value in half in 2011? a bonus of only $7 million.

2010--company performance is basically flat, ceo is paid $13.2 million. 2011--company loses half its value, ceo is paid $9 million.

it gets worse.

this is by far the most well connected, most dominant company in its industry. it is hard to imagine a firm with a more advantageous structure and position to make a profit. yet, if you were a pension fund or mutual fund that invested in this company's stock at the beginning of last year, you lost nearly half your money.

but the ceo doesn't have to worry about being responsive to the shareholders. he gets paid anyway. after all, he is doing god's work.



i'm sure lloyd blankfein earned every penny of that $9 million.  in fact, he was heard to mutter, "now i know how the greeks feel!"

http://globaleconomicanalysis.blogspot.com/2012/02/cost-for-doing-gods-work-declines-from.html

the disconnect between the interests of the top executives of firms from the interests of the shareholders is the single biggest problem in the long-term structure of american capitalism. tightly coupled with that is the focus upon short-term 90 day goals and horizons.

both of these deep, horrific departures from the way business has been done in the usa for decades until recently is ultimately the fault of the shareholders--for allowing the lack of accountability to grow worse, in return for the prospect of chasing near term stock price growth.

ultimately, i blame not the leaders but the voters. in politics, and in finance. if i was lloyd blankfein, and the board of directors/shareholders aren't gonna say shit, i'd pay myself a bundle for failure too. (well, i wouldn't; but i can't blame him for being human.)





February 2012 Final Jeopardy! Challenge  

Posted by howard in nyc

Monday2/27
Category:  U.S. MEMORIALS
Clue:  "No day shall erase you from the memory of time" from Virgil's "Aeneid" is inscribed on a wall at this memorial

Answer:  What is the 9-11 memorial in New York?  bullshit question.


Tuesday 2/28
Category: THE 1960s
Clue:  On nominating this man in 1967, LBJ said "(I)t is the right thing to do, the right time to do it, the right man & the right place"

Answer:  Who was Thurgood Marshall ? first African-American Associate Justice of the Supreme Court


Wednesday 2/29
Category: THE HISTORY OF CHRISTIANITY
Clue:  The Catholic & Eastern Churches separated in 1054, when the Pope & Pariarch did this to each other; it was undone in 1965

Answer:  What is excommunicated ?




Monday2/20
Category:  FRENCH PAINTERS
Clue:  This French painter wrote, "I am good for nothing except painting and gardening"

Answer:  Who was Claude Monet ?


Tuesday 2/21
Category: ASIAN BORDERS
Clue: In 1893 the British established the Durand line, now the boundary, much in the news since 2001, between these two countries

Answer:  Where are Pakistan and Afghanistan?


Wednesday 2/22
Category: THE NEW TESTAMENT
Clue:  In Chapter 1 of the Acts of the Apostles, Matthias is chosen to replace him

Answer:  Who is Judas Iscariot ?


Thursday 2/23
Category:  SINGERS
Clue:  On the eve of Earth Day, 2011, he became the first performer inducted into the Colorado Music Hall of Fame

Answer:  Who was John Denver ?  what a dumb-ass clue.


Friday 2/24
Category: LITERARY BIOGRAPHIES
Clue:  Quoting a famous line of his, a 2011 biography of this man was titled "And So It Goes"

Answer:  Who was Kurt Vonnegut Jr ?








Monday2/13
Category:  ANNIVERSARIES
Clue:  In 2011 Elizabeth II marked the 400th anniversary of this, assembled by 47 translators in Oxford, London & Cambridge

Answer:  What was the King James Bible ?


Tuesday 2/14
Category: COUNTRIES OF THE WORLD
Clue:  The 14 countries that border China run alphabetically from this to Vietnam

Answer:  Where is Afghanistan ?


Wednesday 2/15
Category: U.S. STATES
Clue:  This third-smallest state in area is home to the USA's third-oldest college

Answer:  What is Connecticut ?



Thursday 2/16
Category: PEOPLE IN HISTORY
Clue:  The name of this assassin is Latin for heavy, dull, insensitive, oafish

Answer:  Et Tu Brute ?


Friday 2/17
Category: LITERARY CHARACTERS
Clue:  The only title character in her creator's 6 major novels, she was portrayed in a 1996 film & a 2009 miniseries

Answer:  Who is Emma (Woodhouse) ?  first name is sufficient, according to alex






Monday2/6
Category:  COLONIAL HISTORY
Clue:  A 1763 letter said that these 2 men were equipped with "instruments…to look at the posts in the line for ten or twelve miles"

Answer:  Who were Charles Mason and Jeremiah Dixon ?


Tuesday 2/7
Category: MEDICAL DISCOVERIES
Clue:  Nicolas Paulescu isolated a substance he called 'pancrein', now known as this

Answer:  What is insulin ?


Wednesday 2/8
Category:  COMIC BOOKS
Clue:  An inspiration for this character introduced in 1929 was 15-year-old Palle Huld's 44-day voyage around the world

Answer:  Who is Tintin ?  What is 'the fuck is that'?


Thursday 2/9
Category: CHARACTERS IN POETRY
Clue:  The name of this title heroine of an 1847 poem is from the Greek for "good news

Answer:  Who is Evangeline?  that's almost Anabel Lee, right? half-credit?


Friday 2/10
Category: ANCIENT QUOTATIONS
Clue:  When Byzantine Emperor Justinian completed Hagia Sophia, he declared, this king, "I have surpassed thee"

Answer:  Who was Solomon ?






Wednesday 2/1
Category: WORD ORIGINS
Clue:  From the Arabic for "storehouse", in 1731 it was first used to refer to a monthly storehouse of information

Answer:  What is 'magazine' ?


 Thursday2/2
Category: 19th CENTURY AUTHORS
Clue:  One of this author's greatest successes came after remarking, "i want to write about a fellow who was two fellows"

Answer:  Who was Robert Louis Stevenson ?


Friday 2/3
Category: NATIONAL PARKS
Clue:  A biosphere reserve,, this southern national park is the largest in the lower 48 completely within one state

Answer:  What is Everglades National Park ?