Tuesday, March 31, 2009

“When your news hole is shrinking, waste acres of space on a table of contents.” Is this the New York Times' editorial and financial philosophy?

What is it with the New York Times?

Their finances are in such deep doo-doo that after arranging a sale-leaseback of 21 floors of their brand new Manhattan skyscraper to generate some corporate cash, they’re announcing “temporary salary cuts.”

Ad revenues are shrinking. To save revenue no longer supplied by ad dollars, they've collapsed the metro section into the main section. So you’d think there wouldn’t be a column inch in the news hole to waste on frou-frou.

Instead, each morning the Times blows two — sorry you can’t see this on the Internet, but pick up a copy of the paper newspaper and check it out yourself if you can…

What a waste!

As I was starting to say, each morning the Times blows two pages on nothing but a table of contents. Odd, because in richer days, with more revenue coming in, the Times was perfectly happy to confine the table of contents to a small box on the front page. And oh yes, even with the two-page waste of space, there’s still a partial contents listing on the front page.

Deep in the heart of my cranky soul, I suspect that whatever justification the Times offers in public, the real reason is this: Filling up two pages with news takes a lot of reporters and editors. That’s expensive. Filling up two pages with a table of contents probably doesn’t take more than one junior editorial employee. That’s cheap.

Result: less news per expensively-killed tree, less bang for the subscription buck, less or no coverage of stories that need to be covered, and less clout for the once-very-important New York Times. On the other hand, cranky readers like me do get more of something. More frustration.

Eventually, if it keeps wasting time and newsprint while revenues shrink, The New York Times will be a two-page newspaper. The first page will be a table of contents. The second page will be the contents — all the news that fits printed on one side of a page. And all the former readers will be somewhere else.

Editor Bill Keller, are you listening?

Friday, March 27, 2009

The crybaby of AIG

A few days ago, I opened the Op-Ed pages of the New York Times and read a job resignation letter by Jake DeSantis, a former AIG Executive Vice-President.

DeSantis, who had been the head of business development for commodities at AIG, felt “betrayed” by AIG and “unfairly persecuted by elected officials.”

For a moment I almost felt sorry for the DeSantis, who seemed to be feeling the heat from two attorneys-general who were threatening to reveal the names of bonus recipients like him, and of Congress, which is threatening to tax those bonuses at a 90% rate.

As a consequence DeSantis was quitting, revealing his own name, and giving to charity his entire bonus — after tax deductions —of 742,006.40.

Million dollar mogul in
a five and ten cents huff

Of how much? Doesn’t that mean is real bonus was somewhere slightly north of $1 million?

And he resents the ire of the American taxpayers?

Hey, Jake, ever hear about the auto workers who had to give back part of their contracted-for medical and pension benefits?

Hey, Jake, ever hear about the out-of-work blue and white-collar folks who don’t know where their next meal or mortgage payment is coming from, while you admit “saved enough that my family is unlikely to suffer devastating losses during the current bust?”

I’ll bet you did and I’ll bet your family won’t suffer, considering the kind of past earnings that led you to expectations for a million-plus bucks a year.

"Innocent?" Well, not exactly.

You claim, Jake, that you had nothing, nada, zilch-o to do with the AIG meltdown. You say you're innocent.

I believe you. But maybe that’s because you were lucky. Instead of slicing and dicing mortgages, you were slicing and dicing and indexing commodities futures next door. They just didn’t happen to melt down. Not yet, anyway.

The good, the bad the commodified
and the commodity indexified

Now I have no objection to the concept of commodities trading. At least not agricultural commodities trading on a per-contract basis. Buying or selling agricultural futures enables a farmer to lock in a profit — or prevent a loss — on his crops. It enables companies like coffee distributors to stabilize prices at the supermarket. It has a reason, other than sheer greed, to exist.

But by the time commodities get to the Trading Desk, it’s another story. When people start packaging commodities into indexes, and selling put and call options on the futures, and futzing around with margins, and God-knows-what-else since the last time I looked in on the business, that’s not useful. That’s just another form of irresponsible economic parasitism, no different from mortgage mysto-magic.

Remember, all the money you made in commodities for AIG came out of somebody else’s pocket. In 18th Century England they used to hang pickpockets. Here we give them million dollar bonuses.

"Whaaa, whaaa, whaaa!"

Some time ago I mentioned what I heard commodities futures salespeople call the plumbing contractors and dentists and others whom they gulled into trading futures with the promise of huge profits, and then watched lose their shirts.

“Crybabies,” they called them.

So Jake, in an economy where people are losing their homes, their jobs, their savings, their investments, their pensions and their shirts, guess what you are with your million dollar temper tantrum?

Right. Look in the mirror.

Thursday, March 19, 2009

"I (heart) communism?" Gimme a break! Some brief impressions of life in the, uh, Peoples’ Republic of Vietnam.

• Somebody at the local ad agency in Hanoi needs a lesson in original thinking. That "I (heart) Communism" poster in the photograph above is a ripoff of the "I (heart) New York" advertising campaign that was new more than 25 years ago.

• There is some prosperity under the communist government. I said some. But not a huge dose of it. A big positive indicator: The formerly ubiquitous bicycle has been largely replaced by the absolutely ubiquitous motorcycle and motorbike traffic jam. And yes, I did see significant amounts of new building construction all the way from Hanoi, down Highway One to Ho Chi Minh City (formerly Saigon.)

• But huge numbers of people, even in the cities, are still living in shacks. And you don’t even want to know about the sanitation. Living in Vietnam is a very mixed bag. The communists have failed to do enough redistributing of income — sort of like Republicans here. And I was told there is virtually no social safety net. Grover Norquist would love being a Vietnamese communist.

• To quote one informant: “Yes, we really do feel free to say anything we want about the government here. As long as we don’t write it down.” In short, freedom of speech, yes — although I wouldn’t shoot my mouth off in a government office about corrupt bureaucrats. But there’s no freedom of the press.

• Some Vietnamese complain that corruption is rampant. I got to see one example of what they mean — the Vietnamese roadside equivalent of a rural Georgia speed trap. Our tour bus was flagged down along Highway One for some imperceptible (at least by me) traffic violation. The driver, who didn’t look happy about it, left the bus almost in tears. Evidently, the bribe he was required to pay had to come out of his own pocket, not the bus company’s. Suddenly, the cops saw another bus coming. Whaddya know! Two of the three ran away from the first “transaction” to flag down the next bus. Hey, policing is a business.

• The Vietnamese seem willing to forgive us for the war. Maybe just because they need our money. Maybe because the majority of the country’s population wasn’t born yet during the 60s and 70s. In any case, Americans seem to encounter no overt hostility.

• But the Vietnamese don’t forgive their own. A member of our tour group, an American captain during the Viet Nam War, found a private guide in Ho Chi Minh City to show him the “jungle” area where his unit had been located. Well, it’s jungle no more, just an extension of the expanding city. But the guide was “as bitter as they get,” said my fellow tourist. The guide had been ARVN, working with the US Army. For this he got sent to a “re-education camp” for four years — the equivalent of what you and I might consider prison. However, when they let him out, they weren’t finished with him. The government withheldhis work permit. So he can’t get a job. He also can’t go to school. He ekes out a subsistence doing secret “private tours” for visiting American war vets. The rest of the time he lives off the kindness of his family, 21 of whom occupy a four room house.


•Pickpockets are busy in Ho Chi Minh City. We were warned. Even so, a woman in our group lost her passport and credit cards right in the center of town. If you go to Saigon, hang on tight to your stuff.

• The Vietnamese are very touchy-feely. They’ll not only grab your arm and try to make you hold still until you buy something. (“You buy, you buy!”) If you’ve got a big belly (as some in our group did) they’ll run up to you and rub it for good luck, exclaiming, “Happy Buddha! Happy Buddha!” This is in reference to a common image of the Buddha as pot-bellied and smiling. First thing I did when I got back to New York was put in a call to a nutritionist to put me on a diet.

• Prostitution is illegal. But our guide took us to dinner one night in Saigon’s red light district, a long narrow alley lined with brothels. There must have been ten whorehouses in a row, each with a dozen or so girls lined up outside or just inside the doorways of their establishments. But of course that plain-sight whorehouse row is completely illegal. (See the item several paragraphs above about corruption.)

Tuesday, March 17, 2009

Crooks, “legal” crooks at banks, and guillotines. Maybe it’s time to set ‘em up at the mall for bankers.

Enough has been said about the crooks at AIG who took taxpayer money that was meant to get the economy restarted and instead distributed it as bonuses for themselves. I’m not going there again today, except to say it’s time to set up guillotines at the mall.

Instead, I want to call your attention today to a danger I haven’t seen getting much attention elsewhere. It turns out that when you purchase a bank CD, your interest money isn’t safe.

Warning: A strange bank can
seize your high-interest CD
and pay you next to no interest

If bank where you bought the CD fails, and another bank purchases its assets, the new bank can, under certain circumstances, grab your money until the CD expires, but pay you virtually no interest.

It happened to me while I was on vacation in Southeast Asia. While I was out of the country, a letter dated February 25th arrived from Fidelity, my broker, saying I once owned a CD purchased through them at the “former” National Bank of Commerce. Unfortunately, the National Bank of Commerce had gone belly-up.

No problem because my deposit was FDIC insured, right?


FDIC turns out to be
the bank’s friend, not yours

Republic Bank of Chicago acquired the deposits of the National Bank of Commerce, including my CD. I could yank my money out, but only if I did so by March 5th. Well, on March 5th I was sightseeing in Viet Nam, a hell of a long distance from my mail box.

Under FDIC “guidelines” that was tough luck — tough luck for me and tough luck for other depositors like me.

E-mail? That’s for spam,
not urgent business.

Had Fidelity sent me an e-mail about this on February 25th, while I was still here, I might have been able to do something. Nah! Fidelity uses e-mail to spam me up the whazoo with financial planning offers and other promotions. But when it comes to something urgent, they send it down to the mailroom for sl-o-w processing and snail mail shipment.

But I digress. Republic Bank of Chicago cut my rate from roughly 3.2 percent to a quarter of a percent — in other words, they’re paying virtually nothing to use my money. And now, because I was out of the country when they announced a ten day window for bailing out of the CD, I can’t bail out any more. I have to leave my money there at for a quarter of a percent interest rate that I never agreed to until the CD expires more than a year from now.

In other words, the bank has a right to enforce your CD obligations or enforce "substantial pentalties", while ignoring the bank obligations that led you to buy a CD in the first place. Heads they win, tails you lose.

And all this is legal according to FDIC “guidelines.”

Morality? Ethics? Don’t make me laugh.

Remember what they did to
the greedy person who said,
“Let them eat cake!”

There’s a greedy bank Chairman at Republic Bank of Chicago named Aristotle Halikias who decided to rip off the innocent CD depositors at another bank by paying them a quarter of a percent more than zilch. Halikias is another example of the banks declaring, “Let them eat cake.”

When they set up guillotines in public places for the likes of the AIG executive staff and Board of Directors, and for greedy deposit grabbers like Halikias, please let me know. I want to be in the front row of the crowd to watch the heads bounce. I’ve been to Chicago and I think the corner of Michigan Avenue and Wacker Drive would be a great location for the scaffold. Or perhaps you can suggest a better one?

Incidentally, I photographed guillotine in the picture at the “Hanoi Hilton” in Hanoi where John McCain once was imprisoned. I had hoped to use my first post back from vacation to tell you more about that. But no, with bankers on the rampage once more, the Hanoi Hilton will have to wait.

That’s because instead of guillotines in a former French prison in Hanoi, we need them here to discourage bankers from grabbing their depositors’ money and taxpayer funds to enrich themselves.

Where is Mme. Defarge now that we need her?

P.S. Okay, Mme. Defarge, you can put down your knitting needles. Or at least for now you can. The bank, prodded by the "best efforts" of my stock brokers, relented and sent back my deposit, although not the rather more substantial interest I thought I had been earning between mid-January and the time the bank, via the broker, got around to notifying me that they had, umm, revised the terms of the CD.