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Finance Markets need your support!

3 minute read

I would personally like to thank the financial markets of the world. I think it is great when our banks and financiers make mistakes and then calculate their losses and jump up fees to cover these losses to consumers.

I do note today that the US Government has decided that it will not be an open cheque book to all of these doyens of society with their bailout package. Of course the finance markets were not impressed and sent the markets and US dollar down. Oh, it is not all gloom, the price of oil sky-rocketed.

I think it is fair that the executives of these companies should retain their multi million dollar salaries after the bailout, after all they are really important people and have become accustomed to a lifestyle that cannot be compromised.

I think Kevin Rudd should commission a detailed financial market report to come out sometime next year (or the year after) before making any decisions. Of course Malcolm Turnbull would welcome the timing of this report and should be given time to work our where to put all of his hard earned money. I think what’s required is a bi-partisan approach from both Kevin and Malcolm as they will certainly need to sort out their portfolios (and their wives portfolios).

The Banks should also be given a little time to get their media releases in order to make sure their message is one of compassion and candour. I mean they have to protect their shareholders as well. Don’t you just love competition!

As for all all my financial market media friends, I suggest you write some articles on how you all saw this coming and back date it about a year and pretend that we were all in with Warren Buffet in warning us about the impending collapse of the US financial markets and how you told us it would be so! (it’s easy to do with blogs, just click on right hand side menu and back date published date)

All of us that have friends in financial markets who we all look up to with their fancy degrees and intimate knowledge of the finance sector. Please let us all spend a moment to feel for them and let’s hope that the governments of the world can preserve their salaries and lifestyles so we can all get back to paying off our mortgages, filling our cars up with petrol and having those credit cards left over for paying the bills and schooling/feeding the kids.

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17 Comments

  • Robert Simeon
    Posted September 23, 2008 at 1:12 pm 0Likes

    Sir Les – are you suggesting a Save the World Fund?

    Just a bit of trivia – with the $US700 billion “Uncle Sam Plan” were you aware that a newly created roll for the President (elect) would also be that he has now become (if approved) the largest residential Property Manager on the entire planet. Imagine calling Sarah Palin (John McCain was taking a nanna nap) to tell her that their washer needs replacing?

  • Peter Ricci
    Posted September 23, 2008 at 1:20 pm 0Likes

    You are scaring me Robert, please give me a world without Sarah Palin running things.

  • Peter Ricci
    Posted September 23, 2008 at 1:21 pm 0Likes

    Actually I think McCain maybe already dead, have you seen “Weekend at Bernies”?

  • Robert Simeon
    Posted September 23, 2008 at 2:26 pm 0Likes

    Peter,

    Now who could possibly forget “Weekend at Bernies” although to this very day I am still buoyed by it 🙂

  • Glenn Batten
    Posted September 23, 2008 at 4:30 pm 0Likes

    The power of corporations at work as the executives line their own pockets whilst fleecing everybody else..

    Over the past year Merrill Lynch wrote down $US52 billion in assets, posted cumulative losses of more than $US17 billion and had to raise nearly $US30 billion in capital to stay afloat only to be bought out by the Bank of America for just $US50 Billion.

    In 2007 Merrill Lynch CEO John Thain earned over $US83 million and was the highest earning executive in the financial sector in the US and probably the world.

    In December 2007 Thain brought in one of his best mates, Nelson Chai who earnt $2.5 million dollars for just a months work as executive vice president and chief financial officer. This was over the Christmas period so he probably did not work that much anyway.

    In August 2008, Thain gave another mate a job, Thomas Montag for $US40 million dollars.

    But he is not the worst, the former CEO sacked 25,000 employees during his reign and left the board last year with a $US161 million dollar golden handshake.

    Thats around $US300 million paid out to just 4 people in the company as it went broke….. and they wonder why ?

  • Robert Simeon
    Posted September 23, 2008 at 4:48 pm 0Likes

    Sounds familiar ? Are you sure that this is not the REA business model ?

  • Peter Ricci
    Posted September 24, 2008 at 10:17 am 0Likes

    Actually Robert, I was shocked at how little Simon was paid, yes he had good share options but his wages were pretty thin.

  • Peter Ricci
    Posted September 24, 2008 at 10:22 am 0Likes

    I have to laugh, after reading this I went onto some news sites and because the government was not going to just give them money to continue on as they did and bail them out with out any conditions the market dropped. I think it is ironic that this is the way the market works. I thought it would have gone up, considering that they would finally make sure that these companies did as they promoted instead of just execs pushing money into their own profits, it just demonstrates pathetically how the financial markets work, it is all about greed. This is a sad thing.

  • Glenn Batten
    Posted September 24, 2008 at 11:29 am 0Likes

    They are incredible… the latest is that the financial sector claims the Government has to pay them more than the assets are valued at or it will not work. This plan represents $US2000 for every single American!

    I wonder if they will use those rules the next time I apply for a home loan.

    They are actually trying to blackmail the government now saying that if they do not get the money the country will fall into a recession, and some even say a depression. Personally I think a recession is a given, even with this bailout and once the unemployment figures come out over there it is all over. This bailout will save the rest of the world and will save them only from a depression.

  • Peter Ricci
    Posted September 24, 2008 at 11:42 am 0Likes

    Maybe a different approach, a department set up to protect the consumers and let them fold.

  • Mr Burns
    Posted September 24, 2008 at 3:37 pm 0Likes

    What good is money if it can’t inspire terror in your fellow man?

    I’ll keep it short and sweet — Family. Religion. Friendship. These are the three demons you must slay if you wish to succeed in business.

  • Mr Burns
    Posted September 24, 2008 at 3:46 pm 0Likes

    If you want to know where all this is going read this Q & A from a forum –

    1) Where does all this money required to bail out these Companies come from—I believe its just printed and isn’t actually a “surplus” as such.So wheres it come from?

    US Treasury creates bonds from nothing, loans them to Fed Reserve who loans to an ever expanding list of appoved borrowers.(Thats why Goldman Sachs and Morgan Stanley both changed their status yesterday, pure investment banks aren’t allowed at the Fed’s begging bowl.)

    (2) Where does this money go —who gets it—who benefits—

    Paulson wants it all for Wall St, Congress is debating who else should get some how is it used to buy worthless **** on bank balance sheets that they can’t sell anywhere else —what actually IS the debt being paid out? very complex non-exchange derivatives which have a variety of euphemisms – “mortgage securities,” “troubled assets,” etc which have lost massive value, while some are swaps which have been triggered due to Lehmans bankrupcy which means counterparties have promised a truckload of money in case of default, but don’t have.

    (3) OK so these debts are paid out—who owes who for what?

    If the govt buys the toxic paper, the banks owe nothing, they have just “sold” the govt something. transaction finished.
    Does the Government now own the companies bailed out? Only those they’ve injected capital into in exchange for equity such as 80% AIG and in effect Fannie and Freddie Do they have to pay back the debt—ever? Debt thats written off, or bought at reduced rates doesn’t have to be paid back, but someone has to take the hit on the balance sheet

    (4) OK so now the American government is in deeper and deeper debt—TO WHO?

    To whoever buys the bonds, up to now, to many foreign govts, but if foreigners don’t buy, they print money themselves and owe it to themselves – national debt Whats to stop a never ending increase in debt? Nothing. Thats what will happen.
    How would this debt be paid back? It can’t. Theoretically it could, like Australia has, by running govt budget surpluses until its all paid back, but the US is way too deep in debt to do that. Also its obligations are rising – medicare, social security, this etc, while its tax base drastically shrinks with a recession Who would pay it back? The loans from the Fed window will never be paid back, just rolled over forever If its never paid back then what. The Fed has a horribly impaired balance sheet which for which its had to print money to cover. The USD drops.

    (5) I understand that hyper inflation will devalue the monetary system of the country involved.

    Yes, thats whats coming, very serious inflation At that point of collapse what happens to start it up again as Germany did? Yes, exactly same situation – massive, unrepayable debts, lead to printing money to pay, which devalues the currency at an everincreasing rate.
    Whats the process? To start over? Same as Germany, issue a new currency. Or same as Russia and many others, keep the old one and lop 3 zeroes off every so often, shafting anyone holding bank accounts with the old currency instead of hard assets at that time.

    6. You didn’t ask this, but I will. Will it work?

    No, the problem is way too big. The OTC derivs which are starting to unwind and fall over are 1.1 quadrillion dollars now. 1300 times bigger than the proposed bailout

  • Robert Simeon
    Posted September 24, 2008 at 4:27 pm 0Likes

    Q. How do you get rid of an investment banker at your front door?

    A. Just pay for the pizza!

  • Mr Burns
    Posted September 24, 2008 at 10:26 pm 0Likes

    Sorry Sir les I should have commented on your latest post.

    You are indeed gifted with the insight that only a worldly statesman can lay claim to.

    Congratulations for sharing and rest assured your Super is protected and has preferrence over the troglides who populate the general population.

    As a friend of mine once said –

    ” Just give the great unwashed a pair of oversized breasts and a happy ending, and they’ll ‘oink’ for more every time “

  • Mr Burns
    Posted September 25, 2008 at 7:23 pm 0Likes

    Darned typing machine misquoted me again, the 3rd last paragraph was supposed to read.

    “Congratulations for sharing and rest assured your Super is protected and you have preference over the troglodytes who dominate the general population.”

  • Peter Ricci
    Posted September 26, 2008 at 8:34 pm 0Likes

    Mr Burns, that is ok, I got it! Kind of 🙂

  • James Drysdale
    Posted October 8, 2008 at 10:55 am 0Likes

    Too funny guys

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