-- Posted Tuesday, 17 March 2009 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Tuesday, March 17, 2009
“Phenomenally accurate forecasts”
Not since Ronald Reagan fired more than 11,000 air traffic controllers in 1981 has the White House dived headlong into a pay dispute. This time, though, it is Mr. Obama who is taking on the workers, and he could not have picked a more unsympathetic bunch. We are referring, of course, to the AIG traders who were gifted with $165 million in bonuses even though their employer is into the Federal government for $180 billion in rescue loans and commitments. From what we’ve read about AIG, their trading desk was not exactly a profit center when the financial system began to unravel. Far from it. But that evidently didn’t stop the company from honoring one of the most hallowed traditions of the financial world – i.e., rewarding employees extravagantly for failure. Why would they do such a stupid thing? If a banker were to answer that question honestly, we know what he would say Because the money was there.
This is the kind of story that makes you wish Hearst were still around to whip readers into a hangin’ frenzy. News reports on Monday said President Obama was going to try to “claw back” the bonuses, which have already been handed out. We predict he’s going to win this one without bloodshed, since he’ll have all the popular support he could possibly need – including from us. We can’t recall a time when we could hardly wait for the likes of Barney Frank to emerge from their lairs, guns blazing. But if this is how bailout money is going to be used, then we say let the socialist tide wash all the sleaze, greed and corruption out to sea.
Five-Star Sinners
With the collapse of the global financial system, there were bound to be sweeping changes in the way banks conduct their business. Congress has already imposed pay caps on some bank executives, and the news media have been taking scalps whenever they spy banking moguls partying in some five-star hotel. But this story is the one that will galvanize the political left, since conservatives probably see it the same way. If there is any editorial support for AIG and the traders, it will likely be found on the editorial pages of the Wall Street Journal. Recall that the Journal rallied behind Dick Grasso when the former NYSE chairman tried to collect $187 million in retirement bonuses and severance pay a few years back. The newspaper argued, with a straight face, that that’s the kind of money an employer has to pay to own Grasso’s kind of talent.
Yeah, sure. If AIG ever wants to rebuild its once-vaunted trading desk, we’ve got 50 candidates who could do the job for a lot less than salary and $165 million in bonuses. Hell, for a thousand dollars a year, they could subscribe to a few newsletters that would have put them on the right side of stocks, bonds and currencies in the first place.
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Rick's Picks publishes a daily trading newsletter for gold, stock, commodity, and mini-index traders 240 times per year. Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers' initials will be used unless express written permission has been granted to the contrary. All Contents © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Tuesday, 17 March 2009 | Digg This Article | Source: GoldSeek.com
