Category Archives: Economy

It’s an anniversary
… sort of, right Bob?!

I can’t resist the observation that many financial advisers and professional investors, not to mention financial bureaucrats and politicians in charge of US economy, were self-assuring and content with their inaction as they were watching the economical gauges and technical indicators getting off the scale. Meantime, the wheels of US economy were loosing the air under their butts. Eventually, the wheels come off in the fall of 2008. It’s hard to comprehend that the potential for current situation was not evident some 6, 12, or even 18 months earlier to the “professionals” who should know better, who are paid to know better.

Was it ignorance, arrogance, greed, or all of it mixed together into self-assuring and self-destructive herd mentality? The big picture, long term trends, economic facts and economic context, global perspective and national interests were totally lost and overshadowed by short term thinking, institutional arrogance, and collective greed.

Some food for thought for the future as global forces are rendering the US and US focused investment somehow irrelevant and risky, especially in the long term. Perhaps it’s time to look forward beyond the next quarter and current year, and beyond the horizon … beyond the continent … to identify future opportunities and beacons of prosperity.

Note to self:
Don’t trust the professionals, the consultants, the advisers, anybody, with your money.

Consultant’s
accountability
… an oxymoron?!

Fascinating … sort of … during the last quarter of 2008, Merrill Lynch lost (again) $15 billion out of the pocket of Bank of America shareholders and US taxpayers … CNN Money: BofA: $20B bailout, huge Merrill loss.

As you might recall, Bank of America bought ailing Merrill Lynch in the fall of 2008. The “consultants” advising Bank of America on the wisdom of the deal from the shareholders’ perspective, Fox-Pitt Kelton and J.C. Flowers & Co., took a small fee … of $20,000,000 … for that professional (dis)service.

$20 million bucks for … how many hours of work do you think that represented? Let’s be generous and say 1000, spread out over a lot of people. That means the firms were being paid $20,000 per hour for their work. That’s fine. Everybody has their price, and that was theirs. But don’t you think somebody should get a rebate? Do consultants ever give those? Perhaps not. Anyway, why should they? They did what was required of them, after all, what is always required of such folks.

They told management what it wanted to hear.

Fascinated … sort of ?! Read more about it here: The Bing Blog: Consultants and accountability: an oxymoron? … and watch this in-depth analysis here: CNN Video: BofA’s ‘shotgun wedding’ regret. Not funny … eh!