Tuesday, July 14, 2009

15 year old writes a report for Morgan Stanley (UK)

A Morgan Stanley office in London recently let a fifteen year old intern write a report for them on how teenagers think regarding different types of media.

He really hits the nail on the head about watching videos online from BBC online or NBC.com. I do the same thing I do when I have to watch an advertisement on TV. I get up and walk away, get a beer, use the bathroom, or even surf the internet.

Here's the link to the pdf article from the Financial Times website.

He brings up some good points that relate to probably anyone under 30. He even admits that his analysis only covers teenagers, not young adults.

By all means though, he's no finance wizz-kid (I'm talking to you; fox news/CNN/financial times/BBC/NBC/CBS/Japan in general). So they shouldn't think he's going to revolutionize the way "the established" control the future generations. We're just a little more global-oriented then the generations before us.

Tuesday, June 2, 2009

Because I always love a good Star Wars Reference


A year ago, the big oil companies were bringing in record profits and the public was outraged.  This summer, will we be looking at antitrust cases against companies that fare a little too well during a recession?

Intel was recently ordered to pay 1.45 billion dollars in Europe for giving discounts to repeat customers. Discounts to certain customers violates antitrust laws (albeit European Union ones)?

This article, from the Wall Street Journal, talks about wanting to go after companies that pick up market share during the financial crisis.

It's possible that Walmart could get slapped with a suit because they cater heavily to the middle-to-low income households and prevent specialty stores from succeeding. Apparently upper middle-to-low upper class are now shopping at Walmart and are hurting the small deli shops and local businesses that cater to the upper class.However, aren't antitrust laws set up to make sure people receive a "fair" price?

Heck, maybe Ford will get in trouble for outpreforming General Motors. Even though GM could avoid that by selling vehicles at a loss and using government funds to prop it up...

The author makes a good presumption that nothing will come out of this exept for an increase in litigation costs, but like the Obama White House says, "Never let a crisis go to waste."

EDIT: Apparently part of the Intel/EU case was that Intel was giving the discount to customers that did not buy chips from rival AMD. I still don't see a problem with this.
Cox Communicaitons gives me a discount for using all three of their services (phone/internet/cable).

Wednesday, March 25, 2009

Why I wasn't outraged last week

Taken from cnbc.com here

This is a resignation letter sent to Ed Liddy from an employee who is quitting AIG.

Dear Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:


I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”


Jake DeSantis

Wednesday, March 18, 2009

Lead by Example

"Just as outrageous is the culture that these bonuses are a symptom of, that has existed for far too long: excess greed, excess compensation, excess risk-taking."

"We've got to have tools that under our legal authority we can do something about this." 

-President Obama.

As, Jack Welch put it HERE, the US Government owns 80% of AIG and it needs to start acting like a Board of Directors. This should not be a surprise to us that funds could be used for contracts stating a bonus.

However, the Government runs into problems when you see that in the Federal Economic and Recovery Act of 2009 (passed Feb 11, 2009) Congress placed an amendment (with mind you Sen. Dodd's name on it) that allowed all bonuses agreed upon by companies receiving bailout money PRIOR TO THE PASSAGE OF THE BILL. So, the money received by AIG can legally be used to pay contract-stipulated bonuses.

Open question to Obama: Although you are not the direct cause of the current problems with this economy (as were some of the CEOs of the Big Three not directly responsible for years of bad decisions), and because it will cost America a good amount of money to fix, WILL YOU take a salary of $1.00 each year you are in office until you get it fixed?

I mean, minimum $1.6 Million dollars over your term would cover at least one pet project right?

I await my response either in a salary cut by our President, or (more likely) a Gibbs press conference directly attacking me

Monday, February 2, 2009

19.24 Billion

That is the amount of money that has been considered pork by several Republicans in this upcoming 900 Billion stimulus package. Here is a list from Senator Tom Coburn (R) of Oklahoma.

  • $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Dept. of Energy defunded last year because the project was inefficient
  • $246 million tax break for Hollywood movie producers to buy motion picture film
  • $650 million for the digital television (DTV) converter box coupon program
  • $88 million for the Coast Guard to design a new polar icebreaker (arctic ship)
  • $448 million for constructing the Dept. of Homeland Security headquarters
  • $248 million for furniture at the new Dept. of Homeland Security headquarters
  • $600 million to buy hybrid vehicles for federal employees
  • $400 million for the CDC to screen and prevent STD's
  • $1.4 billion for a rural waste disposal programs
  • $125 million for the Washington, D.C. sewer system
  • $150 million for Smithsonian museum facilities
  • $1 billion for the 2010 Census, which has a projected cost overrun of $3 billion
  • $75 million for "smoking cessation activities"
  • $200 million for public computer centers at community colleges
  • $75 million for salaries of employees at the FBI
  • $25 million for tribal alcohol and substance abuse reduction
  • $500 million for flood reduction projects on the Mississippi River
  • $10 million to inspect canals in urban areas
  • $6 billion to turn federal buildings into "green" buildings
  • $500 million for state and local fire stations
  • $650 million for wildland fire management on Forest Service lands
  • $150 million for Smithsonian museum facilities
  • $1.2 billion for "youth activities," including youth summer job programs
  • $88 million for renovating the headquarters of the Public Health Service
  • $412 million for CDC buildings and property
  • $500 million for building and repairing NIH facilities in Bethesda, MD
  • $160 million for "paid volunteers" at the Corporation for National and Community Service
  • $5.5 million for "energy efficiency initiatives" at the VA "National Cemetery Administration"
  • $850 million for Amtrak
  • $100 million for reducing the hazard of lead-based paint
  • $75M to construct a new "security training" facility for State Dept Security officers when they can be trained at existing facilities of other agencies.
  • $110 million to the Farm Service Agency to upgrade computer systems
  • $200 million in funding for the lease of alternative energy vehicles for use on military installations.

Its a good thing the democrats in congress are looking out for us right now...

Change 2009?

Being without power in Fayetteville for 5 days was rough. But, last Saturday afternoon power was restored to my area. It's good to know that after having power back for 54 hours, SWEPCO decided to go ahead and cut power off to half my apartment complex this evening.

The ice storm labeled "Jan 27 Ice Storm" by many utility companies really wasn't that bad. Only 3/4 to 1 inch of ice in most places. However, falling trees knocked out power lines to much of the NWA area. But these were not trees that have been around generations. Most of these trees were small ones, no older than 10-15 years. These trees were protected by the city because it wanted to be known as a tree-friendly city. They prevent trees from being trimmed around power lines because it exposes lines and it makes for ugly trees. 

The city of Fayetteville, has been a member of "Tree City USA" for 13 years and has only strengthened the grip of conversationalists on this area. To cut down a tree in your own yard, you are required to ask the Urban Forestry department permission. This department is made up of people who oppose growth, push for pointless higher taxes (Fayetteville, when including state/county taxes, has a 11.25% sales tax on hotels, motels, and restaurants), and push for "beautification projects" on the outskirts of town. 

Power companies recommend that small trees are placed no closer than 15 feet from utility lines, medium 30, large 40. By driving around this city you can clearly see, that the city of Fayetteville, does not abide by these recommendations.

In the aftermath of this storm, one thing has become clear; Fayetteville, AR, USA will not be included in the annual listings for Tree City USA. What a shame.  

Just so you know, I don't like to make up my facts. So for your viewing pleasure The City of Fayetteville, Landscape Manual.pdf

It is always good to know that events like the recent ice storm can be drasitically avoided when following proper guidelines given to us by our ultility companies.

And knowing is half the battle.