In the Times where someone is late?

Farewell and Fare Thee Well

Farewell and fare thee all well.  Like Haydn, its time for a break so I may return or may not return.  Time will tell.

I've enjoyed writing here and particularly enjoy the feedback.  I hope it was useful.

Adeiu.... and on this day when Tiger's world is falling apart, some bard perhaps:


Being your slave what should I do but tend
Upon the hours, and times of your desire?
I have no precious time at all to spend;
Nor services to do, till you require.
Nor dare I chide the world without end hour,
Whilst I, my sovereign, watch the clock for you,
Nor think the bitterness of absence sour,
When you have bid your servant once adieu;
Nor dare I question with my jealous thought
Where you may be, or your affairs suppose,
But, like a sad slave, stay and think of not
Save, where you are, how happy you make those.
So true a fool is love, that in your will,
Though you do anything, he thinks no ill.
 
by the way, that is the only sonnet with adieu in it.

68 Years and we seem to have forgotten this.

I am going to abandon the financial news of the day as this is a special day in our history.  I watched the morning news and this didn't make the radar and it should.  Perhaps we are now war weary and embattled on so many fronts but it is important and the plain elegance of Roosevelt's address to congress the next day is memorable in that we have certainly regessed from his rallying cry. Again perhaps because we grow sick of wars and wars without declaration now fought almost precisely half a world away in a foresaken country, endless in its prospects and for the most part so out of sight and out of mind of many of us.

Roosevelt said (the next day):

Yesterday the Japanese Government also launched an attack against Malaya.

Last night Japanese forces attacked Hong Kong.

Last night Japanese forces attacked Guam.

Last night Japanese forces attacked the Philippine Islands.

Last night Japanese forces attacked Wake Island.

This morning the Japanese attacked Midway Island.

Japan has, therefore, undertaken a surprise offensive extending throughout the Pacific area. The facts of yesterday speak for themselves. The people of the United States have already formed their opinions and well understand the implications to the very life and safety of our nation.

As Commander in Chief of the Army and Navy I have directed that all measures be taken for our defense.

Always will we remember the character of the onslaught against us. No matter how long it may take us to overcome this premeditated invasion, the American people in their righteous might will win through to absolute victory. I believe I interpret the will of the Congress and of the people when I assert that we will not only defend ourselves to the uttermost but will make very certain that this form of treachery shall never endanger us again. Hostilities exist. There is no blinking at the fact that our people, our territory, and our interests are in grave danger. With confidence in our armed forces-with the unbounded determination of our people-we will gain the inevitable triumph-so help us God. I ask that the Congress declare that since the unprovoked and dastardly attack by Japan on Sunday, 7 December, a state of war has existed between the United States and the Japanese Empire.

And yet another Ponzi scheme

Lawsuits abound as yet another Ponzi scheme unfolds here in South Florida.  Scott Rothstein seems to be another to fall of this cliff and one has to wonder what goes on the in the minds of some of these folks. One particularly has to wonder what goes on in the minds of investors and in particular why people fall for this stuff and with big bucks involved.
This one is a minor humdinger in the grand scope of recent schemes but $1.2 billion is no chump change, penny anti thing.  Now people want their money back but the twist in the tale (tail) is that more than likely all but a little of the money is gone and the recourse will be to get the money back from those he paid, level the field and try and give everyone something back, although at a fraction.  Unfortunately it will take years as Mr. Rothstein seems to have been a major league spender.

Even in my small home town of Westhampton (yes the Hamptons) in New York we have our own version of this. George Guildi, a local attorney got into the mortgage fraud business in a big way for such a little town (he is actually a neighbor of mine).  He and some of his friends including the owner of Magic's Pub (if you remember Breslin's book on Son of Sam and the recount of him driving to the Hamptons for a victim and spotting some potentials at an outdoor restaurant, that was Magic's) went around buying houses with straw buyers and pocketing a lot of the fees and rents.  We are talking $50 million in real estate here and in a town of 1600 full time residents, that is a mess in the local streets.   I guess 50 mil in a small town equates to 1.2 billion in Ft. Lauderdale but I still am constantly amazed that folks think that they can get away with this for any extended period of time.  Mr. Ponzi should be proud of his idea.  As we say in advertising, it has legs.

All hail Bank of America

The NYTimes ran a good piece on the Bank of America's plan to repay the government (the taxpayers).   I'm not an advocate for or against but let's at least look at how they came up with the $45 billion and why.

First the number is huge. Staggering even.  As the street tells it, BOA isn't out of the financial woods completely as of yet so to think in a year or so that they came up with bank profits to that tune of course made me and others suspicious.  Wouldn't the 45 billion be better served as cash on hand for the purposes of banking as we thought we knew it?  More on that later.

First 18.8 billion will come from selling shares of stock.  Last I looked BOA was trading at about $15.60 so they are going to dump a billion shares into the market? Even on a conversion to common stock basis that is a shoe waiting to drop on the little guy who owns but doesn't know to get out of the way of this or how to anyway.   Do I hear the call of dillution anwhere?  Wait wait, it gets better. Most of the remaining 26 billion comes from profits...but not from banking...rather from their trading areas formerly part of Merril Lynch.  Here is what the street said about BOA in general:

Bank of America (BAC Quote) upgraded at FBR to Outperform. $20 price target. TARP repayment will boost equity levels and remove a major overhang on the stock. Estimates also boosted.

The Times went on to write:

"Bank of America executives have insisted for months that the bank’s underlying businesses were far stronger than those of some other banks and that the Merrill merger would pay off quickly. Indeed, Merrill’s businesses have improved this year as Wall Street’s traditional business of trading and deal making picked up. At the same time, Bank of America’s core consumer lending units suffered greater losses as the economy weakened".   hmmmmmm.

Also nested in this is the desire to be outside of regulators or free from them. Remind me if being outside of scrutiny isn't what landed them in this mess to begin with?  Then there is the issue of compensation. How can BOA land a top notch CEO with some federal regulator screaming about the salary.  The answer is easy. Just put up 45 billion dollars and you can pay every and anyone whatever you please.

Probably this is just good business and I'm sure the government (us) is happy to get it's money back and probably BOA can get a hotshot in as CEO and pay him/her a 100 million dollar package to run the ship.  But when the peasants come to headquarters someday as a mob with pitchforks and hoes, spend a little on extra guards at the door because eventually they will come - perhaps second after Goldman - but they will show up.

Hey I can do that...

CNBC had a short segment regarding auto industry management and it brougt the General Motors Institute to mind.  Now called Kettering University it was, until the early 80s, a very special training school for GM engineering and management.

Now that Fritz Henderson has split with the GM board, the reports are that GM will "look outside" for a new CEO.  Amazing.

Things run amuck when business types don't understand the nuances of the core business.  That's a fact and it applies to all business.  CEOs brought in to "set the business right" are all well and good and perhaps their core expertise is in triming waste and streamlining things so the the business management is more up to date.  What that usually means is that 1. people with none productive jobs are let go and 2. people with jobs that are not understood in nuance to upper management are next on the chopping block. Without management that understands the business at its core ... well take a look at GM liquidation stock (MTLQQ.PK).  Berkshire could by it with with pocket change.