British PM Gordon Brown Gets Smacked

Filling the Soaring Demand for Black Friends :-)

Black Friend Finder
Now that Obama is President, everybody wants a black friend.

Video at FunnyOrDie.com

AIG Executive Vice President's resigntation Letter

From the New York Times:


The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

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.”

Sincerely,

Jake DeSantis

Are we all Religious?

From 'The Road Less Traveled' by M. Scott Peck Pages 185 - 193

"...among the members of the human race there exists an extraordinary variability in the breadth and sophistication of our understanding of what life is all about.

This understanding is our religion. Since everyone has some understanding -- some world view, no matter how limited or primitive or inaccurate -- everyone has a religion. This fact, not widely recognized, is of the utmost importance: everyone has a religion.

We suffer, I believe, from a tendency to define religion too narrowly. We tend to think that religion must include a belief in God or some ritualistic practice or membership in a worshiping group. We are likely to say of someone who does not attend church or believe in a superior being, 'He or she is not religious.' I have even heard scholars say such things as: 'Buddhism is not really a religion' or 'Mysticism is more a philosophy than a religion.' We tend to view religion as something monolithic, cut out of whole cloth, and then, with this simplistic concept, we are puzzled as to how two very different people can both call themselves Christians. Or Jews. Or how an atheist might have a more highly developed sense of Christian morality than a Catholic who routinely attends mass.
...

Usually a person's religion or world view is at best only incompletely conscious. [People] are often unaware of how they view the world, and sometimes may even think they possess a certain kind of religion when they actually are possessed by a far different kind.
...

How do people's religions develop? What determines a person's particular world view? There are whole complexes of determinants, and this book will not explore the question in depth. But the most important factor in the development of religion of most people is obviously their culture. If we are Europeans we are likely to believe that Christ was a white man, and if we are African that he was a black man. ... We tend to believe what the people around us believe, and we tend to accept as truth what these people tell us of the nature of the world as we listen to them during our formative years.
...

To develop a religion or world view that is realistic -- that is, conforms to the reality of the cosmos and our role in it, as best we can know that reality -- we must constantly revise and extend our understanding to include new knowledge of the larger world. We must constantly enlarge our frame of reference.
...

Most of us operate from a narrower frame of reference than that of which we are capable, failing to transcend the influence of our particular culture, our particular set of parents and our particular childhood experience upon our understanding. It is no wonder, then, that the world of humanity is full of conflict. We have a situation in which human beings, who must deal with each other, have vastly different views as to the nature of reality, yet each one believes his or her own view to be the correct one since it is based on the microcosm of personal experience. And to make matters worse, most of us are not even fully aware of our own world views, much less the uniqueness of the experience from which they are derived. Bryant Wedge, a psychiatrist specializing in the field of international relations, studied negotiations between the United States and the U.S.S.R. and was able to delineate a number of basic assumptions as to the nature of human beings and society and the world held by Americans which differed dramatically from the assumptions of Russians. These assumptions dictated the negotiating behavior of both sides. Yet neither side was aware of its own assumptions or the fact that the other side was operating on a different set of assumptions. The inevitable result was that the negotiating behavior of the Russians seemed to the Americans to be either crazy or deliberately evil, and of course the Americans seemed to the Russians equally crazy or evil. We are indeed like the three proverbial blind men, each in touch with only his particular piece of the elephant yet each claiming to know the nature of the whole beast. So we squabble over our different microcosmic world views, and all wars are holy wars."

Is it Possible Global Warming is Full of Hot Air?

“The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduce them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.” -- Gustav Le Bon

"...you have to be suspicious of what people say to you, even when they call them facts. More importantly, you have to be suspicious of what you say to yourself! ... the older we get, the less we know about anything; the more facts, opinions, and ideas we collect, the less sure we are of any of them. Besides, we get more and more experience with facts that turn out not to be so." Mobs, Messiahs and Markets, P.384

Interesting Videos Below ...

We're right, We're right - We are all right!

From memo to Oaktree Clients

"My mother used to tell a story about the shtetls – villages – in the old country where disagreements were settled by the rabbi.

In one, an argument was raging with no possible grounds for compromise. The villagers brought the two parties to the rabbi. “Tell your side,” the rabbi said to one fellow, and he did.

“You’re right,” the rabbi declared.

One of the bystanders piped up: “You can’t tell him he’s right, rabbi; you haven’t heard the other side of the story.”

So the rabbi told the other party to tell his side, and he did. His story was the polar opposite of the other party’s.

“You’re right,” said the rabbi.

“Hold on, rabbi,” a villager said, “the first guy told his story and you said he was right. Then the other guy told his story – different in every regard – and you said he was right. They both can’t be right.”

“And you’re right,” said the rabbi.

The current disagreement over bank nationalization shows that (a) there can be valid arguments on both sides of an issue and (b) it can be hard to figure out who’s right."

Economic Conundrum

From memo to Oaktree Clients

"The impossibility of reaching into the economic toolbox for that one perfect tool is easily illustrated with a list of some of the challenges present today. For a learning exercise,skip today’s Sudoku or crossword puzzle and take a crack at resolving these dilemmas:

• Consumer confidence and spending are weak. We want to stimulate, but we don’t want to replace weakness with hyperinflation.


• We’re willing to drop fiscal discipline in favor of stimulus through deficit spending,but we don’t want to scare away offshore investors from the Treasury securities we’ll issue to fund our deficits.


• We’re willing to distribute stimulus checks, but we seem unable to make frightened individuals spend the money rather than save it.


• In fact, we know consumers got into trouble by spending more than they earned, and now they should build some savings. But whereas in the recent past consumer spending grew faster than incomes, a rising savings rate means spending would grow
  slower than incomes, just at a time when incomes are falling and spending is needed.


• Likewise, with tax revenues down, states and cities have to balance their budgets. One way to do so is to raise income tax and sales tax rates, but this will further depress local economies and increase the burden on their beleaguered citizens.


• We want to recapitalize the banks, but we don’t want to reward past mistakes.


• We’re thinking about buying the banks’ “toxic” assets. But if we pay above-market prices, that’s a subsidy to the reckless (see above), and if we pay market or belowmarket prices, that will further erode bank capital through write-downs.


• We know suspending mark-to-market accounting would end write-downs, but doing so might also reduce confidence in balance sheets and postpone the day of reckoning needed for our financial institutions to reach bottom and recover.


• We want the banks to lend, but we can’t – and shouldn’t – make them extend loans to non-creditworthy borrowers.


• We want to reduce the incidence of home foreclosure, but we don’t want to reward people who speculated by buying multiple homes or lied on mortgage applications. And we’d rather not treat people who bought more house than they could afford better than those who acted prudently.


• We want to make mortgage relief available to those who are unable to service their mortgages, but we don’t want to give people incentives to stop making payments.


• We’re considering letting bankruptcy judges reset mortgage contracts, but we don’t want to tell lenders that loan contracts are no longer sacrosanct, which certainly would deter them from making new loans.


• We don’t want the depressant impact of auto companies going bankrupt and suppliers and dealers following suit. But we also don’t want to pump money into the industry unless we’re confident it can produce good cars at competitive prices.


• We want to see the auto industry “rationalized,” but that means seeing people lose their jobs or have their paychecks reduced, which would spread pain, put stress on benefit funds, and cut into GDP.


• We want taxpayer-supported automakers to use American steel, but (assuming it’s more expensive than imported steel) that will either (a) raise car prices, making cars more expensive for hard-pressed buyers and making the Big 3 less competitive, or (b) require the companies to eat the difference, making it harder for them to achieve profitability.


• We want to curb speculation in derivatives, but we don’t want to make it harder for businesses, farmers, insurers and investors to legitimately hedge risk.


• In fact, we want to prevent excesses on the part of business, but most people don’t think it’s a good idea to nationalize companies or have the government tell them how to operate.

It’s abundantly clear from this list – and it’s only a partial list – that solving the current problem will require compromises and a combination of disparate elements. Some will work, while others will fail and have to be replaced. And some will work with regard to one facet of the problem but aggravate another. Lastly, no one should think that even a wise combination will produce quick results."