Wednesday, September 17, 2008

Fuld's Gold

There are many appealing aspects to the collapse of Lehman Brothers. The sight of braying City Boys on the pavement with their potplants and putters for one. For those of us with a pinko-commie-fag-subversive leaning, it would seem that justice is being finally done.

However, there is this guy called Richard S. Fuld Jr.

Let's call him" Dick".

Dick has been CEO of Lehman Brothers since it was spun-off from Amex in 1994. Dick has had a bad year - the value of his options have dropped by some $900 million since the stock peaked last year. However, it hasn't been all bad - he has "earned" (in the loosest possible sense) $466m during his CEO tenure, including a bonus of $22m in 2007. Also, in the (very likely) event that he'll be asked to leave by the new owners, he will be due a $64m leaving package.

Dick didn't see that his company balance sheet was shot to pieces due to the effect of toxic real estate loans. He twice turned down offers of a lifebelt, first from the Koreans, then from the Chinese. Either one of these deals would have refinanced the company and saved tens of thousands of jobs.

While his company has been in meltdown this week, he has reportedly been holed-up in his plush office suite saying nothing while his underlings have tried to save the company. Presumably he's been hiding under his desk, counting his money, crying and calling for his mummy.

He has finally surfaced, and is due to appear in Washington in front of Congress to
“examine the regulatory mistakes and financial excesses that led to the bankruptcy filing by Lehman Brothers,” and “explore the impacts of the bankruptcy on financial markets and the United States economy."
Dick will no doubt blame "short sellers" (as did the Bear Stearns guy before him) and then head off for a very comfortable retirement - he has after all done nothing illegal, and "stupidity" is unlikely to be a valid reason for his new bosses to kick him out of his job without a bean.

Tell me where the justice is in this case ? To me it's another indictment of Free Market theory where the assumption is that "Market Forces" will reward the good and punish the bad.

Buy shares in any company selling Red Tape - governments will soon be putting in panic bulk orders to help regulate their unregulated markets to avoid this happening again.

Oh, and vote Stan.

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