and a Merry Christmas to you too.

again, from that Easterbrook fellow:
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Last week, Louise Story of The New York Times reported that Merrill Lynch top executives awarded themselves between $5 billion and $6 billion in bonuses in 2006, based on claims of spectacular gains in mortgage-based securities. This year, it turned out the claims were false: Merrill declared a $19.2 billion loss on mortgage paper, and the 2006 results were "written down" (declared worthless). Merrill was sold at a distress price to Bank of America, and shareholders were clobbered in the transaction. Yet Merrill executives kept the bonuses. As stock prices have tumbled, many financial companies have admitted to cooked books, declared big losses and taken huge write-downs. Charles Prince, who was recently shown the door as CEO of Citigroup, paid himself $110 million in bonuses for five years as CEO, and upon departure, received an exit package worth $68 million which included such absurd perks as a car and driver for life. Owing to bad management moves by Prince, Citigroup's share price fell 60 percent during his tenure, costing stockholders $64 billion in lost value, yet Prince got to keep the bonuses. Angelo Mozilo, the CEO of Countrywide Financial, which melted down as a result of its sale of gimmick loans, paid himself $410 million over the past eight years, plus many perks such as private jet travel for his wife. In the year before Countrywide was also acquired at a distress price by Bank of America, the company's stock plunged almost 85 percent, costing stockholders about $20 billion in lost value -- yet Mozilo got to keep the bonuses.

Very high pay to Wall Street managers is justified on the grounds that they are financial geniuses with astonishing expertise. Instead it turns out many financial industry managers made basic blunder after basic blunder. The 2008 financial markets crash belies the entire premise of Wall Street -- that the people there deserve huge paychecks for incredible skill in finance. Any fool can make money in a rising market by borrowing! But if the rise stops and you're leveraged, you hit the wall. This is the short version of how many Wall Street and hedge fund managers appeared to be "financial geniuses" from 2003 to 2006, then ended up destroying their investors. The financial manager with true expertise knows to avoid bubbles, especially bubbles based on borrowing. Many Wall Street and big-bank managers during the housing bubble were taking wild risks or performing no due diligence -- and when the risks blew up, they got to keep their bonuses while investors and stockholders got hosed. At this point, it's totally obvious the system is rigged -- lie about returns (or take crazy risks), claim a spectacular year, award yourself a vast bonus. When the scandal hits, so what? You keep the bonuses. TMQ's basic question: Why isn't this considered embezzlement, punishable by law? Financial managers have a fiduciary responsibility to act in their investors' interest. When financial managers instead act against their investors' interest in order to line their own pockets, that isn't just cynical -- that sounds like a crime.

Note 1: In case you're wondering, I hold no grudge against Wall Street since I've had no problems -- years ago I took my own advice and kept my money far away from highly paid financial managers claiming to possess incredible insider expertise. Note 2: Here, Robert Chew describes how he lost his life savings by entrusting the money to Bernard Madoff. Why did he do it? Chew had some rich relatives who invested with Madoff, and whispered about how Madoff had a super-secret investing formula. Tuesday Morning Quarterback repeats: There are no secret investing formulas! If there were, Goldman Sachs (which still exists) would immediately buy them.

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it's a wonderful life - NOT! why bother living eh?

well, he didn't like spreading the wealth anyway

from sportswriter Gregg Easterbrook [ESPN.com/Page 2]

Stop Subsidizing the Well-Off: Now that the presidential campaign is over, it's time to ask a question about John McCain: Since he and his wife earn more than $6 million per year, why does McCain take $82,000 annually in federal pensions? (John and Cindy's financial disclosures can still be found here.) McCain earned the pensions, but clearly does not need them. Every pension dollar he pockets is passed on to our children as debt, or subtracted from resources that could be spent on the needy or for rebuilding the country. McCain could have his pensions canceled, or simply tear up the checks. Instead, federal taxpayers, with a median household income of $49,000, give McCain $82,000 a year he does not need.

The Arizona senator is hardly the only person drawing subsidized pensions he or she doesn't need. Many billions of dollars per year in Social Security, military and government-employee pensions go to people who already have hefty incomes. The country has just borrowed insane amounts of money to fix the financial meltdown. Little fairies will not come in the night to replace that money. The national debt must be paid down somehow. Want an across-the-board tax increase? A much smaller defense budget? Drastic Medicare cuts? Social Security retirement age raised to 75? There's only one place where the federal government could take a big step in the direction of fiscal responsibility without causing any suffering or harm -- eliminating Social Security, military and government-employee pension payments to the well-off. Senator McCain: How about setting a good example by tearing up those checks?


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the irreverent blogosphere may consider Easterbrook a blowhard, but he writes some good stuff too.