additional info

Yeah, I got it. You and I need to stop editing. :D

haha but i'm such a stream-of-consciousness poster. feel like i'd be spamming the thread otherwise. course it'd be good for my post-count

woohoo - just noticed i'm up to 15k posts and now i'm a head coach!

that puts me in 18th place on the post-count list - just FYI. means my internet-penis is HUGE

See, that's just a load of crap. The reports back and forth ratting out the politicians also illustrate another partisan state amongst each side. People seem to be more interested in saying "see, the other side does it" rather than saying "the other side does it, but I'd prefer if my representative did not" as I have prevoiusly advocated. Granted, some politicians pay that notion some lip service, but never actually follow through with their promise.

Both sides of partisan supporters are in the wrong IMO. The longer you blame the other side for the ills of the nation, the longer it takes for politicians to straighten up and fly right. Partisan supporters lay cover fire that allows them to continue to screw the general public behind closed doors.

How many times this week have we seen this phrase.....

"An AIG spokeswoman declined to comment."

Where is this spokeswoman and how do I get her job?

http://www.reuters.com/article/ousiv...52H11Y20090318

i'd prefer if my reps did not. i was just presenting the additional evidence for you. i wasn't about to go through and cull out the specific lines from the story in The Nation, figured it'd be more intellectually honest and less cherry-picking to post the whole thing.

Here's another terribly annoying hindsight article. Rep. Wyden is saying that he had a stipulation in the bailout that would have kept this from happening without taxation, but it was stripped from the bill during negotiations........

Wyden: My Bill Could Have Prevented AIG Mess

gah!! damnit!!!

question though - why tax those bonuses above the level at 35%? If you want to eliminate them why not tax them at say 85%? Then again if it's taxpayer money going to pay the bonuses does AIG really care? if the bonus is going to be taxed at 85% they'll just increase the amount of the bonus so the person gets the same amount after-taxes.

Responding to a specific post right after I read it, apologize if any of this is repeating (this thread grows fast).

I mistook your statements, the larger problem is a very historical one... I just want to distance history from sympathy for individual firms. You can save economies without rewarding gross incompetence (or at the very least negligence) in overly greedy and foolish firms.

Do we need corporate bankruptcy reform (they sure pushed in plenty of restrictions on the rest of us recently), certainly. Do we need to learn a half dozen lessons that Lehman makes a great example of, of course. But to say letting Lehman collapse is a failure in my opinion is wrong, it is a critical force in capitalism that bad decisions lead to failure. The cost of sustaining a bad company is always more expensive then allowing new entrants or other players divvy up the market share.

Now on to a few specifics:
- Information access and paying attention to it are my big themes, I'm all for an information revolution, especially in PUBLIC companies (sorry I like capitals). Give a bunch of software dudes like me jobs, and investor dudes like me critical info for making decisions. Its a double bonus for me!

- Barclay's was a sweetheart deal involving slimy executives scratching each others back for individual profit. Its nice to get a huge chunk of assets for a few million dollars direct to one slimeball executive, yay fuedalism economy! I personally think people should be in jail for that one.

- Your three major themes of reform, I agree with wholeheartedly.

- credit default swaps scare the bejeesus out of me. They are not being created properly to perform their hedging purposes, I think the whole process should be marketized and put out in broad daylight, its so backroom and easy to exploit.

- In general (not on your post) I think we need a reform of the entire stock system from bottom up. Start at insuring that shares are air-tight being transferred as needed and accounted for at all times so that any time you say "I am buying physical shares" you get physical shares. We need to cut out anything that allows crap like phantom shares to get into the system. Also there needs to be an info stream on how companies financial divisions are loaded. Even a simple high-level, ya we have X% in derivatives with total loss exposure at Y billions... something to serve as a giant red flag that if all shit hits the fan this company is flat out broke. Of course most companies would have a Y at several times their net worth based on how loss exposure is calculated... so it could be a mess.

Anyhoo, I'm for orderly destruction of firms, I don't think you just pull the rug out and expect capitalism to place everything neatly out the other side. But I am for the destruction of firms that misbehave, there is no reason not to give an opportunity for hungry small companies to get into the brokerage business falling nice conservative strategies.... especially if these big companies keep drifting into the exotic profit seeking that we have been seeing. Big is not always better, economies of scale applies to assembly lines and bulk negotations, not to pools of electronic magic money.

I get nervous of the use of taxes or ex post facto laws... I think there is plenty of guilt on existing laws in the books that they can go after some of the worst of this crowd, but unfortunately at some point we are going to have to let some of the jerks get away and pass laws so it does not happen again. I'd rather we get serious about enforcing law, and following the rule of law the way it was meant to... then going all postal and trying to find tricks after crap hits the fan.

We don't need reactionary law-makers, we need constant vigilance! (helps against dark wizards too)

That may mean that some things were not illegal at the time and a bunch of people that did slimy stuff, are indeed innocent. That said, if there is a sliver of a fraud case I'd say go after it full-steam and beat the poo out of any that can be beaten.

Also I would mention that the government doesn't need to fund anything, at this very moment they can say "you know what, fuck you AIG, not one more dollar"... the company would collapse overnight. I think they need to threaten how they are going to exercise their funding power and that supposed 80% stake in the business (I'd say the government should actually go in and use the corporate system to vote in reforms, a novel precedent might result and we could see it ripple across other companies with fed up shareholders).

major moves into the credit markets by the Fed today. should see mortgages shoot downwards towards 4% this week and maybe stay there for a while. With the incentives for first time homebuyers we could see housing be through all this crap by Q1 of '10.

That being said I still see a retest of the lows within the next month in equities.

I'd love to go buy a new (used) car right now.

Is there legal precedent for this? Has the government ever done anything like that before? Seems odd that ex post facto laws are prohibited, but ex post facto taxes are perfectly fine and acceptable.


Quick intro to American politics: Most politicians do not care what the Constitution says, and some probably really don't know what it says either. :)

Good post segment right here, pretty easy to miss with the 1am timestamp though.

Damned if I see all the handwringing over these "bonuses" as much of anything other than jealousy. I've opposed virtually all of the various bailout packages & components from the get-go but if you're going to do them then this seems as valid as anything else that's being done with the money.

Government: "How dare you pay out those bonuses with taxpayer money after we gave you the money without making sure that you didn't have such pre-existing obligations nor did we condition the acceptance of the money on your not paying such bonuses!"

Me: "sigh."

And all of these post-hoc ways of trying to invalidate these contracts sucks. They are shitty contracts. OK. So what? The rule of law honors shitty contracts, too. Don't buy AIG in the first place if you don't like the pre-existing obligations it has on its books.

If the default is now that America is a nation of laws unless and until it hits a crisis (9/11, financial meltdown, etc.), then we might as well just admit that we are no longer respect the rule of law's primacy.

An example of this in the past was the oil windfall profit tax passed back during the Carter/Reagan years.

Calder v. Bull is the seminal case that defines ex post facto as pertaining only to criminal punishments. Where this case might possibly apply is with the Bill of Attainder clause, which prohibits singling someone out for a punishment. Therefore, if Congress passed a law only taxing AIG bonuses, then that very would could be struck down. There are exceptions though, such as a case vs. Richard Nixon when Congress passed a law directing himn to preserve evidence. The Supreme Court allowed that one to stand.

Gotcha. Danke cartman and larry.

looks like I was right about the market in the short term based on the plethora of good news coming in although I didnt expect the Fed's bomb dropping today so it would seem that I pulled out of GE at a smaller profit than I couldve but on my other holdings they should go up to hopefully make up some of the losses (again in the short term) that Ive suffered along with everyone else over the last 2 years.

I still think we come back down from an eventual bear market bounce ceiling but it sure feels good for now. I'll wait to continue my purchases on the eventual pull back I see.

One thing people aren't paying attention to is this:

The FED dropping the bomb today was not a GIFT, they did it because they see internals that do not look good so on one hand it may feel good that theyre helping us move the truck out of the rut but they are admitting that the rut may actually be a monstrous ditch.

Has anyone heard any AIG-style rage about the Fannie bonuses?

Fannie plans bonuses of up to $611K for 4 execs - Yahoo! Finance

I'm expecting all sorts of random movement around the first quarter reports, but I still think on a long term horizon some sectors are due for a lift. I might prepare some looting on companies I know will have bad first quarter numbers, but a lot of my movement has been locking up various longs (or preparing to load up long after the reports do their damage). Likely thing to happen is my short term shorts will end up funding a whole bunch of long buys, my hope is an overall up in the second quarter in my chosen areas.

i think that there is more upside risk surprise on the first qtr reports than downside. Underperforming is the new norm so a big beat (like Oracle tonight) will see big ups.

Again, I do see retests of the lows over the next few months. Ill look to load up some more at some point just to help the averaging out since at some point over the past 8 months I said screw it to averaging in when I kept getting killed so while I am averaged in Im not averaged in as well as possible because I just was so confused by the oversold conditions (i mean at some point oversold is the new norm too :) )

I agree with this - a lot of companies imho have been unfairly hammered by the panic and will now spend time steadily recovering as people realise that the sky might not actually have fallen and indeed the current situation might lead to advantages for some companies.

For instance Microsoft (MSFT) have dropped around 50% during the crash - but are still hugely profitable and cash heavy so able to make acquisitions nice and cheaply at present (Yahoo for instance?).

I think a lot of the doom and gloom has been hugely overdone for companies which are largely debt free, time will tell if I'm right or not ...

hence almost 100% of the reason why I hid cash in Goog and Cisco

Looks like I got my answer to this question about who would make the mistake of removing bonus limitations from the bill. It was Christopher Dodd.

Dodd: Administration pushed for language protecting bonuses - CNN.com

I saw that last night. Someone has some explaining to do

SI

Not really Dodd's problem as far as I'm concerned. If his story is correct he agreed to change the amendment at the behest of the White House. IMO the White House is where the 'splaining needs to happen.

Well, it sounds like the administration did that because they felt it wouldn't hold up in court, because it would be cancelling a provision of a prior contract. Sounds like that would be just as unfair as the retroactrive taxation that people have opposed. It sounds like bonuses are forbidden moving forward, though.

dola

Did the author do this on purpose? Heh.

Dodd could have said no. Instead, he changed the bill.

I have a big problem with the idea that we need to cater to the company we're bailing out in that case. If AIG or any other company says they don't want that stipulation with the bailout money, we should pick up the money, turn around, and walk away. They'll come back a few weeks later when they have no other alternatives. How many times have we been told that there are tight restrictions on how this money is to be used? It's nothing but lip service thus far.

Sure, but it's very different to do it on his own and do it on the behest of the WH. As far as the WH jst wanting to avoid legal issues, then come out and say what happened instead of grandstanding. If this came from the WH, don't hide behind an outrage that maybe could have done some good if applied earlier.

IMO, Dodd's getting hung out to dry by the WH.

unless of course the WH counsel tells everyone involved that this would cost 3 times as much to defend in court...HOWEVER

It's basically FREE if you can create an outrage that, due to public crying, gets the company's bonus recipients to return the money on their own. Just saying, sometimes popularism is just stupid ignorance.

I agree. And I'm certainly not naive in regards to the goodwill that Dodd loses by going against the President. With that said, the right thing to do would have been to stick to the original restrictions.

I don't think it's so much the goodwill Dodd loses as the problems it may cause Obama down the line. Senators have enormous power to singlehandedly slow or change legislation. Fucking a guy with that much seniority may cost them later.

Again, it doesn't sound like the original restrictions are legal. It sounds great from a populist perspective, but if people signed contracts that entitle them to x dollars, I'm not sure that AIG or anyone else could really agree to violate that contract.

In retrospect, it sounds like forbidding bonuses moving forward and taxing previous bonuses actually is the best way to go.

There's no court case if you hold to that restriction. You put in the bailout bill wording that AIG is agreeing to these restrictions if they accept the bailout money. If they choose not to accept it at that point, no big deal. They're the ones that have to figure out how to make it work without the bailout money.

I think the idea that these people should return the bonus money is equally ridiculous. These people were idiots for giving the bonuses, but creating a culture of shame to get them to fix what the execs f'd up in the first place is just as stupid.

That's normally true, but we're not dealing with a normal situation here. As Andrew Cuomo correctly stated, without the bailout money, AIG goes bankrupt and the bonuses are likely gone regardless of what their contract states. That's one of the first things that would be negotiated out as part of the bankruptcy proceedings.

It's not AIG that would be suing. It's the AIG executives who have a signed contract guaranteeing them that money. AIG can't come in and say, we'll violate the law if you give us bailout money.

And again this is where we might as well just stop the back and forth because not letting them fail saved OUR asses. Most of the people their probably wouldve found work elsewhere because as stupid as the outcome of the derivative play is, the ramifications of the world's financial intertwinings wouldve been cataclysmic, but execs on wall street see the creators of the derivatives as making a LOT of $ for a long long time. You, and others, are willing to see what it looks like when billions of dollars in counterparty collateral disappears overnight (and has to be written down massively)....I am not.


but it works, for the most part, gets to the goalline, and is free. I'll put my pride and ideology aside to get to the best results for the country as a whole. And what Larry said.

When presented with the option of no job and no bonus due to bankruptcy or a job with no bonus, I think they'd take the job. As you correctly stated, there would have to be a sign-off at multiple levels of AIG to do that.

You oversimplify and underestimate the greed of these people.

wrong. they would most get work....they created a ton of wealth for a lot of people who see them as valuable. Sure it imploded now, but for a long long time, a lot of people who have avoided this destruction see them as assets. What Mike said....they would likely get their money because the Gov't couldnt let AIG fail...the optioni wasn't really on the table as much as you would like it to be.

But I don't totally disagree with you. I agree that there might be due cause to save them. I just don't agree that we should jump right in without weighing our options. From what we've seen thus far, the bailout seems to be favoring AIG by a pretty wide margin. Someone needs to look out for the taxpayers, which was not done in this case despite assurances when the bailout was passed that restrictions were in place to keep this exact scenario from happening.

Which is the reason that the bailout in its current form should have never been passed. If they aren't trustworthy, you have to find a better bill to CYA and keep those people from misusing the money.

oh wow, we definitely disagree...

by ALL of the counterparties getting their trades paid off allows liquidity to flow to you and I. The taxpayer will likely see some if not most of their money back in the next 4 years when the AIG assets are sold off in an economic environment that commands a better price than a bankruptcy firesale today.

your last post, right above this one is you blending two different events together. They are seperate:

TARP was rushed through
IMO it was successful til Paulson Torpedoed it but luckily we were through the ditch
Saving AIG (after learning from Lehman) was the only option so negotiating former contracts under the guise of, "We'll let you fail." is bunk.

And those who fell for that are so incredibly damned stupid that I'm not sure why anybody wanted to keep them around anyway. I have to say these folks who "volunteered" quite possibly are the dumbest bastards I've heard of since ... hell, I don't know when I've heard anything I thought was dumber. Equally dumb perhaps, but not dumber.

For me, that's one hell of a leap of faith you're taking (and with other peoples money to boot).

I have absolutely no doubts about it.

So that makes one of us.

Damn, I'm agreeing twice with JIMGA in one morning. Make it stop. First, if I were one of the guys getting the bonus- I'd say "asses to you" and take my money. Maybe give back a token portion to get the boss off my back, but, honestly- these are not really bonuses like we think of bonuses. They're basically "don't leave the company and we'll give you cash to stay here instead of jump off this sinking ship". Like Flasch said, they'd get jobs elsewhere. That said, if we want to tax the heck out of them, particularly those in the financial instruments division, I'm game.

Also, to one of your other posts, there's no way we, through AIG, should be paying stuff out at 100% of value when they don't have that value. That's just adding to the liquidity problem as people won't move those useless financial instruments until they get full value rather than getting fair market value. You bought crappy valued stuff by extending your risk, you lose a significant percentage.

SI

Face it, our government is in bed with all of these banks and wall street companies. Doesn't matter if you are Democrat or Republican.

Using a sports analogy since this is a sports board. The fans of the Red Sox and Yankees get all fired up about how much they hate each other, sometimes actually getting into altercations with opposing teams' fans. And then after the game who is Derek Jeter more likely to go have a beer with, a Red Sox player or a Yankee fan? Watch as they switch teams anytime the money is right and tell me where their allegiance is.

It's all a game to these Washington guys also. They play "main street" vs "Wall Street" and then at the end of the day Dodd, Reid, Pelosi, Frist, McConell, Boehner, the owners of all forms of media, and all of the Wall Street guys go have a drink and a laugh as we debate Republican vs Democrat. And then when the public starts to catch on to their game they throw us a bone like the millions of dollars of AIG bonuses or the earmarks. So instead of (stealing from Mizzourah's cartoon) questioning the warehouse full of money being moved around we fixate on the relatively tiny crate of a couple of million dollars and feel satisfied when they "stick" it to one the Wall Street guys. In the meantime another one of their friends gets another hundred billion dollars. But we got em! We taxed those million dollar bonuses and showed them!

Ready for more faux outrage? Wait until 2010 when these companies that we will still be bailing out contribute money to both political parties. That will be quite the shock. Wait so AIG still has a millions times more influence than panerd! How can it be? So AIG means more to the Republicans then MizzouBallFan and AIG means more to the Democrats than Flasch? But they debate your talking points all the time! The system can't be this openly corrupt, can it? :devil:

The dollar is plunging and oil is up just over $3 right now.

Surely you mean gas? I don't think oil's been near $3 for a long time (unless you're using a non-standard measure for oil).

I think I want to spoon with panerd right now.

Opps...Meant to say the price of a barrel of oil is up $3.

Gold is pretty volatile, but its up 25% since October (when I started ranting and raving about inflation). I think we're going to see the other side of the commodity killfest of last year... especially because I think people over crapped on otherwise productive companies over fears the economy was never going to buy anything ever again. Some of my Feb/Mar pickups show hope (after initially showing red :( ).

In my opinion the only person who makes any sense on this issue. I love how he asks for more time and gets shut down. And then the guy is an asshole to him again when his time runs out. You know both sides hate him but it is unbelievable that he doesn't have a bigger following with the public who is so outraged at how their tax money is being spent.

YouTube - Ron Paul on house floor: "We create these problems" (03/19/09)

Not a WalMart fan but I'll give them credit where credit's due:

Wal-Mart Giving Workers $933M In Bonuses - Money News Story - WKMG Orlando

They took advantage of the free press being given as part of bonus outrage and turned it into a plus for them. Sure, it's only about $700 per worker but they didn't have to do it and those workers receiving it probably could really use it.

SI

Maybe they should give them better health care instead so 75% of them aren't on taxpayer funds.

I can understand your views on the taxpayer-supported health care, but why do they have to provide health care? It's not like they held guns to their heads to take the jobs.

That does go back to the age old argument of "does Wal Mart put other companies out of business by throwing their weight around". If they're the only game in town, they're the only game in town.

SI

Wouldn't you argue that we, the consumers, are responsible for that. We complain about companies like Wal Mart, but it doesn't stop a lot of us from spending the dough.

I don't mean this sarcastically, because I really don't know, but was there a time, maybe pre-Walmart dominance, that service industry employees received full benefits? And I'm not talking salespeople at Sears, I mean minimum wage people. I find it hard to believe that "Joe's Downtown Electronics" was offering full dental to shelf stockers.

If they were, I still think that our country is better off having cheaper access to consumer goods for hundreds of millions v. a company's employee's getting greater benefits. That seems like a net gain that we've enthusiastically chose. We picked Walmart. They didn't impose their will on us. They're not an evil concious monster. They're merely what we want.

When Joe's Downtown Electronics was in full swing, we didn't have this odd notion that healthcare is a right instead of a commodity.

I actually spend more money not to patronize Walmart. Some things are more important than saving $10. I'm not going to get in to great detail, but I think the Sam's Clubs and Walmarts are responsible for a lot of crap that's wrong with today's society.

There's two relatively nearby Walmarts in Chamblee and Tucker and I've been to them a few times. Not only do they completely disgust me, but they are quite unsafe as well.

When Joe's Downtown Electronics was in full swing, private health care wasn't more than your salary and providing as small benefit as possible.

To the first paragraph, I kindof doubt it. Which is why I think that the argument used is not a good one.
EDIT: Tho miked put in a counter to this

If we want to argue that having a WalMart out there causes all other standards of living to go down by setting a much lower baseline due to their size, then we might have something. I mean, really, this is a company that is responsible for some stupidly high number of our GDP, like 3%.

Tho, why does salesperson at Sears not count? I'm pretty sure we can chalk up a lot of department store ills to competition from WalMart. Circuit City and Comp USA have gone under in the past couple of years due to intense electonics competition from the "higher end" by Best Buy and on the cheap stuff from WalMart. Yes, bad management by those companies doomed them. I'm sure we can find mistakes made by all of them. But if there's no competitor, particularly a strong ruthless one, they still continue on through a market inefficiency. Now I'm pretty sure that's not the right answer but it is an answer and it's out there.

As to the second paragraph- I'm not sure I'm happy that cheaper consumer goods over industry standard higher wages and benefits is better. With free trade, I know that's where we've been going for 15 years but if you could take away half of my consumer stuff yet guarantee me good benefits and a more stable job environment, I might take that deal.


I thought this was along a similar line so I threw it in here. I don't shop much at WalMart because I'd rather spend more money and get more quality. But my tradeoff is that I get less stuff. I'm comfortable with that but I know others aren't so that's how people have spoken with their wallets.

SI

What department stores do you go to that give their employees such great benefits, or pay their employees so much more (or is the disgust based on something else)?

There seems to be at least a reference to it in the Constitution:


It is widely accepted that Welfare in this instance means health and well-being, not the current social programs that use the moniker.

It is only partly due to their past treatment of employees (you know, all the class-action suits they have pending and have settled). We're supposed to believe they changed their ways.

I'm not going to really get into the rest of it as it tends to generate some controversy (sociological, environmental, etc). I don't too much shopping for stuff, let alone at Dept. stores. I'm quite certain I support some fairly bad practices with some purchases that I need (like my computer for work, shoes, etc) but I try and avoid what I can avoid.

I think Americans have decided we don't like salespeople. In the old days, a guy with a shirt and tie at Sears would sell you a TV, and he'd get a commission. But these days, for all kinds of reasons, we prefer to skip that step (for example, we can figure out what kind of TV we want from the internet).

So get rid of all that customer service that nobody wanted to pay for and we get Walmart. Walmart employees aren't asked to do as much as the Sears salesman did back then. You don't need a high school diploma.

Some people still want customer service - but a lot, like me, really don't want the help, I'll go in there, get my shit and leave. So I'm glad I have the option not to pay for "customer service", or any kind of employees that don't need any particular expertease or skill.

If I'm feeling charitable, I'll give money to the Idaho Food Bank. I'm confident they'll do more with the money than Target v. Walmart (or whoever the "good" department store is).

These days, the Sears salesperson sells you something nice, and he barely pockets any money whatsoever. :( 1% on most items, I can't believe I still work there.

I think we should go to two stores:

Store A: The employees stock the shelves and do security (maybe man the ever decreasing number of cash registers), but you are on your own.

Store B: Someplace that actually trains and pays their employees to help out.

Watch inevitably the masses throng to Store A for even a 10% discount, all the while bitching about how its such a sucky place. Even if it says in big letters on the side of the store: "no customer service, cheap ass prices"

I personally would pay some sort of fee just to have more that two cash registers open at my local super-duper mart when I go to checkout. The last ten times (and i go so rarely this covers months) I've had to wait in a 6 to 7 cart line if I actually buy more than a few items. And if I buy a couple of things I have to wait in the pooled line for the self-scanners, which would go crazy fast if you didn't have complete fools trying to use them, or people trying elaborate junk that the machine chokes up on and requires a cashier to look at anyway. Or those severely testing the 12 item limit.

Or I would pay for the people at Best Buy just to shut the hell up. I won't go there because I'm sick of them trying to sell stuff you don't want or need, too slimy.

:( :( :(

With the internet, online shopping is also putting a big dent on sales people.

What exactly is "quality" that other stores have that Wal Mart has (I'm not talking about a low-end end TV compare to a high-end TV, ect.)?

If you need a job, here you go:

Pole positions: Strip club holds job fair - U.S. business- msnbc.com

I was reading something the other day that makes sense to me.

I wonder if Congress' current power grab by trying to take back the AIG bonuses will end up becoming the Democrats' Terri Schavio: A naked abuse of power by Congress that seemed to have political support at the time, but the more people examine it, the more it will seem like, "Damn, I don't know if I really want Nancy Pelosi/Bill Frist managing my day to day affairs."

Corporations are going to have to give higher executive bonuses to account for the risk of government appropriations.

Damned if I see corporate welfare, taken straight from the hands of shareholders, being much better than government welfare taken from the hands of the taxpayer.

If there's a legitimate need to pay those workers more then they'll be paid more, that's how things work. But in the case of Wal-Mart that ain't likely to happen since there's no shortage of barely skilled labor to cause the cost of supply to go up.

My incentive to talk someone into anything more than the bare minimum they need these days is nil. We're basically to the point where we downsell even, just to attempt to move overpriced warranties on TV's. I mean, we got this really nice line of Samsung LED LCD's in the other day(like 1.1 inches thick), and I can't foresee a situation where I'd even attempt to sell someone on one. No incentive to me, cause I make more money selling like a 1299 tv and getting a 279 dollar warranty than I do selling a 2999 LCD with no warranty.

In the past, where I actually got more money for stepping up people, I would worry first about what piece of nice high end stuff I'd sell them. Now it's a play to nickle and dime them into stuff they don't need, otherwise I get yelled at. It's basically a daily crisis of conscience with me, as to how I can continue to work for such a slimy company, that expects its workers to be slimy as well. In the end, the customer buys something less than they probably want. It's really a fucked up system, if I was a bit more creative I'd write a book about how fucked Sears is. How it's seemingly better to sell nothing at all, instead of selling low margin stuff.

I was thinking specifically to food but there are other examples as well.

There were a lot of people in Lawrence who shopped at the WalMart super center. I never understood that because prices at the other grocery stores in town were pretty good, especially when compared to now living in Richmond. There were 3 levels of grocery in Lawrence- low end (Checkers), middle (Dillons, a Kroger store), and high (Hy-Vee, oh how I miss them). But WalMart always had so many people buying there and they had worse quality produce and meat than all the other stores.

Yet there people were, buying week after week. I'd rather have non-bruised fruit, non-brown lettuce, meat that hasn't been on the shelf for weeks, etc. And you can't get that every week at any place as some stuff is in season, but, on the whole, WalMart was on par with the cheap store in both price and quality and well below the other two. And we're not even talking about service. Yet, again, there would be as many if not more people at WalMart's grocery sections than the other stores. I just never understood that.

But how about comparing things that get you value (i.e. not luxury items but comparing like for like). Think a cheap piece of crap set of tupperware for $10 that will wear out in a year versus one that will last 4 for $30. Or a cheap $5 pillow that will be flat in a couple of weeks versus a $25 pillow that will hold up for months or years. Again, I try to opt towards the latter if I can. Or, for my work shoes, I'll spend a little more and expect them to last for a year or two whereas I go with cheap, crappy WalMart level shoes for running and they're lucky to last a few months.

SI

Must be situational. Here the W-M has the best bakery selection in town, the second best chain grocery meat (i.e. not counting the one specialty butcher shop in the equation). The produce lags behind the others, namely two Krogers & a Publix, but I don't buy produce at WM because of that.

But when the everyday price of Maxwell House coffee is literally half what the others are charging, when the sale price of 2-liter Coke/Pepsi is $1.00 each instead of $1.50, when WM has the largest variety of Little Debbie snack cakes, etc etc, then they're going to draw a body count.

Best I've been able to tell if you really want to minimize grocery cost then you're going to have to selectively shop at least two stores. Who is cheaper on a single trip seems to come down to what your usual shopping cart contains. Here in Athens if you're into prepared food then Kroger is your primary with Wal-Mart for "essentials" like coffee & Cokes. If you're into heavy duty cooking with your own ingredients on a daily basis then it's Publix for the best stuff & Kroger for the more basic stuff. And so forth. What you buy most seems to make the difference in which store is cheaper for satisfactory quality.

I've got a friend in Dunwoody (wealthy Atlanta suburb) who swear by Wal-Mart for best grocery deal, lots of people where I grew up (exurban now)
do too. I swear I consistently get the best overall deal at Kroger, other people here in Athens seem to love Publix. The difference is what we're buying.

That "if I can" part is what I think you're underestimating. I don't really see that many people shopping for tupperware or pillows at Wal-Mart buying the bottom end/knockoff/generic stuff that see the higher stuff as an option.

The Walmart near me is so bad I avoid it if at all possible. I'm willing to pay the extra couple bucks to go to the Super Target, which will have more than two cashiers working on a Saturday night. Standing in line for 30 minutes is not worth the saving IMO.

I find stores like Target and Wal-Mart are very fast when it comes to the check out lanes. Even the ones that have a cashier vs self checkout. Also, not everyone that works at those stores are idiots. The Target staffers seem to be pretty knowledgable in general.

Quality is a hard sell these days. It seems the herd is programmed to 'discount' shopping, even if the numbers are completely gamed. Such as 75% off sales where the final price is 10% less than another store you can the exact same product year round at a stable price, in the color/style you want too.

Walmart actually costs more than our local superstores (Meijer, IMO) and has worst selection, but to be honest, for a lot of perishables you don't really need quality. And given you can sell non-perishables with sticker price games and low quality, or the crazy 'contract' crap Best Buy shoves on you... I'm not surprised that eventually we are going to end up with a two tier store system where the masses go to the Wal-marts for every thing, and the fancy pants go to some high-end store designed to keep out the riff-raff with higher prices.

I personally would love to shop at a third option, the electronic futuristic style store that you go in and get a spiffy little toy that tells you where everything in the store is located and all the deals. Mmmm... shopping carts with computers built into them, that scan the contents of your cart instantly and ring up to charge to your debit card with one signature.... drooool.

I'd basically pay a higher price for time. If I can get what I want crazy fast I will steer clear of the Walmarts with there measely penny savings and finish my shopping with a 1 minute checkout, automatic readout of targeted coupons/discounts (go ahead and big brother snoop the hell out of my shopping habits in your store, if it means I get an automatic reminder when peanut butter or Mountain Dew is cheap I am all for it), able to look up info and maybe even reviews on products on demand.

I think that last paragraph probably has a lot of merit. I can only speak to my own circumstances. I'm not making money hand over fist by anyone's measure as my wife and I pretty much make the median income (for dual earner households). But we have no kids and we've been furiously paying off school and other debt over the past couple of years. So, we're fairly comfortable but nowhere near excessive. I realize others aren't nearly that fortunate. If we had a kid or one of us were unemployed, it would be a different story.

Back to the grocery anecdotes- I'm 100% with you about needing to shop in two places (or more). In Lawrence, we used to get food ads so we would get the sale stuff at Kroger and then everything else at Hy-Vee. Here, we have horrible mail service so our food ads get here on Friday sometimes or usually Saturday for sales that end Saturday- it's very frustrating. In general, we hit dry goods at Food Lion, a warehouse style store like HEB/Food4Less/etc, and then produce at the Kroger or Ukrops since the quality is much better. Some weeks, we hit up a famer's market type store for produce, drop it off at home, then go to Food Lion and Ukrops or sometimes just Kroger (as they do a decent job).

Also, I think people really don't pay attention to their grocery bills that closely so I don't trust a lot of anecdotal evidence (which is, of course, the most valid evidence ;) ). You seem like you'd pay attention, but you know what I'm talking about. People see that they can get one thing cheaper at one place and think it's automatically cheaper.

Hell, I think Kroger lives off of that with their membership card- their sale stuff beats the sale stuff at most anywhere else. But, they get sneaky with other prices if you don't watch it. Take advantage of that- get their equivalent of loss leaders but don't put on blinders because you're too lazy to go to another store.

SI

I don't know what *cough*CircuitCityClearance *cough* you could be referring to...


That's what I'm worried about because I used to camp in that middle ground and they are quickly disappearing.

SI

Actually I agree with this, I have done increasing amounts of shopping at Target. Had to fill some prescriptions there, got in, got out, was happy. The local WalMart and Meijer though are terrible about this, especially on crazy Saturdays where they have herds of people and no one working, doesn't even make sense.

Target's computer games also happen to be close to the food... so I'm definitely noticing a change in my shopping trends just as a part of comfort/amusement level, but I also have years of habit in the way (must undo my own programming, eeek, get out of my head consumerist mindwashing!). Doesn't help that my driving pattern goes right by a super store, which along with chineese food, bars, and gas stations tends to have a high correlation. I'm too much of a creature of routine, although one more 5 minutes shopping and 25 minutes in line may be enough for me to give WalMart most unfavored store status.

EDIT: I will say though I have never received rude treatment at those stores, which is about the only thing that gets me to outright band a place. Even when its busy, the workers generally were doing their best to be polite and help people do their shopping. It is management and their incessant tomfoolery and bad policies (like the contract pushing, or chopping costs to the point where there are just not enough workers to get things done) that are causing me to outright blacklist segments of the retail sector.

I've worked at a Walmart close enough to recent memory, I know that half the time a register is empty is because someone is doing three jobs at once. Although I was the electronics geek who would go all out to find the last cheap TV hidden in the backroom rather than just give up. But I also was probably too principled to be there for long, I was perfectly happy to tell people which discount brand had a good failure rate, and which would break at the drop of a hat (if they asked, did not want to come off as judging what you purchased or trying to upsell). Or say straight out I have no clue what the difference is between X and Y on some obscure piece of equipment.

I think there is a market out there for well staffed and well trained (I was not really well trained, obviously) stores, but I think it won't succeed as a business model until we get stores on the information superhighway path to differentiate them from the discount service. Technology to lure in the first time, and comfortable quick service to keep any of them with more money than time around, and let the masses wait in line for an extra 5-10 bucks off their cart.

Target tends to be fairly fast. WalMart both here and in Lawrence was slower than mud, in terms of checkout.

SI

Have you tried the website for the chain(s) you aren't getting the circulars on time for? Quite a few of them have their ads searchable by zip code so that you're seeing the right one, that might alleviate some of the aggravation.


Oh that happens big time for sure, my parents are bad about that with groceries I think, although my dad is actually where I get some of my more anal shopping tendencies (checking price per unit/weight, consistently checking use by dates, etc).


Sneaky? Heck, with everyday prices at $9.97 for Maxwell House vs $5.49 at Wal-Mart I don't even think they try to hide it anymore ;) I'm not remotely a fan of those card programs but Kroger's happens to be one that I can use to great advantage, only one ever really. That's a shopping pattern thing, they tend to loyalty discount a lot of things I buy anyway, so it works great for me. My average there is between 25% & 30% off every $100-$150 shopping trip, other places I'd be lucky to get $5 saved. The trick to those, for me at least, is to avoid buying categories you wouldn't buy otherwise but be sure to hit things that you were going to buy anyway. And keep an idea in mind of what the regular prices for things are elsewhere in order to avoid screwing yourself.

Of course it probably bears noting that none of the four different groceries we shop at are really off our beaten path, so there's none of the wasted time or gas that goes with chasing bargains sometimes. That makes our shopping style a lot easier to do than having them be on opposite sides of town or in a bad traffic pattern or something.

I don't think this particularly means anything larger but I thought it was anecdotally interesting anyway. 8th bank failure in 7 months in Georgia as the feds took control of a small three branch bank in the south metro exurb of Stockbridge. The odd part was that it was the first case here where the FDIC couldn't find another bank to take over, meaning the FDIC will be issuing check to depositors on Monday. Of the $270ish million in deposits all but $770k are covered by the insurance.

It strikes me I never gave you a response here. Days slip by.

Here are a couple of reasons why I think Lehman failing was a mistake (and admittedly, some of these are bigger picture, rather than Lehman specific)...

1. Immediate Mess and Turmoil--Lehman's bankruptcy caused an immediate lock up in most of the interbank lending markets. I think a lot of people would argue that pushed us into a deeper recession and was an unnecessary set back that added time and trouble to any recovery. It took a while for Main Street to feel the effects of that, but it did hit pocket books in hidden ways (overnight STIF in mutual funds was essentially non-existent, for example).

Another immediate mess symptom was that the market depreciation and Lehman defaults caused the Reserve Fund to break the buck (first money market fund to do that in 15 years).

The retort here is that it's the market and there's risk, etc. I get that.

2. Inconsistent Policy--Why did the government save Bear last March, but let Lehman go? Why save AIG a day later? What is too big? I think a valid argument is that the real mistake was saving Bear in March, but once that was done, I'm not sure there's a good purpose in making an example out of Lehman. I think that led to an increasing lack of confidence in the goverment and a general sense of bewilderment in the market.

3. Bad Policy as a Result--This may take a while to sort itself out, but the regulatory environment will change and some new regulations will be ridiculous, uncoordinated, overbroad and ineffective. This is one area where it may not be Lehman specific, but more industry wide. We're likely to see some wacky things come out of various regulatory bodies.

(Since you mentioned credit default swaps, I'll give you one very specific example. You might remember some press about the New York insurance commissioner looking to regulate credit default swaps. He announced a plan that would require "Covered CDS" (when you buy protection on a bond you actually own) to be treated as an insurance contract forcing anyone who sold Covered CDS to register as an insurance broker in New York. That makes some literal sense--when you own a bond and buy protection on it, it is like insurance. But, it makes absolutely no sense if your goal is to reign in some of the speculation in the CDS market because you're leaving unregulated Naked, or uncovered CDS, where protection is being bought and sold without regard to whether or not the underlying bond is owned. To their credit, New York realized that this regulation would add a lot of bureaucracy and paper work without really addressing the problem, so they withdrew their proposed regulations. Quietly, however, the state of Missouri implemented identical regulations at the start of the year. It received no press. So, now, if you're a Missouri company or pension plan you have to follow an ineffective and burdensome regulation put in place by folks who don't understand what they are trying to regulate.)

I fear that folks in Washington or NY aren't much better and we'll see some silly things that don't really address the issues.

4. Bankruptcy Delay--Non-consensual bankruptcies add delay and freeze assets for increasingly long periods of time.

5. Bankruptcy Games--We discussed this one before. Barclays deal. Executory contract cherry picking, etc.

6. Power of the short monsters--There is a theory, now backed by some evidence (though any transparency on Lehman is very slow to come by) that Lehman's balance sheet wasn't comparatively as bad as any other bank on the street. Instead, they were a victim of slowly eroding confidence brought on partially by speculative shorting of their stock. The erosion of confidence builds and folks stop doing business with you and all of a sudden the problem is real. Anecdotally, I know of at least two very large buy side firms who traded away from Lehman in the weeks leading up to the bankruptcy. Were there real reasons for doing that? Absolutely, but it was also in part driven by rumors and fear.

So, we get to the point of whether these damages from the BK outweigh its benefits or the costs of the alternatives (propping up Lehman, forcing a sale). I think it's absolutely fair to come out on different sides of the coin on that argument. And I don't deny that there are some good lessons or benefits to be had from Lehman. Hopefully that is a more fulsome answer. In the end, we probably agree to disagree. The good news is, we can probably debate this one for years to come.

Ya its a pretty complex debate, heck I'd have trouble just dealing with my two internal halves (the practical and theoretical side of me).

I do think Bear Stearns was a mistake, it was essentially a government backed merger, which in my opinion is awful for taxpayers and the economy in the long run.

In my opinion an orderly response to Lehman would practically involve more of a freeze than a straight up collapse. If there is an event significant enough I think as an extreme emergency power the government should be able to put a halt on it being traded out of existence (you really can't stop the trades, but basically freeze the official price to avoid margin call situations that force squeeze sales). Sort out the balance sheet, and where necessary either wipe out the company in an orderly fashion, or publish a corrected set of figures and resume business. The problem is you really can't stop mass panic and fickle investor/consumer confidence, all you can do is stabilize the system so that true long term investors have a chance to say: "ya the assets are there, the stock price is going to be hammered after the freeze, but long term at some price it is a valid buy".

I do not think you have to inject money or bravado into a company in a hatchet job trying to put the genie back in the bottle (like Bear which was moronic on so many levels I don't know where to start). Sometimes shareholders need to be wiped out, it really does not matter whether it happens in a crazy market process driven by panic, or a government freeze where the price instantly drops to 0 afterwards. I do not think we should reward people just because they have the ability to quickly exit their money out of a company (anyways someone has to buy those shares being sold anyway... I'm nervous most of those buys during downslides are actually being subsidized by the pools of money from the masses to cushion big movers).

The point is we need to let these giants fail so we get a more diverse finance industry with more firms so we do not have such an easily destructible house of cards. The policies the government has been pursuing will inevitably lead to more giant 'impossible to fail' banks with no respect for risk. I really do not think they will learn their lesson if the cost of failure is that the government sponsors a mega merger that will give them even more power during the next boom period.

We don't need big banks, I'll argue all day that the critical functions of banks are better served by many smaller specialist banks that are more directly involved with the real economy, than golden tower elitists who have lost touch with reality and are able to harness massed pools of dollars they don't know what to do with it (so they buy imaginary things like wild derivatives and CDS, instead of funding smart home loans, small business, and other more personal services).

I am all for stopping mass turmoil, unfortunately I think you do that through controlled decapitation of companies, not propping them up. In fact, I think the stock market has proven that policy is complete fallacy over the last year (even healthy companies are seeing their stock chopped to a quarter or worst, some have the cash to pay dividends but need to cut them simply because it makes no sense to give such a yield to panic discounted shares).

I used to love shopping at Wal-Mart when we lived in Arkansas. But, down here in Florida, I've not been impressed. I avoid it when I can, just because its always crowded, the staff is generally unhelpful and sometimes downright obnoxious, and the quality of the merchandise, in particular food (especially produce) is second-rate. I'd much rather shop at Publix for groceries.

i think your definition of stopping mass turmoil and the organized unwinding Im seeing are probably close to the same things, no?

oh and nothing ticks me off more than their 4-6 self service checkouts and then only havbing one or in some cases none open. WTF? Although I do find solace in the fact that by using the cashier Im keeping her employed for a while anyways.

In my opinion, the real reason those AIG bonuses are being paid:


http://www.reuters.com/article/newsO...BrandChannel=0

Essentially, they are being held hostage, if one of those traders for instance came out and worked with an information hawk like myself we could pretty much shed a lot of light on how screwed they really are and cause them trouble.

In short, they want to restrict information to the people and they are using millions of dollars of the people's money to do it, how grand! Surprised it finally came out in a public article.

I do not think we are seeing an organized unwinding, we are seeing a messy game trying to keep the stock market gamers alive (on all sides, evil short monsters, insiders, and the poor unfortunate public). I think if it crosses what I'll dub the 'Lehman threshold' for now, that all the games should be suspended and the numbers completely unwound and made entirely PUBLIC.

This means as often as not the price will go straight to 0, no passing go, no collecting your golden parachute (either contractually or by offloading your stock with a taxpayer subsidy like some execs have been doing, watch the insider trading on some bailout firms....).

We might have similar goals Flasch, but I'm very particular in having a precise attack strategy on resolving them, and not letting the stock market profit off the misery. Yes, this may have effected my ability to profit off the misery as well (I did not short Lehman, although I did short Bear... but mine was a long standing short made well before the bailout scandal). Mostly, my idea would be to kill off the insider short term super shorters or phantom stock creators, by making it impossible for them to find buyers on the market for a stock they know is about to go bankrupt. You can't stop games set up too early in advance, for instance shorting before the freeze occurs... but in that case I think we use good old fraud and insider trading investigation techniques during the freeze to hunt down illicit mega shorters and sieze whatever assets can be grabbed.

You'll be surprised the firepower you can bring to bear on these clever schemes if you shine a whole lot of light on it, get lots of data in the public, and actually do some investigatory work.

Instead, the government is subsidizing the companies, besides the distaste I have for bailing out incompetence, it lets the 'forces lurking in the shadows' (if you believe they exist) get away with their crime and cover their tracks with generally big pools of fund money and taxpayers sacrificed as the goat. The strategy is wrong on so many levels and easily defeated by even a simple player, and we need to combat it before these clever crooks do more damage than even they can understand.

I also think the way you take care of massive toxic balance sheets is to get it all out in the public and unwind them in plain sight, not backroom doors through AIG as a surrogate. It is an easily obvious corruptible grease machine, and they know it, that is why they did their damndest to keep it hidden, even after its leaked out into the news they are fighting tooth and nail to keep it private or at least delay until the damage is done or the public loses interest.

EDIT: I'm not on my machine of doom right now, and I hate this source, but a quick bit on AIG insider trading for instance, 6 months, sorry I can't vouch personally for the accuracy on these:
AIG - American International Group Incorporated | AIG Stock Quotes | TheStreet.com AIG

Hell I'm anti-AIG today apparently, and have Google to fuel me, so here is another article (possibly biased) about my whole rant of government subsidy leading to inefficient markets:
http://www.bloomberg.com/apps/news?p...szA&refer=news