Thu, Jul 31 2008
PUTTING THE B IN BULLSHIT
This stuff is pure comedy gold. It would be platinum, except that these greedy motherfuckers are bringing the country to its knees and waltzing off with gazillions. Anyways, here's my favorite piece of CEO bullshit:
"Bear Stearns' balance sheet, liquidity, and capital remain strong." - Alan Schwartz, chief executive of Bear Stearns, on CNBC, March 12, 2008.
...and, of course, Bear Stearns collapsed two days later and was bought by JPMorgan Chase with $39 billion dollars it "borrowed" from US taxpayers.
Regrettable Comments by Bank CEOs
by Megan Barnett, Portfolio.com
A look back at nine unforgettable statements by bank chief executives who would strike them from the record if they could.
It's not easy being a bank C.E.O. these days. Just ask John Thain. Nearly every promise he's made to investors since he took the helm at Merrill Lynch has been broken. With the uncertainty in these turbulent credit markets, banking C.E.O.'s would be thankful if they never had to say another word to investors and reporters. But fortunately for us, that's not the case. Let's take a trip down memory lane of the most outrageously regrettable comments by some of the best paid executives in the country.
[Click here for the top 9 Laff-O-Rama CEO Bullshit Moments:]
1. John Thain: Repeating It Won't Make it True
"We're very confident that we have the capital base now that we need to go forward in 2008." - January 18, 2008.
"...Today I can say that we will not need additional funds. These problems are behind us. We will not return to the market." - March 8, 2008
"We have more capital than we need, so we can say to the market that we don't need more injections. We can confirm that we have tackled the problem." - March 16, 2008
John Thain learned the hard way that saying the same thing over and over won't necessarily make it come true. The truth is, Merrill was far from finished tapping the markets. Earlier this month, it raised $8 billion by selling stakes in Bloomberg and Financial Data Services. And on Monday it announced plans to sell $8.5 billion of new shares.
2. Dick Fuld: Do I Believe Myself? No.
"Do we have some stuff on the books that would be tough to get rid of? Yes. Am I worried about it? No. If you have some repricing of these things will we lose some money? Yes. Is it going to kill us? Of course not."
—Richard Fuld, Lehman Brothers C.E.O. last summer, according to the Financial Times.
In fact, the jury's still out on whether or not this credit crisis will eventually kill Fuld or Lehman, but it sure killed Fuld's top two deputies, former C.F.O. Erin Callan and former C.O.O. Joseph Gregory, who were fired earlier this year.
Fuld keeps his on-the-record comments to a minimum, but he made another one in April he may have come to regret. "The worst is behind us." In April? If only.
3. Kerry Killinger: The Mother Lode of Losses
"The mother lode of this company is performing awfully well with record growth numbers coming out of the second quarter. The home-loans business had a challenging first half of the year, but I note that the losses in the second quarter were dramatically less than the first quarter and we think we're on track to get that unit back to profitability before the end of the year even in these challenging conditions."
—Washington Mutual chief executive Kerry Killinger on August 12, 2007 in the San Francisco Chronicle.
Washington Mutual shares were valued at $35 that day. Today they hover around $4 and change. In the second quarter this year alone, it lost more than $3 billion. Killinger hit the mother lode with this one, alright.
4. Ken Thompson: Mortgages Are Great!
"The mortgage market is going to be a great market in this country for a long time. We've got population growth. We've got people who are always going to want to live in homes that they own. It's going to be a great market."
—Wachovia C.E.O. Ken Thompson on CNBC trying to convince Maria Bartiromo that its $25 billion of Golden West Financial was a smart move, May 15, 2006.
There's nothing quite like buying at the top of the market is there? The Golden West deal, of course, turned into an absolute disaster for Wachovia's balance sheet and the deal eventually led to the ouster of Thompson earlier this summer.
5. Martin Sullivan: How to Get Yourself Fired
"But because this business is carefully underwritten and structured with very high attachment points to the multiples of expected losses, we believe the probability that it will sustain an economic loss is close to zero."
—AIG chief executive Martin Sullivan, speaking to investors on December 5, 2007 about the firm's portfolio of credit default swaps.
Rule number one for finance chiefs: Never try to estimate potential losses on your investments. Rule number two: Never say the losses will be zero, or close to zero. AIG went on to report $13 billion in losses before Sullivan's probability of remaining chief executive became less than zero. He left in June.
6. John Mack: Bring It On, Risk.
"Well, number one, I think this firm has the capacity to take a lot more risk than it has in the past. So from that aspect, we're really using our talent in a more productive way than we have had in the past. I am comfortable with the risk...I think we probably have one of the best overall risk managers in Tom Daula, who oversees all firm risk, and also Zoe growing up on the sales and trading side, mainly trading side risk management, it's a very strong combination. So I'm comfortable with it. Do we take a lot of risk? Yes."
—Morgan Stanley chief John Mack at the April 2007 shareholder meeting.
Careful what you wish for there, Mack. Zoe Cruz's group ended up taking on so much risk it lost $3.6 billion on a single trading desk in 2007. Mack's confidence in Cruz also fizzled, and she lost her job as part of Mack's effort to clean house earlier this year.
7. Ken Lewis: Seeing Value Where There's None
"We believe that in the current turmoil the stock market has been underestimating the value in Countrywide's operations and assets. This investment reflects our confidence in their business and recognizes the importance of the company in providing home financing across the country. We hope this investment will be a step toward a return to more normal liquidity in the mortgage markets."
—Bank of America chief executive Ken Lewis in an August 22, 2007 press release announcing a $2 billion investment in Countrywide Financial.
But sometimes Mr. Market is right, Mr. Lewis. Countrywide continued its downward spiral until Bank of America announced plans in January to rescue it by acquiring it for $4.1 billion in stock. When the deal finally closed six months later, the troubled mortgage lender was valued at just $2.5 billion.
8. Vikram Pandit: I Love My New Job
"The first priority of risk has been to make sure that our legacy portfolio of assets in the sub-prime and mortgage areas are separated and managed to be optimized, and we have done that. We have also made sure they are well-capitalized."
—Vikram Pandit on his first earnings call as the new C.E.O. of Citigroup on January 15, 2008.
We're sure investors appreciated hearing from the troubled bank's new boss, but we're sure they'd have appreciated it more if what he said was true. Three months later, Citi wrote down $12.1 billion ($6 billion from subprime) in losses. Three months after that it wrote down another $7 billion. All told since Pandit's inaugural comments, Citigroup has raised some $20 billion in new capital. How's that for well-capitalized?
9. Alan Schwartz: May As Well Have Said It in Pig Latin
"Bear Stearns' balance sheet, liquidity, and capital remain strong."
—Alan Schwartz, chief executive of Bear Stearns, on CNBC, March 12, 2008.
Yes, yes. We saved the best for last, of course. Bear's balance sheet and liquidity position was so strong it was forced into a fire sale to JP Morgan and the Federal Reserve just days later. The rest is history, and so is Schwartz.Thu, Jul 31 2008
THE "MAESTRO" SPEAKS: OLIGARCH'S PET MONKEY SETS THE STAGE FOR THE NEXT DOMINO TO FALL
"The solution'' sez his High Holy Bubbleness about Fannie, Freddie, and all the other 'too big to fails', "is the nationalization of the companies".
Which is precisely what comes next. Privatize profit, socialize debt. Thanks, you traitorous egomaniacal incompetent motherfucker. Thanks a whole fucking lot.
Greenspan Says Housing Prices Not Yet Near Bottom
July 31 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said falling U.S. home prices are ``nowhere near the bottom'' and the resulting market turmoil isn't showing signs of abating.
While the odds of a recession are 50-50, achieving stable markets will ``take a while,'' Greenspan said today in a CNBC interview.
The economy grew at a 1.9 percent annualized rate in the second quarter after expanding 0.9 percent in the first quarter, the Commerce Department said in Washington. Gross domestic product was revised to show a contraction in the final three months of 2007.
More Americans filed claims for unemployment insurance last week than at any time in more than five years, the Labor Department said. Fed policy makers have cut the benchmark rate to 2 percent from 5.25 percent since September, halting the reductions in June amid rising concern about inflation.
Fannie Mae and Freddie Mac, the largest sources of money for U.S. home loans, are a ``major accident waiting to happen,'' Greenspan said. ``The solution'' is the ``nationalization'' of the companies, he said.
After the former Fed chairman spoke, Washington-based Fannie Mae dropped 69 cents, or 5.7 percent, to $11.52 at 3:48 in New York Stock Exchange composite trading. Freddie Mac fell 55 cents, or 6.3 percent, to $8.18.
``It important that we focus on stabilizing the financial system,'' Greenspan said. Policy makers also need to reconcile slowing economic growth with rising prices, he said.
The U.S. faces ``a very substantial change in the balance between growth and inflation,'' Greenspan said.Thu, Jul 31 2008
WHY WE MUST DRILL IN ALASKA AND OFF THE COASTS OF CALIFORNIA AND FLORIDA
Exxon Mobil 2Q profit sets US record, shares fall
HOUSTON, Associated Press - Exxon Mobil Corp. reported second-quarter earnings of $11.68 billion Thursday, the biggest profit from operations ever by any U.S. corporation, but the results were well short of Wall Street expectations and its shares slumped 3 percent.
The world's largest publicly traded oil company said net income for the April-June period came to $2.22 a share, up from $10.26 billion, or $1.83 a share, a year ago.
Revenue rose 40 percent to $138.1 billion from $98.4 billion in the year-earlier quarter.
Excluding an after-tax charge of $290 million related to an Exxon Valdez court settlement, earnings amounted to $11.97 billion, or $2.27 per share.
Analysts on average expected Exxon Mobil to earn $2.52 a share on revenue of $144 billion, according to a survey by Thomson Financial. The estimates typically exclude one-time items.
The record-setting results were largely expected, given that crude prices in the second quarter were nearly double what they were a year ago. Natural gas prices were significantly higher too.
But investors expected even bigger profits Thursday, especially after Europe's Royal Dutch Shell reported a 33 percent jump in second-quarter earnings to $11.6 billion, which fell just shy of Exxon's own record earnings from 2007.
Exxon Mobil shares fell $2.64, or 3.13 percent, to $81.74 in afternoon trading.
Setting U.S. profit records has become commonplace for Irving-based Exxon Mobil. The $11.68 billion topped its own U.S. record of $11.66 billion, posted in the fourth quarter of last year. Right behind that was the $10.9 billion it reported to start 2008.
In fact, if one-time gains like bankruptcy settlements and spinoffs are stripped away from other companies, Exxon Mobil owns the record for the top 10 most-profitable quarters for a U.S. company, as well as the largest annual profit.
United Airlines' UAL Corp. reported first-quarter profits of $22.9 billion in 2006, but that reflected a bankruptcy settlement, not true profit. The airline would have posted a $306 million loss if those gains were stripped out.
Ford Motor Corp. reported profits of $17.6 billion in the first quarter of 1998, but that included a $16 billion, one-time gain from the spinoff of Associates First Capital.
Exxon Mobil, which produces 3 percent of the world's oil, got its biggest boost from its exploration and production arm, where earnings rose 68 percent to $10.01 billion from $5.95 billion a year ago. The main driver was record crude prices, partially offset by lower sales volumes and higher operating costs.
Once again, Exxon Mobil's results revealed a troubling trend at the heart of its business.
Production on an oil-equivalent basis fell 8 percent from a year ago — a significant blow for a company that generates more than two-thirds of its earnings from oil and gas production. That follows an opening quarter of 2008 when the company said overall production fell 5.6 percent from a year ago.
Excluding last year's loss of its Venezuelan assets, a labor strike in Nigeria and lower volumes because of production-sharing contracts, Exxon said production was down about 3 percent in the most-recent quarter.
Like its competitors, Exxon Mobil said it took a beating from lower global refining margins. Earnings from refining and marketing fell 54 percent in the quarter to $1.55 billion.
For the first six months of 2008, Exxon Mobil said it earned $22.57 billion, or $4.25 a share, from $19.54 billion, or $3.45 a share, in the first half of 2007. Revenue rose to $254.9 billion from $185.5 billion.Thu, Jul 31 2008
BUSH MONUMENT
Can't wait for the pigeons to find it...
All news articles and images provided under the Fair Use Notice.