Free Markets and Slavery...
Just something that floated across the rancid residue that used to be gray matter, but now that I live in the South, you sometimes cannot but help and think about slavery. Yeah, I know, it no longer exists and not every southerner owned slaves, etc, etc. But, the outward symbols are still here. The Confederate flag, for example, is flown proudly here, not as a symbol of a repressive system but as matter of regional and personal heritage. Some of the old plantations still exist, although they've mostly been converted to other uses: museums, wedding halls, antique shops, meeting houses, etc.
Now normally, I wouldn't care about something like that, except in the historical sense as an interesting period in history. As far as I'm concerned, the War of Northern Aggression (as they call it here) ended quite a long time ago, and after Emancipation Proclimations, Constitutional Amendments, Civil Rights and Voting Acts and a host of affirmative action programs, slavery is well and truly dead.
But you can't help thinking about it when you walk around here.
It's my contention that the Civil War need never have been fought. The Industrial Revolution was already reducing the need for massive numbers of brute laborers every day during that period. It would have been a matter of time before technology had made the business of planting and cultivating cotton ridiculously cheap, and reduced the prices for raw cotton. Thsi would have made the keeping of large numbers of slaves a more expensive proposition, and slavery would have ended as soon as it became apparent. The problem then would have been what to do about several million otherwise-unwanted, and now unwatched, blacks in the South.
Abraham Lincoln, that paragon of virtue (so we've been led to believe) had a solution: deport the slaves. He advocated sending them to Mexico, whioch would have probably started the plague of illegal Mexican immigration in 1870 instead of 1970. That assumes that Mexico wanted them. That assumes that the slaves would have wanted to leave. That assumes quite a lot.
So, I began thinking; what would have happened if several million people, formerly slaves, living under constant surveilance, tied to the land and having no legal standing, were suddenly left to their own devices. I believe one of two things would have happened: there would have been genocide or the slaves would have to be controlled in some other way.
Enter the Federal Government.
In the modern world, many blacks in this country live on a different kind of plantation, where they are kept under surveilance, kept at a level of bare subsistence, left mostly uneducated, and most, have little or no legal standing despite the laws designed to correct that. The problem is that while the Federal Government helped set up the New Plantation, with welfare, Medicaid, Foood Stamps augmenting a host of state-run welfare programs, blacks themselves do the rest.
Parents don't look after their children (a phenomenon not stricly limited to the black commuity), the schools have become warehouses, a babysitter of last resort. Two million black males are sitting in prisons all across the country. Out-of-Wedlock birth is a commonplace situation. Addictions of all kinds run rampant. Two-parent households barely exist. Speaking English and learning how to add and subtract are derided as "being white". Rap "music" substitutes for anything approaching litterature or art. These are the mental bars of the black prison system. A system that is mostly self-imposed.
I began to think of this when I happened upon a bunch of black folks around here whose behavior was bordering on that of a lowland gorilla. There was no display of manners. Cursing was the normal speech pattern. There wasn't even a display of any redeeming quality that could be called "polite" or "classy". Children ran rampant. Husbands (more likely "my baby's daddy" type companions) yelled and demeaned their women and children, complete with filthy words, in public. They dress in a way that is remiscent of Wal-Mart having blown up: bright, gaudy colors, clothes (especially pants) that do not fit, shirts and jackets emblazoned with the name of some top-flight designer (and sneakers to match), and here they are, arguing over the price of the food at McDonald's.
It started with someone asking why they couldn'ty get the 99 cent two cheeseburger deal with fries and a drink for the same price as the "Value Meal". Probably because there is not a "two cheeseburger Value Meal" offered. They way it was ordered, it was ordered as individual items.
This started a typical display of ghetto angst: the audible muttering that is intended for everyone to hear. The deriding of the poor cashier (herself black) who had tried to be patient, had tried to explain basic mathematics and economics, but still got called a "f*uckin' bee-atch. The comical hand-on-hip, bobbing-and-weaving-in-yo-face rehtoric that would even pass for logical discourse at a convention of democrats. The put-upon-I'm-a-po'-oppressed-country-niggah attitude put on display to cover the fact that someone tried to scam openly and got caught, publiclly indicating the stupidity on display. The mess, purposely, left on the table for someone else to clean up.
It wouldn't have been so schocking to me, after all I'm a New Yorker, except that this group of people seemed to be four generations strong. There was a grandmother, a set of ersatz-parents, the teenagers and their illicit progeny. And right there, I was presented with a microcosm of what Southern Rebels might have been faced with in 1860; we could give them their freedom, we could try to make amends with money, we could try to even the score with the law. But there would still be several million people not-far-removed from their tribal, uncivilized ways, running wild.
No wonder Southerners opted to fight.
The passage of time has not changed very many things. I know that the bunch I saw was NOT representative of all blacks, so please, don't complain. But from my experience, it's a pretty accurate snapshot.
Thursday, December 09, 2004
The Citi Never Sleeps, Part 2...
Poor Citibank. Beseiged by the federal government, shareholders seeking their lost wealth and bombers in Argentina. I would sit here, biting my nails in fright, if I wasn't so damn happy about not working there anymore.
Last month, two Citibank branc offices in Buenos Aires were bombed, one successfully, on not. Today, another possible explosive device was found in another Argentine Citi branch. It seems Citi has done something that makes people angry.
If i had to guess, it probably goes back to 2000 or 2001 (memory fails here) when Citibank announced that Argentina was going to default on 800 or 900 million dollars worth of loans extended by Citi. Mind you, this was back in the day when brokerage houses and banks had more money than good sense, and lending money to a South American country not thatfar removed from almost-Nazi-like rule via military junta must have sounded like a good idea. Then again, Citi pumped a billion dollars into Russia, as well. Then again, Citi fronted Enron and Global Crossing and probably another hundred scams we've never heard of.
Normally, I would consider that the bombers themselves were totally to blame, being unprincipled psychopaths without the sense to pour piss out of a boot, with instructions on the heel. But in this case, when a business starts having explosives delivered, you have to start thinking about just why.
Pure speculation on my part, but I would startthinking about the Argentine government or ex-government types being involved, although I have no proof. They certainly have a panopoly of reasons for doing so. On the other hand, there is an incredible anti-Globalization movement in existance all across the planet, most of it based on socialist-style victimization rhetoric, and lord knows, South Americans respond to that kind of thing. So who knows?
I do happen to know that Citi has other problems that management doesn't even know about, and I would bet, even care about. Talking with some of the people I used to work with, it seems as if they have been scattered ott he four winds, with staff being relocated all over the country. Some go willingly, more often than not, most don't. From what I get from my sources, Citi is not only bestet from without, it's beset from within. It's not a stretch to begin thinking of an employee in Atlanta, or New York, or Los Angeles, bringing the next explosive device to a Citi office. I don;t advocate it, but damn, if it wouldn't be poetic justice.
Justice because what used to be an honorable trademark business in the United States has been pulled down by small-minded individuals who inhabit corner offices, and who cannot see beyond their own wallets. These ignoramuses flot the rules, they steal, they lie and they cheat, and at the end of the day, the protect each other and expect the shareholders to eat the losses just to stay in business. Normally, I am a staunch supporter of free markets and unfettered capitalism, at least until I see what happens when irresponsible people are at the helm. Citi (and it's not the only corporation in this boat) is just too large, to complex and, ultimately, too institutionally corrupt to continue as is. It was once a bank, and now it's a bank, brokerage house, insurance company, credit card company, mortgage broker, and probably 70 other things I don't know about.
Perhaps it's time someone took them down a notch or two. I don't think it should be done by the government or even by terrorists. It should be done by the people who really matter -- the customers and the shareholders. They can always take their business elsewhere and, believe me, that hurts more than any bomb or Federal indictment.
Poor Citibank. Beseiged by the federal government, shareholders seeking their lost wealth and bombers in Argentina. I would sit here, biting my nails in fright, if I wasn't so damn happy about not working there anymore.
Last month, two Citibank branc offices in Buenos Aires were bombed, one successfully, on not. Today, another possible explosive device was found in another Argentine Citi branch. It seems Citi has done something that makes people angry.
If i had to guess, it probably goes back to 2000 or 2001 (memory fails here) when Citibank announced that Argentina was going to default on 800 or 900 million dollars worth of loans extended by Citi. Mind you, this was back in the day when brokerage houses and banks had more money than good sense, and lending money to a South American country not thatfar removed from almost-Nazi-like rule via military junta must have sounded like a good idea. Then again, Citi pumped a billion dollars into Russia, as well. Then again, Citi fronted Enron and Global Crossing and probably another hundred scams we've never heard of.
Normally, I would consider that the bombers themselves were totally to blame, being unprincipled psychopaths without the sense to pour piss out of a boot, with instructions on the heel. But in this case, when a business starts having explosives delivered, you have to start thinking about just why.
Pure speculation on my part, but I would startthinking about the Argentine government or ex-government types being involved, although I have no proof. They certainly have a panopoly of reasons for doing so. On the other hand, there is an incredible anti-Globalization movement in existance all across the planet, most of it based on socialist-style victimization rhetoric, and lord knows, South Americans respond to that kind of thing. So who knows?
I do happen to know that Citi has other problems that management doesn't even know about, and I would bet, even care about. Talking with some of the people I used to work with, it seems as if they have been scattered ott he four winds, with staff being relocated all over the country. Some go willingly, more often than not, most don't. From what I get from my sources, Citi is not only bestet from without, it's beset from within. It's not a stretch to begin thinking of an employee in Atlanta, or New York, or Los Angeles, bringing the next explosive device to a Citi office. I don;t advocate it, but damn, if it wouldn't be poetic justice.
Justice because what used to be an honorable trademark business in the United States has been pulled down by small-minded individuals who inhabit corner offices, and who cannot see beyond their own wallets. These ignoramuses flot the rules, they steal, they lie and they cheat, and at the end of the day, the protect each other and expect the shareholders to eat the losses just to stay in business. Normally, I am a staunch supporter of free markets and unfettered capitalism, at least until I see what happens when irresponsible people are at the helm. Citi (and it's not the only corporation in this boat) is just too large, to complex and, ultimately, too institutionally corrupt to continue as is. It was once a bank, and now it's a bank, brokerage house, insurance company, credit card company, mortgage broker, and probably 70 other things I don't know about.
Perhaps it's time someone took them down a notch or two. I don't think it should be done by the government or even by terrorists. It should be done by the people who really matter -- the customers and the shareholders. They can always take their business elsewhere and, believe me, that hurts more than any bomb or Federal indictment.
Tuesday, December 07, 2004
Job-Hunting in the New/Old South...
I've been looking for something approaching regular employment recently here in Charlotte, and I'm convinced, convinced mind you, that the 21st Century still has not reached certain parts of the South.
Maybe it's just me, and perhaps I'm not acquainted yet with every southern ritual and custom (to be fair, "perhaps" is the wrong word), but one would think that the process of applying for a job would be pretty straightforward; someone has a job to offer, people apply for it, the prospective employer interviews qualified people for it and decides which one to hire. Seems simple enough to me, but apparently that is not the way things actually work.
Yesterday I had an appointment with an "employment specialist" here in Charlotte. The "employment specialist" in question is a former Yankee too, and she explained to me the sometimes maddening, almost-glacial pace with which these searches are typically conducted. She also filled me in on the finer points of networking here in the south, which when it comes to employment, seems more like a courtship than it does a straightforward business proposition.
Apparently, it is not enough to be qualified. It is not enough to be competent and to have a wealth of experience in your field. One must play a certain game here, first to get noticed, and secondly to inch ever-closer to the Holy Grail of full-time employment in someplace other than Wal-Mart. It's been said that job seeking is not so much what you know as who you know, and never was it more true than here in the south.
The way this has been explained to me is that an individual seeking employment must make an effort to bring himself to the attention of the who's who of the local business community, making contacts and then playing a "scratch-my-back/I'll-scratch-yours" game which might, might, get your foot in the door. An applicant must be willing to do things such as attend local job fairs solely for the purpose of meeting people, not necessarily applying for jobs. One must never show too much eagerness in the pursuit of a position, as it is considered rude and pushy. Above all, one must make a pilgrimage to those that hold the keys to the castle , rather than the other way around, whch is how it works up north. Membership in clubs is recommended in order to try and ingratiate yourself to a prospective employer. Having belonged to a fraternity, for example, at one of the bastions of Southern education (UNC, NC State, Auburn, Clemson, etc) is considered a major plus.
In other words, find the right people, kiss the right asses, and perhaps you might get an opportunity out of it. You may have all of the qualifications. You may run rings around the people presently doing the job now. But without the dance, the ritual, if you will, you will get nowhere. Talent and intelligence only count for something after you've stroked the proper egos.
Unfortunately, I'm not one to play these kinds of games and I wonder just how much I'm going to suffer for it. I don't like bending knees, kow-towing or getting involved in politics and popularity contests. I like to work. Well, I don't really like to work, I just like the paycheck. Unfortunately, work is part of the bargain.
Running down the list of things I've been advised to do, it suddenly struck me that if I have to do all the work, what the hell do I need an "employment specialist" for, and how the hell do they stay in business? They're obviously not placing very many candidates by themselves if the candidate has to do all the work, correct? It also struck me that it sounds like something I'd always heard about, but didn't quite believe existed. For lack of a better term, I'll refer to it as the Redneck Brotherhood.
It appears that the purpose of this secret organization is to keep the "wrong kind of people" out of the employment market. What kind of people are the "wrong kind"? That's a good question. If I had to guess, it would probably be pushy, loud-mouthed Yankees who don't play by their rules and who need to be brought down a few pegs before they're tossed a bone. I swear (I should say "I swannee", as they say here) this is the first time in my life that I've ever walked into a personnel agency and had an "employment specialist" tell me that they can't hook me up with a job, or even give me any contacts, but they can tell me where else to look for one. This conversation consisted of 30 minutes about the ritual, 30 minutes of bullshitting about how Southerners know nothing about pizza and bagels, and 30 minutes of rolling off a list of other "employment specialists" that can do a better job. However, they did ask me to fill in 600 pages of forms, including tax forms and a personality test, just in case they might be able to get me temporary work.
Incredibly strange. The job market in New York may have been a jungle, but it was at least an intelligible jungle.
Many years ago people complained about the "Old Boys Network" and how it kept folks on the outside looking in. I never really saw much of it in New York, and didn't actually believe it still existed anymore, except maybe in the very upper, upper reaches of the corporate world, which I will never reach and never had any desire to join. Here, in the 21st century south, not only does it exist, it thrives, and the old bonds of school, class and nepotism are no longer as strong as is the bond of having been born (anywhere) in the former Confederacy.
It probably won't be long before another transplanted Yankee decides to pester his Congresscritter to introduce a bill identifying "geographical origin" as a new classification of discrimination, to join "race, sex, color, religion, disability and sexual preferance".
I've been looking for something approaching regular employment recently here in Charlotte, and I'm convinced, convinced mind you, that the 21st Century still has not reached certain parts of the South.
Maybe it's just me, and perhaps I'm not acquainted yet with every southern ritual and custom (to be fair, "perhaps" is the wrong word), but one would think that the process of applying for a job would be pretty straightforward; someone has a job to offer, people apply for it, the prospective employer interviews qualified people for it and decides which one to hire. Seems simple enough to me, but apparently that is not the way things actually work.
Yesterday I had an appointment with an "employment specialist" here in Charlotte. The "employment specialist" in question is a former Yankee too, and she explained to me the sometimes maddening, almost-glacial pace with which these searches are typically conducted. She also filled me in on the finer points of networking here in the south, which when it comes to employment, seems more like a courtship than it does a straightforward business proposition.
Apparently, it is not enough to be qualified. It is not enough to be competent and to have a wealth of experience in your field. One must play a certain game here, first to get noticed, and secondly to inch ever-closer to the Holy Grail of full-time employment in someplace other than Wal-Mart. It's been said that job seeking is not so much what you know as who you know, and never was it more true than here in the south.
The way this has been explained to me is that an individual seeking employment must make an effort to bring himself to the attention of the who's who of the local business community, making contacts and then playing a "scratch-my-back/I'll-scratch-yours" game which might, might, get your foot in the door. An applicant must be willing to do things such as attend local job fairs solely for the purpose of meeting people, not necessarily applying for jobs. One must never show too much eagerness in the pursuit of a position, as it is considered rude and pushy. Above all, one must make a pilgrimage to those that hold the keys to the castle , rather than the other way around, whch is how it works up north. Membership in clubs is recommended in order to try and ingratiate yourself to a prospective employer. Having belonged to a fraternity, for example, at one of the bastions of Southern education (UNC, NC State, Auburn, Clemson, etc) is considered a major plus.
In other words, find the right people, kiss the right asses, and perhaps you might get an opportunity out of it. You may have all of the qualifications. You may run rings around the people presently doing the job now. But without the dance, the ritual, if you will, you will get nowhere. Talent and intelligence only count for something after you've stroked the proper egos.
Unfortunately, I'm not one to play these kinds of games and I wonder just how much I'm going to suffer for it. I don't like bending knees, kow-towing or getting involved in politics and popularity contests. I like to work. Well, I don't really like to work, I just like the paycheck. Unfortunately, work is part of the bargain.
Running down the list of things I've been advised to do, it suddenly struck me that if I have to do all the work, what the hell do I need an "employment specialist" for, and how the hell do they stay in business? They're obviously not placing very many candidates by themselves if the candidate has to do all the work, correct? It also struck me that it sounds like something I'd always heard about, but didn't quite believe existed. For lack of a better term, I'll refer to it as the Redneck Brotherhood.
It appears that the purpose of this secret organization is to keep the "wrong kind of people" out of the employment market. What kind of people are the "wrong kind"? That's a good question. If I had to guess, it would probably be pushy, loud-mouthed Yankees who don't play by their rules and who need to be brought down a few pegs before they're tossed a bone. I swear (I should say "I swannee", as they say here) this is the first time in my life that I've ever walked into a personnel agency and had an "employment specialist" tell me that they can't hook me up with a job, or even give me any contacts, but they can tell me where else to look for one. This conversation consisted of 30 minutes about the ritual, 30 minutes of bullshitting about how Southerners know nothing about pizza and bagels, and 30 minutes of rolling off a list of other "employment specialists" that can do a better job. However, they did ask me to fill in 600 pages of forms, including tax forms and a personality test, just in case they might be able to get me temporary work.
Incredibly strange. The job market in New York may have been a jungle, but it was at least an intelligible jungle.
Many years ago people complained about the "Old Boys Network" and how it kept folks on the outside looking in. I never really saw much of it in New York, and didn't actually believe it still existed anymore, except maybe in the very upper, upper reaches of the corporate world, which I will never reach and never had any desire to join. Here, in the 21st century south, not only does it exist, it thrives, and the old bonds of school, class and nepotism are no longer as strong as is the bond of having been born (anywhere) in the former Confederacy.
It probably won't be long before another transplanted Yankee decides to pester his Congresscritter to introduce a bill identifying "geographical origin" as a new classification of discrimination, to join "race, sex, color, religion, disability and sexual preferance".
Sunday, December 05, 2004
The Citi Never Sleeps...
My old employer, Citigroup, has been back in the news as of late. The latest lawsuit (you almost never hear anything positive about Citi, only about the lawsuits) arises from investors peeved about the actions of Jack Grubman (con-man extraordinaire) and his use of the ratings system to prop up AT&T , then run by a Citigroup board member, Michael Armstrong. The suit alleges that Grubman purposely gave AT&T a higher-then-deserved rating in order to allow Citi to obtain a lucrative contract with AT&T. In return, Grubman got the help of Citigroup CEO Sandy Weill in getting Grubman's kids into a ritzy pre-school program. Investors got stuck with stock, held or bought on Citi's recommendation, that was hardly worth the paper it was printed on.
My own personal thoughts on what passes for responsible management at Citi have been somewhat well documented here. I believe it to be a den of thieves, and when I hear something like this (I had heard about it three or four years ago), I'm not terribly surprised. This is par for the course; the old-boy network once again taking care of each other, with money and favors changing hands. The old nod-and-a-handshake method of business has never actually gone away, and probably never will.
I've gotten a few missives, queries and questions from various places about what I know went on at Citi, or more specifically, at it's Salomon, Smith-Barney subsidiary, where I was employed as a system's programmer, back in the day. I cannot tell anyone what actually happened in the boardroom, in the excutive dining room or in the executive suites. That was not my territory. I can only talk about what had filtered down to my area vis-a-vis management practices and the perceptions those practices created amongst the rank and file.
I never liked what was going on. Still, I held my nose and soldiered on for 11 years --- I had a job to do, and bills to pay, just like anyone else, and I was doing okay, despite the stress and the sick feelings I got everytime I walked through the front door at 390 Greenwich Street. Agita, like the three martini breakfast and the fully-staffed, on-site cardiac unit, is a staple of life on Wall Street.
So is greed. So is the stupidity engendered by greed. The short-sightedness that elevates the making of a dollar to the top of the list and the application of etics and common sense to the bottom of the trash heap. I've seen the greed and stupidity first hand, and after a while, the lines between where one starts and the other ends becomes awfully blurred. But it amazes me, to this day, how people with expensive educations from the finest Ivy League business schools can continue to be so incredibly stupid.
Jack Grubman was not poor. Jack Grubman could have afforded to send his children to any damn pre-school in the world, but he HAD to have the one at the 92nd Street Y. It wasn't just a better pre-school program, it was a status symbol. If the suckers had to be fleeced in order for that to happen, and the firm benefitted from some extra business at the same time, then so be it.
You see a lot of this on Wall Street.
I spent 18 years of my life in the financial industry, never on the trading floor, always in the system's areas, but you can't help but see this kind of thing happening all the time. In the end, the stupidity always revolves around three bsaic tenets:
1. Acquisition.
2. Status.
3. Arrogance.
Acquisition in the go-go 80's revolved around who could rake in the most money for the firm. Who had the better house or car, and who belonged to what clubs. It still does. One only need look at Dennis Kozlowski and Ken Lay, with the gazillion homes in Vail, the $18,000 umbrella stands and the art collects to see it. Back then, these guys would have actually done something productive in order to enjoy these perks. Nowadays, they just borrow the money from the firm, with no intention of ever paying it back, and leaving the investors on the hook for it. Acquisition in the 90's went far beyond the worst excesses of the 80's, in my opinion. Having the mansions, the yachts, the Bentleys and the memberships was no longer enough -- now they had to acquire even more mundane things, like the right pre-school, provided the proper patina of status was attached to it as well.
Status has always been a problem. You will find very few brokers on the street that don't have a "drop your pants and grab your yardstick" mentality. The big earners always got the better perks, and in the age of mass media, the better press. Your status nowadays revolves around how many magazine covers and Wall Street Journal profiles you happen to be seen or mentioned in. No one labors anonymously anymore, except the cubicle slaves who actually make it all possible. Still, the title of Lord of the Jungle not only revolves around how much you've acquired, but how much face time you get on television. About the only thing better than a multi-million dollar bonus was five good minutes in front of Maria Bartolomo, Stuart Varney or Neil Cavuto. If i had to guess, this need for exposure as well as riches reinforces an impression of the high rollers that I had formed very early on in my career: these guys probably all have small penises and have been compensating for it with wealth. Money, as they say, is a wonderful aphrodesiac.
As for arrogance, you couldn't be a market mover without it. You have to have a killer mentality and a swagger if you hope to get anywhere. Very often, that smugness, that swagger, that overconfidence, is vital to success. No one wants to do business with someone who hedges, who covers his behind or who second-guesses himself, even when he's dead wrong. These guys would rather go down in flames than to admit to making a mistake. Mistakes are for other people -- other people get blamed for them, other people are held responsible for them and ultimately, other people get fired for them. I can't tell you how many of these guys I've seen in my day who actually believe that if they yell enough, become intimidating enough, then nothing becomes impossible. I saw so much of it on September 11th, 2001 that it made me want to leave the industry for good. Nothing like watching the CIO of the compnay you work for pound a table demanding things that now lay at the bottom of a smoking pile of rubble, because he said so, and despite all logic indicating it can never be done. They become so arrogant that bringing the dead back to life becomes merely a matter of thundering and sending the peasants into a frenzy of activity.
At the end of the day, it's not Citi that does these things or is stocked to the brim with this kind of character. Every firm has them, regardless of the business they're in, and not all of them get caught. But occasionally, one does, and when that happens, the rest of the firm is caught due to the increased scrutiny the original sin brings. It's when the full force of daylight is brought to bear on the happenings of once-closed boardrooms that we begin to see just what fools these folks are. They have everything, and it's never enough. They have the power to affect the world's financial and political systems, and it's still not enough. The egos expand until they fill the four corners of the universe, and then they demand a bigger universe.
The probelm with the Jack Grubmans of this world is that, eventually, their egos become so inflated that they believe they will never get caught. Grubman got caught because he couldn't stop bragging about getting his kids into that school (it was an internal e-mail, for the love of Pete!), and that he was sufficiently in control of the company apparatus that he could manipulate all he wanted from the writing, issuing and filing of the reports, right down to side-stepping the compliance and legal departments, and that he could then use his knowledge of where the bodies were buried to protect his own behind. He forgot about the investors, many of whom would have lost enough money to notice, and who would begin to ask questions. He forgot about the press, whch back then was his friend, but which changes stripes as soon as blood hits the water. He did very well, for a while, escaping with a $32 million "severance package". That escape is merely momentary, apparently.
Want to know how this is all going to end?
Jack Grubman will be convicted of something, pay the requiste fines, avoid jail and become a "silent consultant" someplace else, raking in big bucks. Sandy Weill will retire (rumored to be coming for at least 10 years now), pay is fines and go back to counting his wealth and putting his names on hospital wings in New York City. No one will do any jail time since the lawyers will tiee this one up for years and since, nod and a wink, it wasn't like we were Enron, was it? Well, yes, you were Enron, in the sense that you did something wrong. Incidentally, if I recall, Citi was up to it's collective backside in Enron, too. Grubman also had a lot to do with the Global Crossing fiasco as well. The "system" will correct itself, displaying to all the world that they have truly learned their lesson, and when no one is watching them anymore, go right back to doing what they were doing anyway. It's always been done this way and it will never change.
If you want my advice on what to do with your money, you're asking the wrong person. However, if you want some advice on what the truth is about Wall Street and the scum that works on it, I can tell you the following:
- A stockbroker is a licenced bookie in a suit.
- You'll bever get "in on the ground floor" of anything. By the time the small potatoe investors get calls from their brokers, the firm has already made it's money, the broker made his, and now they're pumping up prices on your dime, so thatthey can make more later.
- Anything in which you still pay, win or lose, is something that requires your full attention. You paid for expert advice and if you want to take it, you should have enough common sense to follow up on it. Hold them accountable, hold them responsible, but for God's sake, don't absolve yourself of responsibility. Yo made the final decision and if you lost, that's your tough luck, or rather, your stupidity for going solely on trust and their say-so. There is no longer nay trust on Wall Street and a smart investor does his own homework.
- Very few, if any, of the brokers you might deal with is an honest individual. He has something to sell you, and he will always put the best eyeshadow on the worst pig and present it to you as the Prom Queen. At the end of the day, a stockbroker is a private firm, Me-Myself-and-I, Inc, and his well-being depends on you, or rather, on taking your money. Ethics on Wall Street went out the window a long time ago. Expect to be ripped off, frequently, and take action to minimize those losses if possible.
My old employer, Citigroup, has been back in the news as of late. The latest lawsuit (you almost never hear anything positive about Citi, only about the lawsuits) arises from investors peeved about the actions of Jack Grubman (con-man extraordinaire) and his use of the ratings system to prop up AT&T , then run by a Citigroup board member, Michael Armstrong. The suit alleges that Grubman purposely gave AT&T a higher-then-deserved rating in order to allow Citi to obtain a lucrative contract with AT&T. In return, Grubman got the help of Citigroup CEO Sandy Weill in getting Grubman's kids into a ritzy pre-school program. Investors got stuck with stock, held or bought on Citi's recommendation, that was hardly worth the paper it was printed on.
My own personal thoughts on what passes for responsible management at Citi have been somewhat well documented here. I believe it to be a den of thieves, and when I hear something like this (I had heard about it three or four years ago), I'm not terribly surprised. This is par for the course; the old-boy network once again taking care of each other, with money and favors changing hands. The old nod-and-a-handshake method of business has never actually gone away, and probably never will.
I've gotten a few missives, queries and questions from various places about what I know went on at Citi, or more specifically, at it's Salomon, Smith-Barney subsidiary, where I was employed as a system's programmer, back in the day. I cannot tell anyone what actually happened in the boardroom, in the excutive dining room or in the executive suites. That was not my territory. I can only talk about what had filtered down to my area vis-a-vis management practices and the perceptions those practices created amongst the rank and file.
I never liked what was going on. Still, I held my nose and soldiered on for 11 years --- I had a job to do, and bills to pay, just like anyone else, and I was doing okay, despite the stress and the sick feelings I got everytime I walked through the front door at 390 Greenwich Street. Agita, like the three martini breakfast and the fully-staffed, on-site cardiac unit, is a staple of life on Wall Street.
So is greed. So is the stupidity engendered by greed. The short-sightedness that elevates the making of a dollar to the top of the list and the application of etics and common sense to the bottom of the trash heap. I've seen the greed and stupidity first hand, and after a while, the lines between where one starts and the other ends becomes awfully blurred. But it amazes me, to this day, how people with expensive educations from the finest Ivy League business schools can continue to be so incredibly stupid.
Jack Grubman was not poor. Jack Grubman could have afforded to send his children to any damn pre-school in the world, but he HAD to have the one at the 92nd Street Y. It wasn't just a better pre-school program, it was a status symbol. If the suckers had to be fleeced in order for that to happen, and the firm benefitted from some extra business at the same time, then so be it.
You see a lot of this on Wall Street.
I spent 18 years of my life in the financial industry, never on the trading floor, always in the system's areas, but you can't help but see this kind of thing happening all the time. In the end, the stupidity always revolves around three bsaic tenets:
1. Acquisition.
2. Status.
3. Arrogance.
Acquisition in the go-go 80's revolved around who could rake in the most money for the firm. Who had the better house or car, and who belonged to what clubs. It still does. One only need look at Dennis Kozlowski and Ken Lay, with the gazillion homes in Vail, the $18,000 umbrella stands and the art collects to see it. Back then, these guys would have actually done something productive in order to enjoy these perks. Nowadays, they just borrow the money from the firm, with no intention of ever paying it back, and leaving the investors on the hook for it. Acquisition in the 90's went far beyond the worst excesses of the 80's, in my opinion. Having the mansions, the yachts, the Bentleys and the memberships was no longer enough -- now they had to acquire even more mundane things, like the right pre-school, provided the proper patina of status was attached to it as well.
Status has always been a problem. You will find very few brokers on the street that don't have a "drop your pants and grab your yardstick" mentality. The big earners always got the better perks, and in the age of mass media, the better press. Your status nowadays revolves around how many magazine covers and Wall Street Journal profiles you happen to be seen or mentioned in. No one labors anonymously anymore, except the cubicle slaves who actually make it all possible. Still, the title of Lord of the Jungle not only revolves around how much you've acquired, but how much face time you get on television. About the only thing better than a multi-million dollar bonus was five good minutes in front of Maria Bartolomo, Stuart Varney or Neil Cavuto. If i had to guess, this need for exposure as well as riches reinforces an impression of the high rollers that I had formed very early on in my career: these guys probably all have small penises and have been compensating for it with wealth. Money, as they say, is a wonderful aphrodesiac.
As for arrogance, you couldn't be a market mover without it. You have to have a killer mentality and a swagger if you hope to get anywhere. Very often, that smugness, that swagger, that overconfidence, is vital to success. No one wants to do business with someone who hedges, who covers his behind or who second-guesses himself, even when he's dead wrong. These guys would rather go down in flames than to admit to making a mistake. Mistakes are for other people -- other people get blamed for them, other people are held responsible for them and ultimately, other people get fired for them. I can't tell you how many of these guys I've seen in my day who actually believe that if they yell enough, become intimidating enough, then nothing becomes impossible. I saw so much of it on September 11th, 2001 that it made me want to leave the industry for good. Nothing like watching the CIO of the compnay you work for pound a table demanding things that now lay at the bottom of a smoking pile of rubble, because he said so, and despite all logic indicating it can never be done. They become so arrogant that bringing the dead back to life becomes merely a matter of thundering and sending the peasants into a frenzy of activity.
At the end of the day, it's not Citi that does these things or is stocked to the brim with this kind of character. Every firm has them, regardless of the business they're in, and not all of them get caught. But occasionally, one does, and when that happens, the rest of the firm is caught due to the increased scrutiny the original sin brings. It's when the full force of daylight is brought to bear on the happenings of once-closed boardrooms that we begin to see just what fools these folks are. They have everything, and it's never enough. They have the power to affect the world's financial and political systems, and it's still not enough. The egos expand until they fill the four corners of the universe, and then they demand a bigger universe.
The probelm with the Jack Grubmans of this world is that, eventually, their egos become so inflated that they believe they will never get caught. Grubman got caught because he couldn't stop bragging about getting his kids into that school (it was an internal e-mail, for the love of Pete!), and that he was sufficiently in control of the company apparatus that he could manipulate all he wanted from the writing, issuing and filing of the reports, right down to side-stepping the compliance and legal departments, and that he could then use his knowledge of where the bodies were buried to protect his own behind. He forgot about the investors, many of whom would have lost enough money to notice, and who would begin to ask questions. He forgot about the press, whch back then was his friend, but which changes stripes as soon as blood hits the water. He did very well, for a while, escaping with a $32 million "severance package". That escape is merely momentary, apparently.
Want to know how this is all going to end?
Jack Grubman will be convicted of something, pay the requiste fines, avoid jail and become a "silent consultant" someplace else, raking in big bucks. Sandy Weill will retire (rumored to be coming for at least 10 years now), pay is fines and go back to counting his wealth and putting his names on hospital wings in New York City. No one will do any jail time since the lawyers will tiee this one up for years and since, nod and a wink, it wasn't like we were Enron, was it? Well, yes, you were Enron, in the sense that you did something wrong. Incidentally, if I recall, Citi was up to it's collective backside in Enron, too. Grubman also had a lot to do with the Global Crossing fiasco as well. The "system" will correct itself, displaying to all the world that they have truly learned their lesson, and when no one is watching them anymore, go right back to doing what they were doing anyway. It's always been done this way and it will never change.
If you want my advice on what to do with your money, you're asking the wrong person. However, if you want some advice on what the truth is about Wall Street and the scum that works on it, I can tell you the following:
- A stockbroker is a licenced bookie in a suit.
- You'll bever get "in on the ground floor" of anything. By the time the small potatoe investors get calls from their brokers, the firm has already made it's money, the broker made his, and now they're pumping up prices on your dime, so thatthey can make more later.
- Anything in which you still pay, win or lose, is something that requires your full attention. You paid for expert advice and if you want to take it, you should have enough common sense to follow up on it. Hold them accountable, hold them responsible, but for God's sake, don't absolve yourself of responsibility. Yo made the final decision and if you lost, that's your tough luck, or rather, your stupidity for going solely on trust and their say-so. There is no longer nay trust on Wall Street and a smart investor does his own homework.
- Very few, if any, of the brokers you might deal with is an honest individual. He has something to sell you, and he will always put the best eyeshadow on the worst pig and present it to you as the Prom Queen. At the end of the day, a stockbroker is a private firm, Me-Myself-and-I, Inc, and his well-being depends on you, or rather, on taking your money. Ethics on Wall Street went out the window a long time ago. Expect to be ripped off, frequently, and take action to minimize those losses if possible.
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