Friday, January 23, 2009

The Golden Bog Award

Britain has gone Oscar-crazy. Macro Man is utterly oblivious to "celebrity culture", and while he once memorized every winner of the Heisman Trophy whilst in high school, he couldn't tell you a single Oscar winner last year other than that for Best Song. Regardless, the papers are full of pictures of Kate Winslet, trumpeting a forthcoming "Brit cleanup" at the Academy Awards, whenever they may be.

In any event, Macro Man is proud to unveil the finalists for the first annual Golden Bog awards, honouring the assets and people that have exhibited the most turd-like behaviour. As you can probably imagine, the list of semi-finalists was exhaustive, and the gnomes at Macro Man Industries have been working overtime to winnow it down to three finalists.

And now welcome to the stage a member of the Golden Bog Awards official auditors, Friehling and Horowitz, with the three nominees:

1) The Financials! (cue a rousing cheer....) Eighteen months into to the market and economic crisis, we are still seeing writedowns, the emergence of hidden losses, and accelerating government bailouts. Single digit stock prices (or sub £1 in the UK) are now virtually de rigeur, and finding credit at a reasonable price is only slightly easier than finding Eldorado.

2) The Russian Rouble! (a smattering of applause....) After preventing currency strength for years, accruing massive reserves, and telling foreigners that you intend to screw invade another country for no obvious reason, sustain a massive negative terms of trade shock, and spend a load of your reserves in a futile attempt to defend your currency from achieving uber-turd status. (Yesterday's announcement of a regime change has not noticably slowed the pressure on the RUB.)
3) John Thain! (cue a round of catcalls and hissing....) Mr. Thain took over at Merrill Lynch in late 2007 armed with a golden reputation and a promise to "kitchen sink" the bad assets on the ML balance sheet. The ensuing fourteen months saw aggregate losses of $34.58 per share, a shotgun wedding to Bank of America, and, yesterday, an ignominious departure.

Putting aside his failure to staunch the losses at Mother Merrill, the suspicious decision to expedite the payment of bonuses just before year end carries with it more than a faint whiff of sulphur- not least because the troops on the ground got stiffed pretty badly, by all accounts. From the outside, the decision to pay himself and his cronies just before the BOA merger looks to be bordering on criminal.
But what really cements Thain as the winner of the first annual Golden Bog Award was his decision to spend $1.2 million doing up his office last year, including spending $35k on what Macro Man can only posit was literally a golden bog.

So congratulations to John Thain, winner of the Golden Bog Award! Mr. Thain is pictured below accepting his award.


pupkinus said...

Could you award Alan Greenspan for the Golden Bog Lifetime Achievement Award?
If not for the policy of Mr Greenspan, the candidates for this years award would have been few.

PS. RUB and Russian Stock market went down because of oil going down. period. If you doubt this statement I can post links to a chart comparing RTS or MICEX-10 index to Norway's OMX index. The correlation is incredible (almost 0,9) and Norway obviously had no wars.

Damcanu said...

Aye, fancy spending $35,115 on a Commode on legs .... why couldn't he use the toliet down the end of the corridor like everyone else.

Sod this trading game, I should have gone to Chauffeur school and tried to get a job driving JT around for $230k a year !!!

Daniel said...

You were among a handful of blogs "mated" at Systemically Important today.

Your bit:

"What would happen if the Hubble Telescope, noted for its ability to see far beyond what any normal person can, mated with the lyrical talent of Bob Dylan? A blog written by Macro Man of course."

Anonymous said...

monday new moon with eclipse of sun, and china will be closed for it’s whole new year week, the year of the ‘ox’

the post election year chart seems to agree with a 2/18 low:

on weekly the VIX flirted with 20wema this week and bounced, and adx is ‘holy grail’ high on weekly, same as it is in US and TY (who need a couple more points south to get to 20wema)


Bob said...

So lets tally up Goldman Sachs total contributions to the world of late:

1) Jon Corzine is governor of New Jersey, which by most accounts is at least as bankrupt as California
2) Bob Rubin postponed (but did not solve) problems in Mexico using legally questionable tactics as Treasury Secretary before moving to Citigroup where he earned $15 million a year for strategically guiding Citi into bankruptcy
3) Hank Paulson managed to blow $350 billion of tax payer money to solve the sub-prime crisis which he assured us last year was "well contained"
4) John Thain, after being paid a kings ransom for not really changing anything at the NYSE, ran Merill Lynch for not quite 14 months. He was paid $20 million for not actually fixing anything, and for cutting the pay of staff while he spends $1.2 million on decorations for his personal office? Oh, and the day before BofA takes over, he pays himself and his cronies bonuses -- then lets BofA know the losses on Merill's books are much larger than they first appeared

Fear not! Tim Geithner, an admitted tax cheat, will be running the Treasury, including the IRS... He's been Paulson's right hand man in making sure the banking fiasco is made much worse by inept regulators. Geithner is from Goldman too

Anonymous said...

no he's not...

Bob said...

Sorry-- Geithner is a protege of Bob Rubin, not an actual Goldman alumn. Most of his career (1988-2001) was at the US Treasury, but he says he didn't know he had to pay taxes on his income from the IMF. Then he went to the NY Fed where he "supervised" and regulated primary dealers like Lehman and Bear Stearns, as well as Citibank (where his buddy/mentor Bob Rubin was strategizing how to cost tax payers billions)

Officially, Geithner wasn't Goldman-- but he acts like he is part of the gang

Greg said...

I have to second the nomination of Alan Greenspan for lifetime bog achievement...

So CEO's are always talking about the importance of "being a team player" ... Did Thain buy a $35K toilet for all the members of his team?

Anonymous said...

The troops stiffed? STIFFED? John Thain saw to it that 3-4 billion were paid out in (tax-payer funded) year-end bonuses! It seems to me that an exaggerated sense of entitlement is a job requirement over at Merrill.

Anonymous said...

Anon 5:13

Most of those last minute, tax payer financed, bonuses went to Thain and his deputies

The rank and file troops did not get $35,000 toilets and they got very "blah" bonuses. You might argue they shouldn't get any bonuses at all considering Merill's losses -- but that argument would apply ten fold to the officers at the top

Macro Man said...

Exactly. The horror stories I am hearing from within Merrill- not about pay (which was slashed from last year for my sources), but about hours worked and stress and deciding who stays and who goes- are very, very unpleasant, and suggest that Thain didn't let the goodies stray very far from his golden bog.

Macro Man said...

Oh, and Daniel, thank you for the kind words. Alas, I fear you have mislabeled me slightly...the only way I compare to Dylan is with respect to the calibre of my singing voice.

Anonymous said...

Macro man, you are hilarious. Keep it up!

Anonymous said...

The Thain remodeling brings to mind something that first came to mind when the heads of the "Little 3" flew to Washington on corporate jets to beg for Federal largesses, yet I saw nothing anywhere. Both in the Thain affair, and the brass of the "Little 3".

Whatever idiot had the title of Executive VP of Public Relations should have been sacked forwith for falling down miserably in preventing such behavior.

Just sayin'...

old trader

Anonymous said...

Anon 5:48
Thain must have a pretty big troop of deputies if most of 3-4 billion went to them. Thain himself took 10 million and that seems to have been the ceiling for the rest.

Anonymous said...

John Thain is a criminal, he has discredited our industry and done irreparable harm. I hope he goes to jail.

Anonymous said...

Anon 10:49

If you think a man who gave himself $35,000 for a toilet is going to settle for "only" $10 million, I have bridges and swamplands you may be interested in purchasing.

First, Thain "got" a signing bonus... this was "owed" to him, but may or may not have been actually paid as of BofA's acquisition date. Any deferred compensation got paid.

Second, someone as arrogant as Thain is not going to give up a $20 million a year job at the NYSE and work for less than half of what other Wall Street CEOs were paying themselves

Third, most CEOs have "change of control" clauses and/or golden parachute clauses in their contracts. Since control of Merill passed to BofA ... Thain got himself a windfall for (maybe) 14 months work

For someone with Thain's bloated ego, an entourage of 200 or so people would not be unexpected. His chauffer got $230K for one year -- so imagine what lawyers or other advisors might get.

Add in the traders / salesforce cronies that Thain brought in...

Anonymous said...

I just read in the FT that Thain was envisaging deep personnel cuts... at BoFA. At the company buying his company. At the company that posted a relatively modest loss compared to Merrill's eye popping and eye watering 15+ billion in losses.

Wonder if the people at Merrill really felt that insecure about their workplace before Thain was heaved out the door.

How did the man with the golden touch turn out to be so extraordinarily out of touch?

Daniel said...

No worries. That whole post was sort of a payback for the sites I really like.

One of the main things I enjoy about this site are the macro view, particularly when coupled with a song or a story.

Obviously not the only one who thinks that, but I wanted to do my bit of small justice...