This post first appeared on Minyanville.
While AIG (AIG) isn’t the only company eager to send its executives to swanky retreats at lavish resorts, other firms have taken note of the decidedly negative press generated by its transgressions.
As a result, they're scaling back expenditures, canceling conferences, and generally demanding their employees adopt a lower profile in the T&E (travel and entertainment) department.
Goldman Sachs (GS) recently announced its business travelers would no longer be put up at the Ritz Carlton. BB&T (BBT), a recipient of $3.1 billion in bailout money, also shunned the Ritz, canceling a March event for top sales people.
This trend bodes ill for states like Florida, a popular vacation destination for firms looking to reward star employees. According to the Wall Street Journal, in the last quarter of 2008, Florida tourism dropped more than it has at any point since the period following September 11. Hotels are receiving cancellation requests from companies wary of showering employees with expensive trips as others lay them off in droves.
Stranger still, this new allergy to perks extends even to language. One client of Amelia Island Plantation, an upscale resort north of Jacksonville, even told the hotel it wouldn’t consider a location whose name had the word “spa” or “resort” in it. Another bold customer even asked the hotel to drop the word “Island” from its moniker. (Oddly enough, the word "plantation" didn't sound any alarms.)
Welcome to the Age of Austerity, the polar opposite of our recent love affair with bling for the sake of bling.
Already, we're hearing anecdotes of shoppers uncomfortable with carrying bags emblazoned with the logo of high-end stores like Saks (SKS) or Nordstroms (JWN). Leering onlookers, disgusted at such lavishness, are shaming the well-to-do into buying their overpriced trinkets online. 2009's version of the "walk of shame" isn't down Frat Row on a brisk Sunday morning, but down Madison Avenue during the midtown lunch rush carrying bags from Prada or Coach (COH).
Purveyors of the inessential are hoping this is just a passing fad, that fast times and big budgets will be back faster than you can say AmEx Black Card.
Others, however, are shouting paradigm shift, as credit has distinctly disappeared from the American spending arsenal. Just how long it will be unavailable is anyone's guess. But as the rich are scorned and public displays of wealth are decried, the Age of Austerity rambles on, gaining momentum.
The next thing you know, that little blue box from Tiffany (TIF) will cease to carry the near-magical power to make up for that really really stupid thing you did once you were 12 beers in.
Showing posts with label florida. Show all posts
Showing posts with label florida. Show all posts
Wednesday, March 18, 2009
Wednesday, October 22, 2008
Hedge Fund Cowboy: Screw You Guys, I'm Going Home
This post first appeared on Minyanville.
Slaving away under coma-inducing florescent lights, listening to the ceaseless droning of automaton bosses, watching our best years crushed under stacks of monthly bills - All have distinct benefits.
After all, when it’s over we get to let it all go, head south, lounge in the Floridian sun, sip piña coladas and field visits from begrudging grandkids while our skin prunes, our hair falls out, and our bodies generally deteriorate. Finally, we return to that happy place where someone else gives us baths and spoon-feeds liquefied pears into our toothless mouths.
Unless, of course we get our grubby little paws on a little f&%k-you money in the interim. Then we can offer the world the finger while riding off into the proverbial sunset.
One hedge funder, Andrew Lahde, manager of the small California fund that made headlines by making over 1000% betting against subprime mortgages, is taking his blood money and going home.
Last week, he released a letter explaining his decision, mocking those he took money from, and thanking the “people stupid enough to take the other side of [his] trades.”
Lahde admits that "some people... might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards." He's leaving the business he now abhors.
Lahde lauds the creation of a new world order, free of the rotten values of our failed capitalist state, while extolling the virtues of hemp, the much-maligned sibling of its more popular -- and more enjoyable -- sister, marijuana. According to Lahde, hemp, “unlike alcohol, does not result in bar fights or wife-beating.”
He appears to be one of the few who are successful enough, and disciplined enough, to know when enough is enough. However, his success did come at a cost: “I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past 2 years, as well as my entire life.”
ING (ING), the ubiquitous orange-tinted Dutch bank, runs an ad campaign that asks savers the slightly alarming question, “What’s your [retirement] number?” Retirement, it seems, could be just a mouse-click away.
Ask any banker, or aspiring investment banker, and they have a number too.
But that number doesn’t include years of working for the man, adhering to antiquated populist notions like “putting in your time” or “paying your dues.”
Instead, such a pursuit often requires abandoning such luxuries as "personal time" or "vacations" or "family" while biting, scratching and kicking through the ranks of Goldman Sachs (GS) or Merrill Lynch (MER) in the hopes of reaching that pedestal from which money can snatched from the trees upon which it's rumored to grow - assuming that trees can grow anywhere in lower Manhattan.
Most, much to their chagrin, never do set sail on that 72-foot Hatteras Motor Yacht, complete with scantily clad South American models (of the gender of their choice) hanging off the bow.
Indeed, as deflation takes hold, the social mood shifts away from consumerism and we collectively realize that it is indeed possible to be happy with less, rather than more, Lahde may simply be the first in a long line of pilgrims headed toward a simpler life.
Slaving away under coma-inducing florescent lights, listening to the ceaseless droning of automaton bosses, watching our best years crushed under stacks of monthly bills - All have distinct benefits.
After all, when it’s over we get to let it all go, head south, lounge in the Floridian sun, sip piña coladas and field visits from begrudging grandkids while our skin prunes, our hair falls out, and our bodies generally deteriorate. Finally, we return to that happy place where someone else gives us baths and spoon-feeds liquefied pears into our toothless mouths.
Unless, of course we get our grubby little paws on a little f&%k-you money in the interim. Then we can offer the world the finger while riding off into the proverbial sunset.
One hedge funder, Andrew Lahde, manager of the small California fund that made headlines by making over 1000% betting against subprime mortgages, is taking his blood money and going home.
Last week, he released a letter explaining his decision, mocking those he took money from, and thanking the “people stupid enough to take the other side of [his] trades.”
Lahde admits that "some people... might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards." He's leaving the business he now abhors.
Lahde lauds the creation of a new world order, free of the rotten values of our failed capitalist state, while extolling the virtues of hemp, the much-maligned sibling of its more popular -- and more enjoyable -- sister, marijuana. According to Lahde, hemp, “unlike alcohol, does not result in bar fights or wife-beating.”
He appears to be one of the few who are successful enough, and disciplined enough, to know when enough is enough. However, his success did come at a cost: “I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past 2 years, as well as my entire life.”
ING (ING), the ubiquitous orange-tinted Dutch bank, runs an ad campaign that asks savers the slightly alarming question, “What’s your [retirement] number?” Retirement, it seems, could be just a mouse-click away.
Ask any banker, or aspiring investment banker, and they have a number too.
But that number doesn’t include years of working for the man, adhering to antiquated populist notions like “putting in your time” or “paying your dues.”
Instead, such a pursuit often requires abandoning such luxuries as "personal time" or "vacations" or "family" while biting, scratching and kicking through the ranks of Goldman Sachs (GS) or Merrill Lynch (MER) in the hopes of reaching that pedestal from which money can snatched from the trees upon which it's rumored to grow - assuming that trees can grow anywhere in lower Manhattan.
Most, much to their chagrin, never do set sail on that 72-foot Hatteras Motor Yacht, complete with scantily clad South American models (of the gender of their choice) hanging off the bow.
Indeed, as deflation takes hold, the social mood shifts away from consumerism and we collectively realize that it is indeed possible to be happy with less, rather than more, Lahde may simply be the first in a long line of pilgrims headed toward a simpler life.
Monday, August 25, 2008
FDIC Passes Around Collection Plate
This post first appeared on Minyanville.
Poor, poor FDIC - ever the Treasury Department’s whipping boy.
The latter gets to smack the former around like a badminton birdie because the FDIC’s primary responsibility is to clean up the Treasury’s messes. And these days, there are messes aplenty.
It goes like this: The Treasury oversees a regulatory body called the Office of Thrift Supervision, or OTS, that’s tasked with keeping tabs on federal thrifts (which are just mortgage companies moonlighting as federally chartered banks).
Until recently, the OTS was responsible for monitoring IndyMac Bancorp, which collapsed last month under the weight of misplaced mortgage bets. The FDIC is now sorting out the mess. The OTS also oversees such thriving institutions as Washington Mutual (WM), BankUnited (BKUNA) and Downey Savings (DSL).
Since the OTS’s idea of regulation is apparently to wake up late, sip a latte and spend the day diligently ignoring the wildly unsafe lending practices of its member banks, the FDIC is up to its ears in barely solvent financial institutions.
The FDIC charges deposit-taking institutions fees about $0.05 per $100 in deposits to display the group’s goofy logo (which dates to its Depression-era roots). This is meant to assure customers their money's safe, even if the bank’s risk management policies aren't.
When banks go belly up, the FDIC steps in and covers depositors up to $100,000. In the case of IndyMac, this could cost up to $8 billion. The FDIC’s insurance fund stood at just $53 billion pre-IndyMac, and is now so low it’s been forced to come up with an action plan to raise more money.
The options aren't exactly palatable.
It could jack up the fees it charges member banks, but with so many teetering on the edge of insolvency, they don’t exactly have a lot of cash to spare. The FDIC also has a $30 billion line of credit from the Treasury Department, but it’s loath to tap into it, lest it appear desperate.
Finally, it could borrow from the Federal Reserve, and join other flailing institutions like Lehman Brothers (LEH) and Merrill Lynch (MER), both of which have submerged themselves the warm bath of cheap Federal money.
As the credit crunch migrates outward from its epicenter on Wall Street and infects Main Street, local banks and thrifts are becoming ensnared in troubles previously reserved for complex securities firms. Small banks are often heavily levered to construction firms, small businesses and individuals in their surrounding communities, and are particularly vulnerable to regionalized economic slowdowns.
Downey Savings (in Orange County) and BankUnited (in South Florida), for example, are at the heart of the housing bust. Their local economies are sagging under the weight of job losses in both the construction and mortgage industries, as well as fallout from plummeting home prices. Both banks bet heavily on ill-fated Option ARMs during the boom, and neither is likely to survive the current crisis.
Now, the FDIC's challenge is to raise sufficient funds to cover the coming wave of bank failures - without putting undue stress on the already shaky banking system or igniting fears that it would need to tap taxpayers' money to protect, well, taxpayers' money.
Poor, poor FDIC - ever the Treasury Department’s whipping boy.
The latter gets to smack the former around like a badminton birdie because the FDIC’s primary responsibility is to clean up the Treasury’s messes. And these days, there are messes aplenty.
It goes like this: The Treasury oversees a regulatory body called the Office of Thrift Supervision, or OTS, that’s tasked with keeping tabs on federal thrifts (which are just mortgage companies moonlighting as federally chartered banks).
Until recently, the OTS was responsible for monitoring IndyMac Bancorp, which collapsed last month under the weight of misplaced mortgage bets. The FDIC is now sorting out the mess. The OTS also oversees such thriving institutions as Washington Mutual (WM), BankUnited (BKUNA) and Downey Savings (DSL).
Since the OTS’s idea of regulation is apparently to wake up late, sip a latte and spend the day diligently ignoring the wildly unsafe lending practices of its member banks, the FDIC is up to its ears in barely solvent financial institutions.
The FDIC charges deposit-taking institutions fees about $0.05 per $100 in deposits to display the group’s goofy logo (which dates to its Depression-era roots). This is meant to assure customers their money's safe, even if the bank’s risk management policies aren't.
When banks go belly up, the FDIC steps in and covers depositors up to $100,000. In the case of IndyMac, this could cost up to $8 billion. The FDIC’s insurance fund stood at just $53 billion pre-IndyMac, and is now so low it’s been forced to come up with an action plan to raise more money.
The options aren't exactly palatable.
It could jack up the fees it charges member banks, but with so many teetering on the edge of insolvency, they don’t exactly have a lot of cash to spare. The FDIC also has a $30 billion line of credit from the Treasury Department, but it’s loath to tap into it, lest it appear desperate.
Finally, it could borrow from the Federal Reserve, and join other flailing institutions like Lehman Brothers (LEH) and Merrill Lynch (MER), both of which have submerged themselves the warm bath of cheap Federal money.
As the credit crunch migrates outward from its epicenter on Wall Street and infects Main Street, local banks and thrifts are becoming ensnared in troubles previously reserved for complex securities firms. Small banks are often heavily levered to construction firms, small businesses and individuals in their surrounding communities, and are particularly vulnerable to regionalized economic slowdowns.
Downey Savings (in Orange County) and BankUnited (in South Florida), for example, are at the heart of the housing bust. Their local economies are sagging under the weight of job losses in both the construction and mortgage industries, as well as fallout from plummeting home prices. Both banks bet heavily on ill-fated Option ARMs during the boom, and neither is likely to survive the current crisis.
Now, the FDIC's challenge is to raise sufficient funds to cover the coming wave of bank failures - without putting undue stress on the already shaky banking system or igniting fears that it would need to tap taxpayers' money to protect, well, taxpayers' money.
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