Art For Sale

Art For Sale

 

 

As higher learning institutions across the country are facing receding endowments, Brandeis is combating their losses by selling off a primary asset, their fine art collection.  The Rose Art Museum, home to a significant collection of modern art will be closed by late summer and transformed into a teaching facility and exhibition center.  Roughly 8000 pieces, including works by Andy Warhol, Walter de Koonig, and Roy Lichtenstein will go onto the auction block, with all proceeds being reinvested into the school. 

 

The art world will alternately wince and rejoice at the relinquishing of so many fine works.  For the prices they will fetch, Brandeis will prosper.  The economy should not hinder the number of suitors; they will be purchased by an echelon that is likely no more than inconvenienced by the current recession.   Of course, that means that each of these pieces will have a greater likelihood of going into a private collection and hang on someone’s wall, though a few will certainly find their way into larger museums and exhibition spaces.  But how many of us truly get to gaze upon original works?  How many have the opportunity to visit El Prado, The Hermitage, The Louvre, the Getty Center, and the Met in their lifetime?  And for those fortunate enough to do so, it is clear that it is only scratching the surface of the world’s great works. 

 

Art is an infinite language, and a wealth of it is held in private collections and residences.   We are exposed to much of it through textbooks, the internet and other media.  I’ve been to half of the museums listed above, and endeavor to make my way to the remainder.  Many of the world’s great works will never illuminate my own eyes, but they are out there to be cherished. My past moments of discovery in the centers above as well as The Carnegie Museum of Art, in the Reina Sofia, or le Musée d’Orsay still resonate in my mind as if they were happened only moments ago.  They always will.  The Rose Museum will close, and its works will be scattered, but they shall all live on future generations.  The loss is sad, but transient.  The art remains timeless.  

 

http://www.nytimes.com/2009/01/27/us/27museum.html?ref=us

Sheltered

How depressing is this?  An article on joblessness imposing hibernation on singles, who cannot afford to date.

(Story, Can’t Buy Me Love http://www.boston.com/lifestyle/relationships/articles/2009/01/24/cant_buy_me_love/)

Yes, dating is expensive.  And I will not make light of someone who watches each and every dollar and chooses to refrain from going out.  But I do not like the psychology within the article that suggests an unemployed person is unworthy.  That is a distorted and unnecessary view.  Certainly I can understand the frustration of unemployment, I have been there and, who knows, perhaps soon I will be there again.  But we are supposed to know who we are.  Our job is not our identity.  Very few people in this world love their jobs, those who do are blessed and in the minority.  A loss of income and occupation can certainly institute a lack of purpose, but we need to rise above that and be who we are beyond our occupations.  If you exercise, perhaps you go to a gym or attend fitness classes, you can meet people there.  If you are a reader you may go to a library, you can meet people there.  If you drink coffee you may go to a coffee shop, you can meet people there.  If you want to meet someone and don’t have money, get involved with a cause and volunteer.  We need to be open to meeting people at any time. It is difficult, daunting, and overwhelming, but we need to try to rise above that.  We cannot be consumed by worthlessness, and being without a job does not make you less of person.  Certainly it may feel that way, and some may treat you that way, but those who do are worthless themselves.  Be true to yourself and understand that your job does not define you.  A lack of income may limit your lifestyle, but does not limit your value.  Open your mind and embrace the world, there is no cost for imagination.

Money is not an indicator of value.  Yes, we all want more money, I do too. But look at the greed that is taking our country down into a death spiral.  People like John Thain, Jeffrey Skilling, Dennis Kozlowski, Bernie Madoff, who have choked the incomes of millions by pursuing their own relentless avarice.  For each one of those deplorable men, there are hundreds arround them, approving their salaries and bonuses, or working for them and straining to reach their level.  That is why our industries are drying up, because they infected with a staggering gluttony of greed that has permeated all levels of our society.  This corruption has become our corruptor.  We need to set ourselves free.

And just for measure, some personal experience.  I have had the pleasure of being dumped by my girlfriend of three years while unemployed.  At a time when I needed support, she walked out the door never to return.  I was heartbroken and devastated.  It took me a significant amount of time to rise out of that depression, but I did rise out of it; before I had another job or another girlfriend.  As the saying goes, what doesn’t kill you makes you stronger.  In that experience, I learned more about my own value and my ex-paramour’s lack thereof.  The love I had believed in was largely an illusion.  Certainly not at the beginning but, on her end, well before my job disappeared.  Illusion, delusion.  That is something we need to learn through each and every relationship, as well as the time between.

Ultimately we need to know who we, ourselves, are.  That is the true path to happiness.  Togetherness can be an illusion.  You can be with someone without really sharing anything true.  And some may choose that over being alone, but that is more of an avoidance of self discovery and understanding.  Just as we should not define ourselves by our jobs, we should not define ourselves by being in a couple versus being single.  There are a great number of unhappy couples out there, which is easy to forget when you are not with someone.  But do not nurse your wishes, because simply finding “someone” does not create happiness.  It is finding the right one. And that cannot happen until you know who you are, which can take a lifetime.  It has for me.

Ousted

Ousted

 

After solidifying Merrill Lynch’s depth charge acquisition by Bank of America, former Merrill CEO and unabashed bonus seeker John Thain is rightfully out of work.  After pulling in over $54 in 2007 from Goldman Sachs, Thain accepted a $15 million signing bonus to become CEO of Merrill Lynch.  In his short time there, he dutifully spent $1.2 million redecorating his office to ensure a comfortable perch to watch as the near century old Merrill steadily moved toward the brink of collapse.  In September, Thain and Kenneth Lewis negotiated the merger of Merrill Lynch with Bank of America; a move that has been nothing but an albatross to B of A.  Despite the precipitous decline of Bank of America based on the poor financial markets and toxic assets of Merrill Lynch, Thain still had the voracious audacity to request a $10 million bonus from the board for his efforts.

 

John Thain was formerly known as a Mr. Fixit, now he should be rightly seen as nothing more than an avaricious parasite seeking to gain from the world’s losses.  A man completely out of touch with his position, oblivious to the responsibility he held for his own workers as well as the general public.  Of course he has already made more money than can be spent in a lifetime, but he should not be allowed to disappear into affluent anonymity. He should rightly become a punchline.  The man is a disgrace who encapsulates the endemic greed that has poisoned and sunk our economy.   No, he is not alone, but his defiant gluttony has brought unwanted fame that business schools and mentors should never allow to fade.  Here is an example of what not to do, of who to guard against, in every business arena.  Think of the jobs that were lost under his distorted and myopic tenure.  Think of how many jobs could have been saved by remunerating just his 2008 signing bonus.  These are the kind of lessons we need to learn from this trying time.  Yes, greed is inherent in humanity and will never be rooted out.  But we can see the poison of greed in our corporate system as we pay its ever increasing cost.  Each day brings more headache and greater struggle to millions; people like John Thain are at the root of the evil.  Do not forget the trustees who granted these salaries, and all the other executives straining for their own share of the pelf.  This whole culture has to change, and that requires public outrage and vigilance.  We have not seen the worst of it yet, but each day someone like Thain is ousted is a step in the right direction.  Good riddance.

 

John Thain Agrees to Leave Bank of America

http://www.bloomberg.com/apps/news?pid=20601087&sid=apwXZlxMaUm4&refer=home

 

A Different Tune

A Different Tune

 

Chrysler is demonstrating a willingness to change through their proposed merger with Fiat.  The two companies produce vehicles at opposite ends of the spectrum, Chrysler producing large, gas-guzzling trucks and SUVs, and Fiat producing small, fuel-efficient economy cars.  The move is one of necessity, as Chrysler is fighting for survival.  But this represents an open-mindedness to find a new path in order to sustain its business. 

 

This is exactly what companies need to do at all times.  However, American auto-makers have been particularly stubborn and resistant to change.  Their obstinance has led them to the point of collapse.  Forced to plead Congress for bailout funding, the government rightly imposed upon the automakers a quick deadline for a revised business model.  In order not to forfeit the $4 billion they received, Chrysler has until March 31 to implement plans for a new business model offering innovation, reduced debt and reduced labor costs.  Again, that is the general goal of any business worth their salt, but clout and power corrupt.  And we are witnessing the price that must be paid.  While the auto-makers appealed to the government for assistance, they were unprepared on their first attempt to face reality.  Looking like a bunch of spoiled brats expecting a blank check, trying to be certain they still had a chair once the music stopped, they had no refined vision, no plan to lift their companies out of the morass they had presided over. The government wisely learned from the mistakes made by the vagaries of the financial bailout, and sent the automakers home to do some reflecting and number crunching.  Their return plea was accepted, their funds granted, but with clear accountability. 

 

Chrysler is responding to the challenge.  Fiat offers them wider distribution, and more efficient vehicles.  Sales should increase, allowing debt to decrease.  The impending collaboration should help Chrysler catch up with the times, and not rely solely on hulking trucks and SUVs.  The world is getting smaller, and is no longer the United States’ oyster.  Cars are getting smaller too.  The demand for broad, powerful trucks will always be there.  But is not the vehicle of choice for the masses.  By expanding its offerings and opening itself to more foreign markets, Chrysler is making a move that is right for the times.  What is more encouraging is that the government bailout seems to have made a positive impression on the corporation.  Let’s hope that’s contagious for all businesses receiving federal funds. 

 

Fiat to Claim 35% Stake in Chrysler:

http://www.boston.com/business/articles/2009/01/21/fiat_to_give_chrysler_technology_markets/

 

The Work Begins

The Work Begins

 

Today begins the reality of a new administration, in a very daunting time for the U.S.  The top priorities are stabilizing our economy and restructuring our military operations.  Though there are a myriad of additional challenges, one area that will soon come into focus is healthcare, which was a prime focus of Americans before the economic downturn.  In fact, the economy’s rapid deterioration is raising our healthcare crisis back to the surface. 

 

Since World War II, the majority of healthcare in this country is employer sponsored.  The skyrocketing costs of healthcare premiums have somewhat limited the prevalence of employer sponsored benefits, but employers still provide the vast majority of health insurance and healthcare is an employer’s second highest expense after payroll.  Beyond that, Americans still expect healthcare as a priority of their compensation.  What companies have had to do is share premium costs with their employees; one hundred percent coverage sliding down to ninety, seventy five, or even sixty percent, with the employees paying the remainder as a payroll deduction.  But as more and more companies falter, the ranks of the unemployed are increasing.  And as Americans lose their jobs, they are also losing their healthcare.  Although a former employee was used to paying a share of their healthcare premium, the true cost of health insurance is largely shielded from Americans.  The cost is staggering.  The average cost of family health insurance in 2009 is over $12,000.  Does paying over $1000 a month in premium seem reasonable?

 

Over the past decade, healthcare premiums have risen over 90%.  With no signs of slowing down, our healthcare is simply becoming unattainable for most Americans. The cost is driving many of our corporations into the ground, causing more layoffs, leading to fewer insured individuals who have no choice but to seek care in emergency rooms, which then makes the costs of healthcare premiums rise even higher for those who are insured.  What is truly sad is that, for spending more than any other country, our level of care is average compared to the rest of the world. 

 

Something must be done.  Healthcare insurers need to realize that a sea change is coming.  There needs to be a unified effort on behalf of the insurers and our government to find a solution.  The task is overwhelming, but the need is critical.  There are a variety of theories and approaches being discussed, all of which have their flaws as well as merits.  Highlighted here is Nobel-Prize winning economist Paul Krugman’s assessment and outline for a solution. (Story, http://www.healthcarefinancenews.com/story.cms?id=9173 ).

 

Please offer your own thoughts and join the discussion. 

 

 

Americans Want Healthcare Addressed

http://www.healthcarefinancenews.com/story.cms?id=9174

 

Workday #1

http://www.google.com/hostednews/ap/article/ALeqM5hJWeCOYuQewzuUL02wnZAZwFScgwD95RJ1Q80

Initiative

Initiative

 

Today is certainly a day of change and progress in the United States of America.  President Obama’s unprecedented victory is cemented.  Now is the time for leadership and action.  Our new president made a bold step by immediately addressing the myriad of challenges facing our nation.  He did not shy away from a crippled economy, overtaxed military, and tarnished global reputation.  Yet he did relent in his pledge to lead this nation in overcoming these factors.  Change will not come overnight, and will not be single handed.  Our lethargy and pride have enabled captains of industry to hollow out our economy with their greed, and our previous leaders to dupe us into believing in an immediate military threat.  Now comes a time for shared vigilance.  Our new president has addressed these challenges, and asked us, as a nation, to respond in concert.   Progress will take time, and require maximum effort, but with that effort hope can overturn despair.  This is the promise of leadership.  There are no guarantees.  But the goal is outlined.  Today we begin anew. 

Eroding Giant

TARP Case Study

 

Below are articles outlining the use of TARP funds by Bank of America, which is taking on water thanks to their acquisition of Merrill Lynch.  As bad as the news is, the details provide a productive use of bailout funds, but it certainly is alarming to see that, not only the toxicity of Merrill Lynch, but also the awful (and high priced) recommendation of outside consultants J.C. Flowers and Fox-Pitt.  Since announcing the merger, Bank of America stock has lost over 75% of its value.  In order to stabilize, the company is now preparing to lay off 35,000 workers.  This begs a reiteration of the question, what on earth did John Thain (CEO of Merrill Lynch) expect a $10 million bonus for? 

 

Details of the Additional $20 Billion for Bank of America to Stave Off Crisis Caused by Merrill Lynch Acquisition:

http://money.cnn.com/2009/01/16/news/companies/bofa_new_bailout/?postversion=2009011609

 

Colin Barr’s Editorial on Bank of America’s Toxic Acquisition of Merrill Lynch: 

http://money.cnn.com/2009/01/15/news/bofa.unfair.fortune/index.htm?postversion=2009011515

The Call For Transparency

The Call For Transparency

The public demand for transparency concerning bailout funds is mounting.  On Monday, Fox News filed suit against the Fed for its refusal to declare details regarding the Troubled Asset Relief Program, citing a violation of the Freedom of Information Act.  This is a bold and exemplary move.  The impetus for the case comes from a November request of the FED by Fox Business News for full disclosure on the source, recipients, and use of TARP funding.  The FED denied the request, and now Fox News is taking them to court on behalf of our public right to know how our money is being spent.  (Read story, http://uk.reuters.com/article/marketsNewsUS/idUKN1235009220090112)

Further insistence is brought today by The Huffington Post, where Thomas B. Edsall highlights the duplicity of statements that were made at the time TARP funding was awarded and the actions we have witnessed.  (Read story, (http://www.huffingtonpost.com/2009/01/08/the-end-of-bailout-transp_n_156472.html)  As Edsall states in his piece, this story is not taking center stage on our media outlets.  Certainly, in consideration of the multiple entries in this space on the same topic, I agree. 

Again, without a public demand for accountability, our country will only sink further into the oblivion caused by corporate duplicity and hubris.  The fact that two seemingly disparate media outlets, Fox and Huffington, are rallying for the same cause is a triumph.  This is not a partisan issue, it is a national issue.  Beyond that, it is not limited to the bailout, it is an example of the ethical chaos that has caused our financial devastation. This is our money, we are entitled to accountability.  The architects of the bill said so themselves.   

We Need More

We Need More

 

The era of the bailout thickens.  FED Chief Benjamin Bernanke made public comments stressing the urgency of releasing the remaining $350 billion of TARP funding to banks.  The move is expected to put pressure on the House to release the funds in concert with the request of President-elect Barack Obama.  However, as I have highlighted a few times in this space, we still have no clear window into how these institutions are utilizing the funds they have already received.  The Associated Press targeted 16 institutions for disclosure and was summarily denied.  With his comments, Bernanke is acknowledging the severity of our economic predicament, which also outlines his own underestimation of the crisis just a few months ago.  The lack of transparency in the use of TARP funds is well documented.  Yesterday, the FDIC requested banks disclose their use of the funds.  Not surprisingly, this request was met defensively by the banking industry.  As the FDIC is trying to ensure that these funds are being used for lending to ease the credit crisis, and to make certain they are not being moved into bank reserves.  For some reason the banks are refusing full disclosure.  They were willing to concede some broad declaration.  This is ludicrous.  If any of us were to apply for a bank loan, we would have to supply the bank with our exact intention for the funds.   Now that the banks are on the receiving end of federal loans, the rules are different.  This is hypocrisy, plain and simple. 

 

Senator David Vitter (R-La) has introduced a measure to block the release of the remaining TARP funds.  The hopeful outcome of this action, from my standpoint, is that we can solidify a framework for the responsible use of this massive loan.  Without negating the need of federal assistance to solidify the financial industry, it is necessary to determine transparency.  If indeed further federal funding is necessary to stave off total economic calamity, we should be all the more determined to know the exact use of our tax dollars to determine what is working and what is not.  If these corporations are unwilling to disclose their business practices, it only adds to skepticism of their business practices.  Until proven otherwise, it is fair to presume these funds are being hoarded in their reserves, to pay egregious bonuses to high level executives, and further misuse that has resulted in their own demise.  Without clear parameters and disclosure, the government is throwing our money away on supercilious business leaders who will only bring our economy down even further in an effort to maintain their own stake. 

 

Capitalism is a system that ensures survival of the fittest, and that means yesterday’s giant may be today’s memory.  If that is the case, so be it.  The uncertainty of these times will provide opportunity for new names with better business practices and greater efficiency.  Some of the giants of today will fade and even fail due to their own mistakes.  The giants of tomorrow will incorporate those lessons to create a better environment.  That is how capitalism works.  Ultimately, bailout funds are for our greater national economic survival.  They are not life rafts for a sinking ship.  If more money is needed, we need to know why.

 

 

 

 

 

Bernanke urges release of TARP funds and need for additional Federal Funding

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aic5mGSBvQ4E

 

FDIC asks receiving banks for disclosure on TARP funding

http://www.bloomberg.com/apps/news?pid=20601087&sid=atDyzLXtnMRU&refer=home

 

Senator Vitter introduces measure to block release of remaining TARP funds

http://www.reuters.com/article/politicsNews/idUSTRE50C4YQ20090113

The Ties That Bind

The Ties That Bind

 

 

Senate Democrats are using the leverage provided by their TARP funds to advance pro-consumer legislation.  Senators Charles Schumer and Richard Durbin are leading advocates of a bill designed to give courts the power to renegotiate mortgage terms for consumers who have filed for Chapter 13 bankruptcy.  If passed, this would limit the power of mortgage lenders, and transfer it to judges and lawmakers. 

 

Not surprisingly, the American Bankers Association is vigorously opposed to this measure.  This bill, if passed, would enable bankruptcy judges the power to lower interest rates, reduce principal, reduce the initial terms of a mortgage, or any combination of the three.  Clearly, that is a threat to the lenders, as it shifts leverage to consumers based on the discretion of the judge. 

 

What is most interesting about this case is the vocal support it has received from Citigroup, one of the nation’s largest lenders.  Citigroup’s CEO spoke out yesterday as an advocate of the bill stating, “Given today’s exceptional economic environment, we support its passage.”   If this bill does indeed pass it could provide a radical shift in consumer protection, and pull away from the corporate dominance that has increasingly controlled our legal system in recent decades.  It would be a key strike against the entitlement of corporations, who have had the power of lobbies to shift our laws in their favor. 

 

Certainly the American Bankers Association will not let this pass without a fight.  But it is fascinating to see that they have already lost a stalwart ally in Citigroup.  And while there is some due praise in Citigroup’s support of the measure, it was undoubtedly an imposed position.  And it is our congress, and our tax dollars that have facilitated this move.  As Citigroup has received over $45 billion in TARP funding, they are experiencing a loss of autonomy.  In order to maintain a positive relationship with the federal government, and to avoid collapse, they were likely pressured into supporting this political measure, with the thought that their support would encourage the support of their peers. 

 

Of course we are seeing the ABA speak out on behalf of the industry in opposition to the bill, in order to maintain their own influence and autonomy.  But let’s strip down the situation for what it is, certain lenders were giving out unjust loans, and then bundling those loans as investments to other banks.  When those holdings went toxic, they went to the government for support to stay afloat.  They received their bailout, and have yet to provide any transparency into how those funds are being utilized.  In essence, they are still looking to maintain the status quo.  They want a handout to keep performing the same policies that have sunk their own businesses and helped to collapse our national economy.  The actions of Citigroup evince a true positive result of the bailout, the limiting of corporate governance.  A governance that these corporations in particular have shown they do not deserve. All banks have that received bailout funds are no longer autonomous, they are nationalized.  The taxpayers are minority owners, and the taxpayers are consumers.  Consumer protection cannot be seen as a threat by these financials, it should be seen as a result of their bad business. 

 

 

 

http://online.wsj.com/article/SB123144562914865337.html?mod=special_page_campaign2008_mostpop

 

http://uk.reuters.com/article/marketsNewsUS/idUKN0928875620090109