March 15, 2010
Here are a few items I noticed this morning on the wires:
Contrary Indicators: US consumers apparently fought their way to the mall through snowstorms last month as retail sales rose, surprising analysts. At the same time, measurements of consumer confidence slipped, suggesting that people are still worried about high unemployment. What to make of the contradiction? Watch what they do, not what they say. Consumers are beginning to spend; that says the economy is getting better.
Lehman Liars: The collapse of Lehman Brothers in the fall of 2008 was one of the main triggers of the financial panic of the last two years. Now an auditor's report is suggesting that Lehman's top brass was using questionable accounting to hide the firm's fatal weakness from investors. Yet another story of top corporate executives cooking the books? What a shock! Thousands of investors lost billions and many rank-and-file Lehman employees struggled with unemployment after the bankruptcy. Time to go after Lehman's former management and auditors - with criminal fraud charges if necessary. Where is Eliot Spitzer when you need him?
Thanks AIG: For the second time since receiving nearly $200 billion in taxpayer-funded bailout cash, AIG is set to pay bonuses to employees. Now we are supposed to be happy that AIG will only pay $46 million in bonuses instead of the expected $67 million. I am still scratching my head over this. AIG, one of the worst run insurance companies on record, is paying bonuses for what, exactly? We are told that AIG is contractually obligated to pay, and that they need to retain good employees. Why pay people who drove the firm to ruin? With the billions that taxpayers have provided it seems to me that AIG could hire a few lawyers to abrogate those bonus deals. And since when is "good" performance defined as requiring $200 billion from taxpayers just to stay afloat?
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