The Wall Street Journal has an article today entitled, Mack and Thain Lose ‘08 Bonuses.
We’re neither sympathetic nor antagonistic towards Mr. Thain, who has only been in his position for a year; so, we take no glee in his being shut-out.  Hopefully, he’ll be able to make-do with his $750,000 salary, $15-$20 million signing bonus from […]

In the thirty-five years since the first “energy crisis,” have Chrysler, Ford, or GM avoided a single management fad?
Have their collective managements through the years embraced of any single fad that led to sustainable improvements anywhere?
Now, it is true that many fads—and we are using that word pejoratively—contain useful recommendations and are consistent with effective and efficient management.  However, […]

Does the Sum of Idiosyncratic Decisions Mean Anything?
There’s an article in the weekend edition of The Wall Street Journal, entitled, It’s a Done Deal: Merrill and BofA.  It is subtitled, “At Thundering Herd’s Last Meeting, Thain Presides Over Sadness and Anger.”
In previous posts we’ve already commented on a variety of related topics, including our dislike of mega-mergers, which […]

A Variety of Risk & Incentive Ideas All in One Post!
There is an article in The Wall Street Journal today entitled, Citadel’s Losses Add to Mr. Griffin’s Pain.
We’re rather indifferent to Mr. Griffin’s pain as we’re sure that he is to ours, but that’s not why we are writing.
We mention the article because it relates to earlier postings and provides […]

The Curious Case of Robert Rubin
The weekend edition of The Wall Street Journal has a front page interview with Robert Rubin: Rubin, Under Fire, Defends His Role at Citi.
We’ve criticized Citi’s board in the (recent) past, and we’re still particularly fixated on the fact that few directors had financial industry experience.  That seems neither wise nor even prudent for a financial […]

This post greatly expands upon a comment we made about regulation in Even A Perfect Bailout Will Fail and possibly elsewhere.
Regulators as wise monkeys.
Today’s The Wall Street Journal has an article entitled, Bank Examiners Are Told to Step Up Sanctions on Lenders.
The first sentence of the article says it all: “The U.S. government’s armies of bank examiners have been ordered to […]

Note: We’ll likely expand and edit this post in the morning, but wanted to circulate the idea before bedtime.
We’re rather diligent—but not obsessed— about keeping up with financial new.1  We’ve heard many financial firms announce lay-offs and have read how at a few, like Goldman, senior managers have decided to forgo bonuses.
As we recall, most banks have […]

We very much enjoyed the article, As Firms Flounder, Directors Quit, in today’s (November 21) Wall Street Journal.
The title completely summarizes the content: as many firms have faced financial difficulties, outside directors have quit because they’re “too busy” to direct the firm that they agreed to help direct before it was in such dire trouble.
A week ago […]

We hope that his earlier actions haven’t caused irreparable damage, but we’re doubtful.
This is a longish post that covers several aspects of the ongoing financial crisis and, for the convenience of new visitors, contains plenty of reference links to earlier posts.
In our mind, until last week, the current Treasury Secretary had an incredibly long and unbroken string of wrong […]

…And Your Mother Wears Combat Boots!
Back on Halloween we wrote that Sarah Palin’s experience as mayor of a small town was greatly under-appreciated, and that lack of appreciation said more about her critics’ inexperience and lack of empathy than did it about her.
In fact, we related her experiences to Henry Kissinger’s quote about academia: the (in)fighting is so vicious precisely […]

Analogously: The Gangs That Can’t Shoot Straight
Last week in The Understatement of the Year! we wrote, “The problem, dear reader, is that few senior managers (and almost no board members) understand the valuation and risk models used for securitizations…”
Today, there is an article in The Wall Street Journal, Citi Directors Mull Replacing Chairman, that provides additional evidence to support our claim.
To be frank, unless it […]

Behind AIG’s Fall, Risk Models Failed to Pass Real-World Test.
You Don’t Say! Our subtitle is the title of today’s Wall Street Journal front-page article about AIG (obviously).
As always we’ll point interested readers to our essay, Uncertainty Management, which emphasizes the broader notion of unmeasurable uncertainty over the narrower notion of (measurable) risk, and therefore permits really bad […]

As the IMF, the G7 and the President “endeavor to persevere,” we have of own recommendation to end the global financial crisis.
We’re Not Socialists or Statists:
We very much believe in freedom and personal responsibility; strongly prefer private enterprise to government services and bureaucracy; prefer democracy—well, republican democracy, at least—to centralization and authoritarianism (except in matters of religion); and […]

Today, October 11, we’ve been organizing our thoughts about the ongoing financial crisis.  We’ll have more to say about ways to remedy the immediate crisis, but this post contains a specific recommendation for when the crisis ends, which today may seem to be far, far off.  We’re sure that—whether justified or not—many laws and regulations […]

What Hope of Success with Typical Bureaucratic Efficiency?
We have criticized the “$700 billion” federal bailout of banks for the past two weeks and have done so for a variety of reasons.  (We used the scare quotes to denote the unreliability of the estimate, which seems to have been grasped from thin air.)  We won’t cite all of the […]