In 1974 with 36.1% of oil from foreign sources, President Richard Nixon said, “At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need.”
In 1975 with 36.1% of oil from foreign sources, President Gerald Ford said, “We must reduce oil imports by one million barrels per day by the end of this year and by two million barrels per day by the end of 1977.”
In 1979 with 40.5% of oil from foreign sources, President Jimmy Carter said, “Beginning this moment, this nation will never use more foreign oil than we did in 1977 – never.”
In 1981 with 43.6% of oil from foreign sources, President Ronald Reagan said, “While conservation is worthy in itself, the best answer is to try to make us independent of outside sources to the greatest extent possible for our energy.”
In 1992 with 47.2% of oil from foreign sources, President George Bush said, “When our administration developed our national energy strategy, three principles guided our policy: reducing our dependence on foreign oil…”
In 1995 with 49.8% of oil from foreign sources, President Bill Clinton said, “The nation’s growing reliance on imports of oil…threatens the nation’s security…[we] will continue efforts to…enhance domestic energy production.”
In 2006 with 65.5% of oil from foreign sources, President George W. Bush said, “Breakthroughs…will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025.”
In 2009 with 66.2% of oil from foreign sources, President Barack Obama said, “It will be the policy of my administration to reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs.”
Showing posts with label Finance. Show all posts
Showing posts with label Finance. Show all posts
Wednesday, May 12, 2010
Tuesday, May 11, 2010
Goldman Has Zero Trading Loss Days In Last Quarter
If you ever wanted to see what monopoly looks like in chart form, see this:
In the quarter ended March 31, Goldman made money on every single trading day. The firm did not record a loss of even $0.01 on even one day in the last quarter. That's 63 days profitable out of 63 trading days. The statistic probability of this event is itself statistically undefined. Goldman is now the market - or, in keeping with modern market reality, Goldman is the house, it controls the casino, and always wins. Congratulations America: you now have far, far better odds in Las Vegas that you have making money with your E-Trade account.
Adding to the alice in wonderland insanity of this announcement, the firm made over $100 million daily on 35 different days. Of Goldman's $9.7 billion in total Q1 revenue, 76% came from trading. Forget investment banking, forget underwriting, forget advisory: over three quarters of the firm's value is based on being the house to the biggest corrupt casino in existence. Ever.
If you ever wanted to see what monopoly looks like in chart form, see this:
In the quarter ended March 31, Goldman made money on every single trading day. The firm did not record a loss of even $0.01 on even one day in the last quarter. That's 63 days profitable out of 63 trading days. The statistic probability of this event is itself statistically undefined. Goldman is now the market - or, in keeping with modern market reality, Goldman is the house, it controls the casino, and always wins. Congratulations America: you now have far, far better odds in Las Vegas that you have making money with your E-Trade account.
Adding to the alice in wonderland insanity of this announcement, the firm made over $100 million daily on 35 different days. Of Goldman's $9.7 billion in total Q1 revenue, 76% came from trading. Forget investment banking, forget underwriting, forget advisory: over three quarters of the firm's value is based on being the house to the biggest corrupt casino in existence. Ever.
How serious?
The US government spent $175 million investigating the Challenger space shuttle disaster.
It spent $152 million on the the Columbia disaster investigation.
It spent $30 million investigating the Monica Lewinsky scandal.
It authorized only $15 million for the 9/11 Commission.
And how much has the government authorized for the Financial Crisis Inquiry Commission? You know, the commission charged with getting to the bottom of what caused the financial crisis?
Just $8 million.
You can tell alot about the questions which the government is truly interested in finding answers to by the amount of money it authorizes for the various investigations.
It spent $152 million on the the Columbia disaster investigation.
It spent $30 million investigating the Monica Lewinsky scandal.
It authorized only $15 million for the 9/11 Commission.
And how much has the government authorized for the Financial Crisis Inquiry Commission? You know, the commission charged with getting to the bottom of what caused the financial crisis?
Just $8 million.
You can tell alot about the questions which the government is truly interested in finding answers to by the amount of money it authorizes for the various investigations.
Wednesday, December 2, 2009
Business and Finance are very different
Last week, I happened to attend a seminar on treasury and finance organised by EuroFinance at Taj Lands' End, Bandra. Ajit Ranade was the keynote speaker. He spoke about the current financial situation in brief. He also quoted an article that Michael Kinsley wrote in the New York Times in 2007 when Warren Avis of Avis Rentals passed away. An amazing article which I was forced to search and retrieve on the net. I reproduce the article below. I was reminded of the many times we discussed about the importance of the real as opposed to the derivative, about the cake rather than the cream, about drink rather than the fluff. Read the article. I needn't say more.
=====
We Try Harder (but What’s the Point?)
By MICHAEL KINSLEY
Published: May 16, 2007
Seattle
IN 1946, Warren E. Avis (who died last month at the age of 92) had an idea: rental cars should be available at airports. So he founded Avis Airlines Rent-a-Car. In 1954, he sold the company to another businessman, Richard Robie. Two years later, in 1956, Robie sold Avis to an investment group led by a company called Amoskeag. In 1962, the investment banking firm Lazard Frères bought Avis. In 1965, Lazard sold Avis to the giant conglomerate ITT Corporation.
Since 1946, Avis has been sold or reorganized 17 or 18 times, depending on how you count. Each time Avis changed hands or structure, there have been fees for bankers and fees for lawyers, bonuses for the top executives and theories about why this was exactly what the company needed.
In 1972, ITT spun off Avis as a publicly traded company. Then, in 1977, the company was bought by another giant conglomerate, Norton Simon. In 1983, a company called Esmark (formerly Swift & Co.) bought Norton Simon. In 1984, Esmark was bought by Beatrice Foods, and in 1986, Beatrice was bought by the leveraged buyout firm Kohlberg Kravis Roberts & Company.
Kohlberg Kravis Roberts immediately sold Avis to an investment group called Wesray. Wesray sold Avis’s fleet leasing business to a company called PHH Group. Then it spun off Avis’s foreign operations and took them public as a company called Avis Europe P.L.C. And then, in 1987, Wesray sold Avis to its employees under an employee stock ownership program. Wesray more than tripled its money in 14 months.
Two years after the stock ownership deal, the company sold General Motors a complicated security that effectively gave it a 26 percent stake in Avis. Apart from that, Avis’s employee ownership experiment lasted nine years, until 1996, when Avis sold itself to a company called HFS. Employees got an average of $26,000 each. Eighty or 90 current and former Avis executives got an average of $1.75 million each.
A year later, in 1997, HFS took Avis public. (The initial public offering raised just over $330 million. The banker Bear Stearns charged $15 million for its services.) In 1999, Avis bought PHH. Remember PHH? That was the company Avis sold its fleet leasing operation to in 1987. PHH was owned by Cendant, a company that had been formed in 1997 by the merger of HFS — right, the company that had spun off Avis in 1997 — and another company called CUC. HFS had retained 19 percent of the company’s stock when it took Avis public. With the stock portion of Avis’s purchase price for PHH, Cendant now owned 34 percent of Avis.
A couple of years later, Cendant bought the roughly two-thirds of Avis that it didn’t already own and made Avis a wholly owned subsidiary.
In 2006, Cendant split itself into four independent companies, one of which was the Avis Budget Group. (Somewhere along the line, Cendant had also acquired Budget Rent a Car.) The Avis Budget Group became the parent company of Avis Budget Car Rental.
Modern capitalism has two parts: there’s business, and there’s finance. Business is renting you a car at the airport. Finance is something else. More and more of the news labeled “business” these days is actually about finance, and much of it is mystifying. Even if you can understand — just barely — how it works, you still wonder what the point is and why people who do it need to get paid so much. And you strongly suspect that the swirl of financial activity around Avis for the past six decades has had little or nothing to do with the business of renting cars.
Last September, a week after the Avis Budget Group began trading on the New York Stock Exchange, The Wall Street Journal reported that the new company was “ripe for the picking.” Carl Icahn, another wily financier from the 1980s, had acquired a $100 million stake in the company and would not comment about his intentions.
The Journal warned, “If a buyout or acquisition deal doesn’t materialize for Avis, stock and bond investors will have to focus on the fundamentals of its car-rental business.” Goodness! Anything but that!
Michael Kinsley is a columnist for Time magazine.
=====
=====
We Try Harder (but What’s the Point?)
By MICHAEL KINSLEY
Published: May 16, 2007
Seattle
IN 1946, Warren E. Avis (who died last month at the age of 92) had an idea: rental cars should be available at airports. So he founded Avis Airlines Rent-a-Car. In 1954, he sold the company to another businessman, Richard Robie. Two years later, in 1956, Robie sold Avis to an investment group led by a company called Amoskeag. In 1962, the investment banking firm Lazard Frères bought Avis. In 1965, Lazard sold Avis to the giant conglomerate ITT Corporation.
Since 1946, Avis has been sold or reorganized 17 or 18 times, depending on how you count. Each time Avis changed hands or structure, there have been fees for bankers and fees for lawyers, bonuses for the top executives and theories about why this was exactly what the company needed.
In 1972, ITT spun off Avis as a publicly traded company. Then, in 1977, the company was bought by another giant conglomerate, Norton Simon. In 1983, a company called Esmark (formerly Swift & Co.) bought Norton Simon. In 1984, Esmark was bought by Beatrice Foods, and in 1986, Beatrice was bought by the leveraged buyout firm Kohlberg Kravis Roberts & Company.
Kohlberg Kravis Roberts immediately sold Avis to an investment group called Wesray. Wesray sold Avis’s fleet leasing business to a company called PHH Group. Then it spun off Avis’s foreign operations and took them public as a company called Avis Europe P.L.C. And then, in 1987, Wesray sold Avis to its employees under an employee stock ownership program. Wesray more than tripled its money in 14 months.
Two years after the stock ownership deal, the company sold General Motors a complicated security that effectively gave it a 26 percent stake in Avis. Apart from that, Avis’s employee ownership experiment lasted nine years, until 1996, when Avis sold itself to a company called HFS. Employees got an average of $26,000 each. Eighty or 90 current and former Avis executives got an average of $1.75 million each.
A year later, in 1997, HFS took Avis public. (The initial public offering raised just over $330 million. The banker Bear Stearns charged $15 million for its services.) In 1999, Avis bought PHH. Remember PHH? That was the company Avis sold its fleet leasing operation to in 1987. PHH was owned by Cendant, a company that had been formed in 1997 by the merger of HFS — right, the company that had spun off Avis in 1997 — and another company called CUC. HFS had retained 19 percent of the company’s stock when it took Avis public. With the stock portion of Avis’s purchase price for PHH, Cendant now owned 34 percent of Avis.
A couple of years later, Cendant bought the roughly two-thirds of Avis that it didn’t already own and made Avis a wholly owned subsidiary.
In 2006, Cendant split itself into four independent companies, one of which was the Avis Budget Group. (Somewhere along the line, Cendant had also acquired Budget Rent a Car.) The Avis Budget Group became the parent company of Avis Budget Car Rental.
Modern capitalism has two parts: there’s business, and there’s finance. Business is renting you a car at the airport. Finance is something else. More and more of the news labeled “business” these days is actually about finance, and much of it is mystifying. Even if you can understand — just barely — how it works, you still wonder what the point is and why people who do it need to get paid so much. And you strongly suspect that the swirl of financial activity around Avis for the past six decades has had little or nothing to do with the business of renting cars.
Last September, a week after the Avis Budget Group began trading on the New York Stock Exchange, The Wall Street Journal reported that the new company was “ripe for the picking.” Carl Icahn, another wily financier from the 1980s, had acquired a $100 million stake in the company and would not comment about his intentions.
The Journal warned, “If a buyout or acquisition deal doesn’t materialize for Avis, stock and bond investors will have to focus on the fundamentals of its car-rental business.” Goodness! Anything but that!
Michael Kinsley is a columnist for Time magazine.
=====
Wednesday, October 14, 2009
Staying on top
An excellent leader in The Economist analyses the calibre of chief executives of banks in America.
Only three of the chief executives from the ten largest banks in America during the unfolding of the financial crisis remain. The rest have been asked to leave over the past year.
Some are claiming conspiracy, in that chief executives have manipulated for personal gain. This may appear true considering the lavish perquisites that they showered on themselves - expenses claim on a $87,000 rug, playing a game of bridge as their firms collapsed, almost like Nero. The article compares this to actions of Kenneth Lay of Enron and concludes that most of the current breed were useless.
It says "Far from expertly manipulating their firms' books, many could not even understand them" and "....even when they had decent numbers, executives struggled to manage their mutinuous staff". One ex-boss said "... his job was less of management, more crowd control".
Did acquisition make a difference? No. Acquisitive firms such as BoA, Fortis and RBS floundered. Those who were not acquisitive, such as JP Morgan Chase and Barclays prospered.
Did long-term perspective make a difference? No. Managers at Bear Stearns and Lehman Brothers did have a lot of their personal holdings, but did not focus on the long-term.
Did risk committees make a difference? Hardly. Santander had 98 meetings in 2007 while Credit Suisse's had just six, yet both did much the same.
So, what is generally prescribed by the know-it-alls as required and essential is not necessarily the right thing to do. Its better to be a historian than a politician; an economist rather than an executive. The former have the advantage of hindsight.
The summary "On any measure of banks' boards - experience, gender, age, independence - there were successes as well as failures". "What firms need is a culture of excellence, but that is like saying all football teams should be like Manchester United".
My line "It is remarkable that these executives stayed on the top without staying on top of their jobs."
Only three of the chief executives from the ten largest banks in America during the unfolding of the financial crisis remain. The rest have been asked to leave over the past year.
Some are claiming conspiracy, in that chief executives have manipulated for personal gain. This may appear true considering the lavish perquisites that they showered on themselves - expenses claim on a $87,000 rug, playing a game of bridge as their firms collapsed, almost like Nero. The article compares this to actions of Kenneth Lay of Enron and concludes that most of the current breed were useless.
It says "Far from expertly manipulating their firms' books, many could not even understand them" and "....even when they had decent numbers, executives struggled to manage their mutinuous staff". One ex-boss said "... his job was less of management, more crowd control".
Did acquisition make a difference? No. Acquisitive firms such as BoA, Fortis and RBS floundered. Those who were not acquisitive, such as JP Morgan Chase and Barclays prospered.
Did long-term perspective make a difference? No. Managers at Bear Stearns and Lehman Brothers did have a lot of their personal holdings, but did not focus on the long-term.
Did risk committees make a difference? Hardly. Santander had 98 meetings in 2007 while Credit Suisse's had just six, yet both did much the same.
So, what is generally prescribed by the know-it-alls as required and essential is not necessarily the right thing to do. Its better to be a historian than a politician; an economist rather than an executive. The former have the advantage of hindsight.
The summary "On any measure of banks' boards - experience, gender, age, independence - there were successes as well as failures". "What firms need is a culture of excellence, but that is like saying all football teams should be like Manchester United".
My line "It is remarkable that these executives stayed on the top without staying on top of their jobs."
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