patrick.net

Peter P

I want to say in advance that I'm not trying to be offensive - I only jest.

But every time you get on your free market "high horse" followed by nihilism, when challenged, I have an almost uncontrollable urge to quote Inigo Montoya:

"You keep using that word. I do not think it means what you think it means"

Peter P,

I don't comment frequently (but read every thread). I value your contributions and don't want to seem like I'm piling on but I need ask (and sincerely ask) do you really believe the comments you make? Do you really believe that:

Pay packages are determined by the market.

or

They (Shareholders) can fire the board who approves the pay.

Tell me the truth, Peter P, you don't really believe these, do you? You're really just a fun loving Randian/Libertarian who enjoys throwing out baiting comments for grins, right?

Right?

Well... I will leave you guessing. ;)

Maybe the 2nd Amendment exists for the purpose of culling the income outliers.

Hey to heck with sushi. Local corn (from greenhouses here) is on the market. Fresh corn and BBQ pork tonight! :)

Fresh corn and BBQ pork tonight!

What marinade?

To capitalize on the rising Chinese renmimbi, try
www.everbank.com They carry the renmimbi (yuan) as a currency play. The transaction is expensive .75% to buy and another .75% to sell but it may be worth it if one holds it for a while. The bank is FDIC insured.

Honestly I would not touch Everbank's Yuan deposit.

Yuan is NOT a freely convertible currency. I wonder how Everbank achieves that, legally that is. All exchange in and out of country is strictly controlled by the Foreign Exchange Bureau, which doesn't allow individuals to exchange more than ~$2500 worth a day pp for investment purposes.

Also, the upside of Yuan is very much capped. I predict the most it will go is around 6.5, there is already massive factory bankruptcy in southern China (so far more than 5000 factories went under, median size employing several hundred workers each).

So buying Yuan may make you a patriotic American because you are pushing up Yuan and driving down USD so as to slow down outsourcing, but that may not make you a happy investor in a year or two.

Peter,

Tonight I'm just experimenting by brushing on Otafuku Yakisoba sauce. Regular grocery store BBQ sauces have too much sugar in them and all they do is burn. I'm offset flame slow-BBQ cooking so-called country-style ribs (sliced pork shoulder).

Yakisoba is a good sauce. For corn, just a touch of light soy sauce is good too. :)

I wonder how Everbank achieves that, legally that is.

I don't know. Perhaps they are using cash-settled futures contracts?

http://chicagomercantileexchange.org/files/renminbi_factcard.pdf
http://quotes.ino.com/chart/?s=CME_RMB.K08.E

Good corn needs nothing. Europeans claim the American's habit of eating corn-on-the-cob as proof that we are barbarians who eat animal feed. Obviously they are confused.

The key is, if Yuan tanks, it is very hard to redeem.

If I expect a worldwide recession / depression, I won't want to put my money in a politically unstable, resource-stricken (per capita) country.

Europeans claim the American’s habit of eating corn-on-the-cob as proof that we are barbarians who eat animal feed.

Only barbarians eat raw meat (fish). :)

The Japanese are Americans???? :confused:

OO, brokerages are failing left and right in Australia. How about Channel Islands and Isle of Man?

At least Australian government is letting the weaker hands fail, isn't that the free market you want :-)

I wouldn't call it failing left and right because the two that failed are not part of the big consortiums like Macquarie, which the Aussie government banks with. I have no sympathy for those who parked their money with the small guys, that is the risk they should be prepared to take.

At least Australian government is letting the weaker hands fail, isn’t that the free market you want

True. ;)

Speaking of cheap US oil reserves.....

www.usgs.gov/newsroom/article.asp?ID=1911

The US may be the Saudi Arabia of both food and oil.

DennisN

are you able to put that number of billions of barrels of oil in context? Do you know how much Saudi Arabia has for example? I read that part where it says the estimate is now 25 times what it was in 1995, and was reminded of one of the main arguments against "peak oil".

OO,

Four or five amens (and maybe an Ave Maria thrown in) for the "free market". I think I'm going to start quoting that pesky expression ALWAYS.

>>Europeans claim the American’s habit of eating corn-on-the-cob as proof that we are barbarians who eat animal feed.

I think this is quite far from being a general european sentiment. Not that it was meant in seriousness??

I have respect for all cuisines. I am even nice to vegetarians. ;)

are you able to put that number of billions of barrels of oil in context?
Mean estimate for technically recoverable oil is 3.65 billion barrels in the Bakken Formation. The United States uses around 20 million barrels per day, so this is around half a years supply. Hurray, we're saved! Peak oil has been put off by half a year in the US; my kids are jumping for joy -- well, I will admit, every little bit does help.

OO says: I only know one thing: I, and people in my financial position are not the biggest beneficiary of the current “free market” or whatever market you want to call it. So I want a change.

I think the present system is a pretty good one. I'm not baiting an argument, either. My grandparents were factory workers. In the space of two generations since then, we've become entirely white collar through education and hard work, pushing well past the median American income.

Who gives a shit what CEOs make? Really. It's a superficially interesting but ultimately irrelevant factoid like the distance to the moon measured in stacked pennies. My family's standard of living has increased tremendously in the last many years, and disproportionately to the opportunities in other countries via means that are widely available to everyone in America. Thanks to the opportunities provided by our culture, our welfare has increased tremendously even compared to our prior peers. In fact, the welfare of my family is influenced by CEO pay about the same as it's influenced by the price of wheat on Mars.

You can get as inflamed as you like about CEO pay, but it's a fact of doing business in a world of multibillion dollar companies. As obscene as their compensation might seem, it is a drop in the bucket of our vast economy. We non-CEOs should be concerned about fundamental issues like broad health insurance and high quality education. Dashing up to peer through the gilded gates is an exercise in pure jealous futility.

Be happy with what you have in an absolute sense. If you make it relative to the top 1%, then nobody is ever going to be happy (and maybe that's already happening in our New Gilded Age culture).

Brand,

If CEO compensation is just a drop in the bucket (and I do not think it is), then please arrange for a few drops being sent my way. I would not mind at all.

I'm squarely in agreement with OO on this one.

If CEO compensation is just a drop in the bucket (and I do not think it is), then please arrange for a few drops being sent my way. I would not mind at all.

Yeah, that few drops will be shared by thousands of minions like you. Enjoy! :)

If you think CEOs are too highly paid, perhaps you should try to become one. If you can't, perhaps they are not too highly paid after all.

Peter P,

Proves my point exactly. It is *not* just a "drop in the bucket" if everyone gets a fair share.

If I were you, I would be more worried about my peers getting more than myself.

I much rather have an advantage over my resource competitors. I don't care what happens "up there in the food chain."

The failure of your competitors is as good as your own success.

It is *not* just a “drop in the bucket” if everyone gets a fair share.

No, it is not "drop in the bucket" because everyone gets a tiny fraction of a drop in order for it to be "fair."

justme, perhaps you could clarify. To me, it seems that if a CEO over 1000 people gets a $1M bonus, then if that were divided among his people that would be $1000/person. Hardly an impressive number.

From a corporation's perspective, a CEO's compensation is a very small amount of revenue and profit (or should be, otherwise the Board should be summarily voted out). The primary value of a CEO is as a figurehead and example. From the hundreds or thousands of managers in a company, only a tiny few will become CEOs. But the mere existence of that pile of gold at the end of the rainbow inspires tremendous hard work from the middle echelons. Hence I would argue that the corporation's ROI is actually quite strong by providing a generous pay package to their CEO.

I am far more offended by CEOs taking home any bonus in a year where their investors got hammered or their workforce was heavily slashed. A corporation exists as a money-making enterprise (from the capitalist perspective) and as an employer (from the social perspective). If it fails in either or both of those responsibilities, then its leaders deserve no gestures of gratitude from the people generating the revenue or footing the bill.

Brand,

>>But the mere existence of that pile of gold at the end of the rainbow inspires tremendous hard work from the middle echelons.

It does not inspire as much "hard work" as it inspires tremendous amounts of unproductive jockey-ing with the goal of giving the appearance that one is the most qualified for the next step up the ladder.

I would argue that high CEO pay just as often (if not always) is more unproductive because it values appearance over substantial contribution. All the "competition" among the middle management and lower echelons comes at a tremendous cost to the company.

Tell me the logic of why these CEOs are entitled to $50M, 200M golden parachute when they were FIRED? Has anyone heard of any average Joe employee getting a fat paycheck for being fired for screwing up?

How about those CEOs who are paid $100M+ even if the stock price was trashed? Why is everyone in the company tied to performance except for these "star" CEOs? For example, Fiorina, shouldn't she be sued for the enterprise value that she destroyed? Why did she get to parachute out with $40M after such a grand f*ck up?

Doctors are sued for malpractice. Where is CEO's responsibility when they screw up? I am all for paying CEO a billion if we stockholders can sue their ass and confiscate all their personal and family wealth if they were proven to have screwed up during their tenure any time in the lifetime of the company.

High pay comes with stringent obligations. CEOs have high pay, where is the obligation part going?

EBGuy
thanks for the data re:oil

The pile of gold at the end of the rainbow should be rewarded to entrepreneurs who built and sticked with their company like Bill Gates or Steve Jobs.

How about this. For anyone who is taking a CEO job, he is required to buy his company stock with all the money he has (and there is a minimum threshold). And he cannot cash out until 5 years AFTER he left the company.

Then you can pay a CEO as high as you wish, let the free market decide.

Brand,

Fortune had an issue last year covering companies with CEO pay accounting for over 1% of the company's revenue. Not profit, revenue. Half of these companies were actually making a loss or barely making a profit.

If a CEO is making money while their shareholders are losing money, then the board of directors has not aligned rewards with the desired behaviors. Since dangling the appropriate carrots is a key function of a board of directors, those directors ought to be sacked immediately.

However, not everyone on this forum has expressed outrage from a shareholder perspective. Many are complaining from an employee perspective. And from that point of view, I maintain that we should be more concerned with our own absolute satisfaction in life. To make our personal happiness relative to others' possessions is a sure path to emotional ruin. That is especially true with regards to such extreme examples as CEOs.

CEO pay in and itself is not the issue. It not being tied to performance is the real problem.

Honestly, even I can be a CEO of a company, ruin it and get fired. What's so special about that to deserve a multi million dollar payout while getting kicked out ?

The average Joe shareholder in this matter is as powerful as a voter in China. Hence I wonder if the only way to make any money is by trading and not by investing.

Hence I wonder if the only way to make any money is by trading and not by investing.

Trading is probably not the only way... but I think it is definitely one of the ways.

For most people, it is probably easier to lose money trading than investing. Remember, in trading, <10% of the people are making 90+% of the money.

The US is not the "Saudi Arabia" of food, our domestic food industry will not resemble anything like today in 20 years. Our breadbasket will be a desert with water shortage's and a 1.5 degree temp increase.

And technology changes the game, like growing meat in vats just about anywhere, aquaculture, and all manner of other "dirty" tech.

http://www.wired.com/science/discoveries/news/2008/04/invitro_meat

Brand

Passing judgment on our "system" must be measured in metrics other than your families standard of living or past upward mobility.

One important point, past performance does not equal future performance. Very relative as we head full throttle into a new dark age. No, I'm not kidding. Dark age coming.

And the expense of your "standard" of living and education has been supported on the brutal torture, rape, pillaging, and other maltreatment of populations all over the third world. So maybe you might be happy in your current "state", but you have blood on your hands. Ignorance of the relationships that make this occur does not make it any less real or true.

Or maybe measuring metric of environmental health? Rape and poisoning there. Failing grade by all measures and on every count.

Healthcare? Dismal failure.

Quality of life? Dismal failure.

Food quality? Our food is full of all manner of vile pus chemicals antibiotic and other things deadly poisonous to life.

Culture? I'll reserve judgment.

Upward mobility? Times are a changin.

Racism, discrimination, equal opportunity? Our prisons are full of minorities due to socio economic status and lack of opportunity.

Technological advancement? Sure, at an accelerating pace that is breathtaking. However, this train has no conductor and is potentially heading towards endpoints that none should desire.

A gilded age has just ended, what comes next might not be recognizable.