At ABC No More High Class Trips, But $1,500 Suits Are Within Budget.

10/25/2008 09:54:00 PM

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Image converted using ifftoanyAccording to a memo at ABC News, there will be no more media subscriptions, no more conventions, no more "A" class hotels, and no Christmas party however, there are only "guidelines" for wardrobe expenses.  So if you are an employee of ABC News and have to stay in a Motel 6, just think, your sacrifice is so that Teri Hatcher  or Marcia Cross can wear Ralph Lauren, Neiman Marcus and Armani.

 The Observer reports that ABC, a part of Media Networks Group, says no to partying this year!  David Westin, president of ABC News, sent out an e-mail to staffers warning that ABC News is not "immune from the downturn," and that the division, along with the rest of Disney's Media Network Group, will be implementing new "guidelines" to "reduce administrative costs."

As part of the cost-cutting measures, ABC News will be canceling all of its magazine and newspaper subscriptions, will not be throwing any holiday parties, and will be scaling back on travel accommodations for executives.

The Media Networks Group includes ESPN, Disney-ABC Television Group, Disney Channel, ABC TV, ABC Family, ABC Studios, Disney ABC Domestic TV, and Radio Disney.

Here's the e-mail:

"We report every day on the economic climate and the effects being felt throughout the country.  We are not immune from the downturn.  At the same time, the importance of the election and economic stories reminds us how much we have to do to help our audience absorb and understand what is going on around them.  What we need to do - and will do - is to make sure that we have all the resources we need to cover the news.

To that end, we (together with the rest of the Media Networks Group) are adopting the following, new guidelines to reduce some of our administrative costs.

  1. All executives are asked to fly one grade below what they're entitled to.  Some have contractual provisions on air travel, and the company is not breaching any contracts.  But we are being asked to use our discretion on this.
  2. [Missing]
  3. All executives are asked to stay in "B" level hotels.  I'm told that Travel knows what this means.
  4. Starting immediately, the only business meals for which we will be reimbursed are those with third parties.  Any meals (or drinks) with ABC or Disney employees will not be reimbursed.
  5. All non-production (i.e. administrative) travel must be pre-approved by the CFO (in our case, Jim Hedges) in writing.  Your finance and operations people can help you with this.
  6. As of December 1, we will cancel all subscriptions (newspaper and magazine) for executives and production employees and more them to on-line.  This change will have the added benefit of helping the environment.  If there are particular circumstances where you believe this will materially impair your ability to get your work done, you should make your case to yore executive producer or supervisor by November 15th.  Dave Davis, Kate O'Brian, and Paul Slavin will review these requests and submit recommendations to me.
  7. We're asked to keep any convention or conference attendance to an absolute minimum.  Anyone who attends things like NAB or RTNDA, we need to have a conversation.  If someone needs to attend, it will be a skeleton crew.
  8. We'll forego all holiday parties this year.  This means that the company parties in LA, NY and DC are canceled.

Thanks again for your understanding and cooperation.  I won't pretend that this won't be difficult.  But, I truly believe that there is a way for us to do this together that will result in a stronger ABC News.

Additionally, in an internal memo titled "new wardrobe guidelines" according to MSNBC [Define irony.  NBC reporting on ABC.], budget cuts are taking place at some of ABC's biggest primetime shows.  That memo outlines the "maximum allowable spend" for categories of clothing for each character.

No more than $150 may be spent on men's or women's accessories; no more than $250 on a pair of women's shoes (only $200 for men's shoes).  Handbags should cap out at $300 and men's suits at $1,500.  Note however, there is no "guideline" for women's wardrobe.

A representative for ABC, Charissa Gilmore, says that the memo is nothing more than a guide.  "Probably everyone is looking at costs," says Gilmore, "and there are guidelines for every single department."  Gilmore also states that the cost allotted are just suggestions.  "All of our people can go over.  If someone argues that we need red-soled (Christian Louboutin) shoes to show that Lucy Liu is the power attorney (on 'Dirty Sexy Money'), then she's going to get them.  It's about making smart decisions.


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Bank of America Loses Money On Credit Cards, Gives Golden Parachutes To Leaving Executives.

10/22/2008 08:47:00 AM

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bish Seems Bank of America has more financial problems as they lost money for the first time since January 2006 purchase of MBNA Corp. as more borrowers missed payments. 

BoA's card services unit, which includes unsecured consumer loans as well as business and consumer credit cards, lost $373 million in the third quarter, compared with a profit of $1.04 billion in the third quarter 2007.   Defaults on cards, consumer loans and home mortgages contributed to a 47 percent decline in operating profit at the consumer and small-business division.

BoA provided more details on its third-quarter results today, two weeks after reporting a 68 percent decline in profit.  Those earning, released early as the bank announced plans to raise $10 billion by selling common shares, were worse than analysts expected. 

Joe Price, chief financial officer of BoA, said at the time that losses on consumer credit cards represented almost 60 percent of total consumer losses.  Price added that late payments on cards were growing fasts in those states most affected by the housing slump.  While California and Florida make up a little less than a quarter of the bank's domestic consumer credit card portfolio, he said the two states represent about a third of the bank's card losses.

"Credit cards have typically been among the most profitable parts of Bank of America's business," said Jim Campen, executive director of Americans for Fairness in Lending, a Boston-based nonprofit that studies the credit card industry.  "As we enter the biggest financial crisis since the Great Depression, more people aren't going to be able to pay their credit cards."


Maybe that little deal of offering credit cards to people without social security numbers (and who in the United States doesn't have a social security number)  and who didn't have any credit history but who did maintain an overdraft-free checking account for three months, is finally coming back to haunt them.  Bank of America, along with Wachovia, launched aggressive campaigns to woo illegal alien homebuyers.  And where is BoA and Wachovia today?

In 2006 BoA began offering credit cards without requirements of Social Security numbers in five Los Angeles branches.  By 2007, it was expanded to 51 Los Angeles branches.

BoA had defended the program, saying it complied with U.S. banking and antiterrorism laws.  "These people are coming here for quality of life, and they deserve somebody to give them a chance to achieve that quality of life," said Brian Tuite, bank's director of Latin America card operations and one of the architects of the program.  BoA said nearly half of the nation's Hispanic households have one of its credit cards.

It is interesting to note that BoA's domestic consumer credit card portfolio, stating that California and Florida represent about a third of the bank's card losses alone, that those two states also happen to be some of the nation's largest sanctuary areas for illegal immigrants.  Regional reports across the country have decried the subprimes meltdown's impact on illegal immigrant "victims."  A July report showed that in seven of 10 metro areas with the highest foreclosure rates, Hispanics represented at least one-third of the population; in two of those areas -- Merced and Salinas - Monterey, Calif -- Hispanics comprised half the population.

Even as recently as September 28, in Atlanta Georgia while the Mexican Consulate was issuing ID's to undocumented Georgians at the Old South Pawn Shop, representatives from Bank of America were on site distributing information on how to open a checking account.  All that was needed was an original copy of their Mexican birth certificate, two forms of picture identification (with one being current), and an item such as a power bill, to prove one's residence in Georgia.  A social security number was not required.

The Wall Street Journal had reported on one customer who had sneaked into the U.S. a decade ago, had been a customer of BoA for nine years, and had no credit history or Social Security number.  He paid a $99 fee to obtain a $500-limit Visa card, and provided he stayed within his $500 credit limit and paid his balances on time, he would receive his $99 security payment back in three to six months, with a possible credit limit.


Although BoA is having serious losses due to the card services division, they are still giving out big salaries to execs.  Reuters reported that MLs head of strategy will likely leave the bank with as much as $25 million in compensation. 

The Wall Street Journal reported that Merrill's global strategy head, former Goldman Sachs executive Peter Kraus, who will be leaving, will be picking up a paycheck worth $10 million to $25 million.  Kraus will receive the exit payment because the takeover of BoA altered the terms of his contract and he is not affected by a provision in the government's bank rescue plan that curbs executive compensation.

Yet there have been reported that up to 10,000 jobs of the 60,900 employees at Merrill Lynch are at risk due to elimination by Bank of America after completion of the $50 billion acquisition.  Merrill Chief Executive John Thain had said that he expects "thousands" of job losses from the takeover by BoA with most of the cuts falling in IT (Information Technology), operations and "corporate functions," Thain said in a Bloomberg Television interview Monday of this week.

According to CNBCk, ML laid off 500 people in its trading division today.  The total layoffs at Merril since the crisis began last year, now stands at around 5,000, with about half of those in New York.

"Bank of America's 'slash and burn' style following acquisitions is likely to be pronounced at Merrill," Dick  Bove wrote, an analyst with Bloomberg.  "That company still has approximately $30 billion in securities that could be written down.  It overlaps with Bank of America in multiple divisions."

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Why Does Obama Want You To Vote NOW And Not Wait Until Election Day?

10/21/2008 08:18:00 PM

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stopthemadnessTonight surfing "the internetz" using "the google" on topics unrelated to politics, finance or the stock market, there were Obama ads EVERYWHERE.  In a five minute time span, I ran across all the ads to the left.  I am so sick and tired of seeing ads telling you to vote with Obama's picture on them.  It does not matter where I go, they are EVERYWHERE.  Seriously, enough is enough.  I mean it's not enough to surf the net and see ads nearly on every page, its not enough Obama bought a 30 minute block of TV right before a World Series game, and now he's secured a 30 minute block of time at 8pm on CBS and NBC six days before the election? 

On October 6th alone, Obama spent $3.3 million in a single day of TV advertising according to an AP article.  At that rate, he will spend more than $90 million on ads through Election Day - more than all the money McCain has spent on his entire fall campaign!

"This is uncharted territory,"  Kenneth Goldstein, the director of the Advertising Project at the University of Wisconsin, told the newspaper.  "We've certainly seen heavy advertising battles before.  But we've never seen in a presidential race one side having such a lopsided advantage."

In a New York Times article dated Oct 17, it was report that Obama has advertisements running repeatedly day and night, on local stations and on the major broadcast networks, on niche cable networks and even on video games and his own dedicated satellite channels.  The article also stated that Obama bought heavily on football games and other nationally televised programs that, according to CMAG, a service that monitors political advertising, Obama spent $6.5 million on a day when McCain spent less than $1 million.

According to a UPI article dated Oct 18, Obama is likely to surpass the all-time presidential campaign ad-spending record set in 2004 by President Bush which was $188 million.

bilde Courtesy ads are being circulated in nine video games from Electronic Arts, and according to NPR, another nine!  The ads are on billboards and other highly visible objects in mostly sports games like Madden NFL 09 and NBA Live 08, and according to Electronic Arts, targeted at males aged 18 to 34.  And how is this done?  The manufacturers slipstream the compressed image files via your internet connection, so when you connect your XboxLIVE, the ads download in the background (without, of course, user notification).  At some point as your cruising around the race track or slamming hockey players into plexiglass, there's Obama, with a message that early voting is underway.

1018-pg1-ADSIn one commercial, which was a minute-long, Obama is seen recounting "one of my earliest memories:  going with Grandfather to see some of the astronauts, being brought back after a splashdown, sitting on his shoulders and waving a little American flag."  Can anyone please tell me what this has to do with the election, what it has to do with Obama's economic plans, what it has to do with how this country is to be run, yadda, yadda, yadda.

Is it just me, or does this seem like a HUGE waste of money with Obama to be the most expensive president EVER!!  And what you don't realize, is this is a subliminal marketing tool.  No there are no "subliminal" messages in the ads however, the more you see his face, the more you think about him, and more familiar with him, and thus you vote for him.  It's one of the oldest marketing tricks in the book.  Are you going to fall for it too?  Obama is counting on it to work.

ENOUGH already.  STOP THE MADNESS.  Why do I need a reminder to vote?  Why do I need a reminder from Obama to vote? Why do I need to see Obama's picture EVERYWHERE I go whether it be out in public or at home?  If he's like this now during an election, can you imagine what he would be like if he were president?

And one final thought to ponder, why is it so important to Obama for you to vote early?  Why do you have to make a decision RIGHT NOW?  Feel like a car salesman is pressuring you?

mccainpow Oh and a message to Obama?  My Father can't send email just like McCain supposedly can't, yet my Father served in WWII in Hawaii.  If not being able to send email is a determining factor of leadership and that McCain is out of touch, then what does that make my own father, and everyone else that is over 70 years old?  According to your campaign manager David Pfouffle, you are going to fight McCain on big issues that matter to the American people.  McCain supposedly not being able to use a computer (which incidentally came from a report of when McCain's fingers were broken and he couldn't type on a keyboard, tie his shoes or comb his hair) is a "big issue".  Yea, there some big issues alright, but its not with McCain.  And tell me Obama, what have you done for this country, other than run your mouth.

And no, I have not decided who I am going to vote for, but I know one person I am NOT going to vote for.

I leave with this new ad against Obama.

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AIG Liddy Demands Apology from Cramer. [And my personal letter to Liddy.]

10/21/2008 08:41:00 AM

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cramer I have my own letter I'd like to send to Liddy over this incident...... more below.

Jim Cramer is a former hedge fund manager, and author.  Currently he is the host of CNBC's Mad Money, and co-founder of  He has also been a contributor to New York magazine and an occasional contributor to Time magazine.  The man has always been know to speak his mind and during a NBC "Today" show appearance in October 2008 he stated "Whatever money you may need for the next five years, please take it out of the stock market.  Right now.  This week."  Supposedly, this appearance was blamed for inciting panic-selling among regular American investors.

Last Wednesday, Cramer stated on a CNBC segment via The Street,  "We are so on the hook to AIG.  Stop Trading!"  He added "That will prove to be an unbelievable black hole that will last forever.  I don't know what was worse -- taking them over, or letting Lehman fall."  As for buying AIG shares, Cramer was confident.  "In no uncertain terms, that will never pay off," he said.  He said he was seeing opportunities in the market as we pull back, but "AIG is not one of them."

Well, Cramer urged CNBC viewers the next day, on Thursday, to "hound" AIG employees, "everywhere they are," including making fun of them and pointing fingers at them.  New CEO Edward Liddy was not amused, demanding an apology from Cramer, and even sent him a letter.

Edward M. Liddy
Chairman and Chief Executive Officer

October 20, 2008

Mr. Jim Cramer
Mad Money
[Address Redacted]

Dear Mr. Cramer,

I was deeply disappointed last Thursday when you urged your viewers to harass AIG employees, saying:

"We should hound them in the supermarket, we should hound them in the ball park, we should hound them everywhere they are.  We should make fun of them and we should point fingers at them and we should tell them that you have no shame."

These comments are outrageous.  I demand they be retracted and that you apologize to AIG's employees.  It is one thing to criticize the executive leadership of AIG - that's fair commentary.  But it is way out of bounds to incite people to confront and harass other AIG employees - hard working, dedicated people who are running good businesses and are committed to our success.  The employees of AIG did not cause this mess, but they are paying for it - in diminished 401K savings and in some job losses as we sell companies to repay the Federal loan.  The irony is that AIG employees did not cause this problem, but they will solve it.  For that they deserve our praise and our gratitude.

I await your prompt response.


Edward M. Liddy

Personally, what I would like to say to Liddy on this matter, is the following:

Dear Mr. Liddy,

I think Cramer's comments were inappropriate and he  should apologize for his unsympathetic statements towards your employees who have been through so much however, first have each employee and exec who attended the St. Regis "convention", each attendee from the Atlanta "convention", each attendee from the Europe hunting trip, and each employee from the Las Vegas golf outing send a written apology to the Oversight Committee for wasting the U.S. taxpayers money on parties first.  Talk about being uncaring, and unsympathetic!  I though Lehman Brothers was bad, but you Mr. Liddy and some of your employees, take the cake, eat the cake, and throw the empty plate to U.S. taxpayers expecting us to take out your trash.  Talk about no shame and talk about outrageous actions?  I don't think you are in any position to demand anything, since we the taxpayers OWN you, and YOU owe US for bailing your butts out.

As for YOUR employees 401(k)s and job losses which are unfortunate, what about all the non-AIG employees who lost money in their 401(k)s, and their job losses because of your company's failure affecting their employer or their lifetime savings?  What about all the stockholders who lost money because of AIG, yet certain people who work for AIG profited at the same time?   What about all the mortgage brokers who lied to potential homeowners, and now are paying the ultimate price?  And we, the U.S. taxpayers who are paying for your parties, should thank your employees for saving AIG?  Umm.. Hi!  My name is reality, and I KNOW we haven't met yet.  I know I'd like a thank you from every employee of AIG for saving their jobs since we the U.S. taxpayers are the only reason they still have a job.

As for paying back the Federal loan?  The only reason you want to pay it back so quickly is because you don't like being regulated by the Feds, with all your company's dirty little secrets being made public.

And as for stating that AIG employees did not cause this mess?  Are you going to be like Dick Fuld now, and blame everyone else for YOUR problems?  Get a therapist, your denial is showing.

Why are you worrying about one man's opinion?  Why are you even addressing this issue?  Obviously your experience as a CEO, or rather lack of, didn't tell you to ignore this issue, as it would have gone away.  Now you have done nothing but add fuel to the fire.  Your attention should be focused, and only focused on getting your company back profitable and paying the U.S. taxpayers back, not insults and opinions.  It's TV and ratings, you need to get some thicker skin, and consider the source.  By acknowledging his statement, you only give him more power over the situation and you just gave him more ratings.  I had never heard of Cramer before today, and now I plan to watch one show to see what the big deal is.  You fell for the biggest media trick in the book, and he will profit for it.

While I admire and respect you protecting your employees, you need to think about the bigger picture, outside of AIG, and the potential effects that AIG can and has had on our society through their actions, both positive and negative.  As the once infamous Schooner Tuna commercial stated "We're all in this together."   I'd like you to take the challenge of  taking off your blinders, coming down out of your office, and then walking the streets as a normal U.S. taxpayer and learn what it is really like for us. 

Your continued arrogance will be your downfall.


Misery Index 2008

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Bye, Bye Circuit City?

10/21/2008 07:39:00 AM

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circuit_city_logo Gee maybe those fees of $40 to install a USB keyboard are finally catching up with CC.  And maybe their less than desirable customer service (rude, uneducated, incompetent and simply just bad) has something to do with it......

Last week CC announced that they decided that consumers want to see the same prices in the stores as on-line with a "One Price Promise" promotion in a press release basically announcing they are price matching what is listed on the Internet vs what is listed in store.  Of course they have had a policy of price matching competitors however, when you take the ad to the store, you get responses such as "they aren't our competitor", "the ad doesn't list the item number exactly", "we don't have anymore of those", or "we don't price match anymore if it's below our cost."  And then there is the possible issue of submitting for rebates when price matching, and CC refusing the rebate since the price of the item falls below their cost.

And lets see how this goes, just like the 24 minute in-store pickup, which ends up being a disaster.  And "issues" of not honoring ads instore and guarantees.  Or just plain out selling you empty boxes.  For a few recent examples, check out The Consumerist here, here, herehere, and here.

Maybe if Circuit City would actually train their employees in customer service, and follow established corporate rules for customer service, returns and just business operations, then CC wouldn't be in the position they are.

"One Price Promise assures CC shoppers that they will be treated fairly and equally regardless of how they shop with us," said Jeff Maynard, vice president, marketing at Circuit City Stores, Inc. in a press release. 

"We plan to let consumers know about One Price Promise in a big way," added Maynard. "We are launching an aggressive national advertising campaign that includes print, broadcast, Internet and in-store marketing tools..."

Yesterday however, Circuit City according to the Wall Street Journal, is considering a plan to shut down at least 150 stores and cut thousands of jobs to avoid filing for bankruptcy protection.  By shutting the stores, CC hopes to liquidate about $350 million in inventory, which it could use to pay off certain real-estate costs and pressure existing landlords to renegotiate some leases many of which CC regards as overpriced.  Of CC's $3.98 billion in off-balance sheet obligations related to operating lease commitments, more than half is tied to leases with more than four years remaining and about 80 are for vacant locations.

In the meantime, CC's advisors are doing what they can to line up additional financing, but so far lenders have shown little or no interest at all.

Seems that CC has hired the same firm that oversaw Kmart's Chapter 11 reorganization, as its bankruptcy counsel.  If Circuit City would file, it would make it the largest retailer to enter bankruptcy protection in several years, said the WSJ.

CC has also hired FTI Consulting to help the company devise a turnaround plan.  FTI has advised on several troubled retailers, including Bombay Co and Winn-Dixie Stores.

They have also hired investment bank Rothschild Inc. to guide talks with banks in hopes of securing emergency financing.

"We're not going to speculate on rumors and comment beyond our original statement," said CC spokesman Jim Babb in a response to an emailed question by Market Watch.  The company's management team, board of directors, and its strategic financial advisers are conducting a "comprehensive review" of all aspects of its business to determine the best methods of accelerating its turnaround and delivering substantially improved operating and financial performance, the company said in a written statement.

"While we would appreciate [Circuit City] for its attempt to stay solvent, we remain highly pessimistic on holiday sales and on consumer spending in 2009," said S&P Michael Souers.

As of Aug 31, CC had 714 stores in the U.S> and 772 stores and dealer outlets in Canada, employing about 45,000 people.  Share of CC fell 2.6% to $0.38 a share yesterday afternoon, erasing earlier gains and wiping out 91% of their value this year.

Perhaps bargains will be found for Christmas via CC.  Remember, your TV needs to be digital soon!  And perhaps CC is "banking" on this to help them out of their hole however, I don't think it's going to happen.

And if they do a go out of sale, chances are Gordon Brothers Retail Partners, who were responsible for the liquidation of CompUSA, Sharper Image and Tweeter will almost certainly buy what's left or at least get hired to run the "Clearance".  Gordon Bros has a reputation of increasing prices, and then discounting and also shipping out all the good items before the clearance sales even begin, leaving nothing but high price junk to sell.

And I wouldn't even "think" of purchasing an "extended warranty" on anything bought there now, as if I would ever recommend purchasing an "extended warranty" from CC anyway.  Which brings up a question, if CC goes bankrupt, and if you purchased an extended warranty from CC, what happens then?

And we as consumers are left with only Best Buy to monopolize the market.

And recently Mad Magazine did a parody of a Circuit City advertisement, needless to say, a higher up demanded that all issues of Mad Magazine in store on the racks be destroyed.

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The Golden Era Of Financial Services Is Over Via 60 Minutes [Bank of America]

10/21/2008 06:22:00 AM

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60 minutes Bank of America CEO Ken Lewis on 60 Minutes in 12 minute video.


...The largest of the banks is Bank of America - now partly owned by the United States of America. 

The head of Bank of America, Ken Lewis, says that when he and the others met at the Treasury Department, it became clear that Secretary Paulson's "offer" was an ultimatum - no negotiations.

"So in other words, take it or take it?"

"Right.  Right, right."


"Do you have any choice in this?" Stahl asked.  "In other words, can you take the money and not lend?"

"We wouldn't want to do it that way, because you can make more money lending," Lewis said, "and so the intent will be to use it to grow loans and to make more net income."

But under the Treasury's plan, there's no requirement that a bank use the money to lend.  It could use it to acquire weaker competitors - or put it in Treasury bills.


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AIG Says Goodbye To More Wicked Ways.. [Until They Are Out Of The Spotlight]

10/20/2008 05:59:00 PM

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aighalo AIG says they are turning over a new leaf... yea right.  So riddle me this kiddies, if AIG is stating they are no longer lobbying, then why are they only downsizing their workforce in the lobbying offices, and not closing then?  And would you believe that former chief executive Greenberg is even petitioning the SEC for better terms on the federal loan?!?!?

Ya know, its kind of interesting how things are playing out.  AIG goes bankrupt, gets bailed out by the Feds, the parties continue, the AIG lobbying continues to lax regulation on mortgages, the media finds out parties are still going on, the NY AG sends a threatening letter to stop partying or face legal action, Waxman sends a letter to AIG saying he wants receipts of "conventions", two Reps send a letter to AIG to stop the lobbying, and voilà,  AIG suddenly says they are going to mend their wicked ways, not waste money anymore, and pay back the loan by year end...... hmm.. gee......  guess they don't like being regulated, "watched" and told what to do so they are going to step up the pace to pay back the loan.

Sorry, I have to go wash the "stupid" on my forehead that AIG just pasted there..................


If you remember, on Wednesday last week New York State Attorney Cuomo assailed AIG for making "unwarranted and outrageous  expenditures" that he said violated New York law and advised them to stop "extravagant" expenditures and recover millions of dollars in unreasonable payments, or face legal action.


On Thursday AIG announced that they would cooperate with the NY AG and announced that it would cancel all junkets or perks not justified by "legitimate business needs" and would be canceling more than 160 conferences and events that were to cost a total of $80 million, according to AIG spokesman Ashooh.  This of course comes after the media outlets learning of a $440K retreat to St. Regis in California only days after the $85 billion loan, a "insurance convention" for execs and their wives on October 3rd to Las Vegas that included golfing, a $86K plus hunting trip in England, among other events.  And during that time, also asked for an additional $37.8 billion loan.

It was reported in the Wall Street Journal on this day that AIG was still engaging in a state-by-state effort to soften new federal regulations requiring mortgage originators get licenses and provide extensive background information.  According to a Wall Street Journal article:

AIG is currently working to ease some provisions in a new federal law establishing strict oversight of mortgage originators, according to state regulators.  The law requires that originators be licensed by the states, and that they supply comprehensive information so state regulators can track their activities.

The goal of the new rules is to hold originators accountable if they engage in the sorts of improper or fraudulent lending that ultimately contributed to AIG's downfall.  The law was passed by Congress in July as part of a sweeping housing-industry rescue package.

On Sept. 16, the day of the federal takeover of AIG, company lobbyist Brett J. Ashton was meeting with Indiana banking regulators about the law, said Judith Ripley, director of the Indiana Department of Financial Institutions.  Two weeks later, Mr. Ashton spent three days at a Hilton hotel in Beverly Hills, Calif., where he briefed other financial-service industry representatives on "key legislation and regulatory concerns."

Mr. Ashton referred questions about his activities to an AIG spokesman.  "We are maintaining government-affairs activities," said Nick Ashooh, an AIG spokesman.  "We're not the only financial-services company that has expressed concerns" about the new mortgage-lending oversight rules.  "We're rebuilding value in AIG to pay back the Federal Reserve loan and to restore AIG as a vital, ongoing concern."

AIG had said that it would continue to lobby, which it argued was important for protecting the interest of taxpayers and shareholders of the 20% of the company not in government hands.  In an October 10th article, AIG spokesman, Joseph Norton stated "We are not a GSE [government-sponsored entity] and are therefore not restricted.  We remain a share-holder owned entity and continue advocacy activities."

In 2007, AIG spent $11 million on lobbying.  In the first quarter 2008, AIG spent $3.7 million on lobbying.  The company spent more than $3 million on federal-government lobbying in the second quarter 2008 alone, and more at the state level.  During that same second quarter, AIG spent at least double on federal lobbying by outside firms than most other financial-service conglomerates, including Merrill Lynch, Citigroup, Coldman Sachs Group Inc and Lehman Brothers Holdings, according to congressional filings.

"They're trying to reintroduce things that really are superfluous and get in the way of implementing the act," said Thomas Gronstal, Iowa's superintendent of banking.  "Basically, they're just objecting to having to be regulated.  ... I frankly think that takes a lot of gall, given what the industry has done and what we're trying to do."

Kenneth Gross, an attorney at Skadden, Arps, Slate, Meagher & Flom in Washington who advises lobbyists and their clients stated:

"I would think it would be difficult to justify a sustained lobby budget of that magnitude in bailout mode."  The $3 million AIG spent on outside federal lobbyists in the second quarter "is a lot for an entity under any circumstance," Gross said.  "The industry norm is about half that."

FRIDAY, Oct. 17

Then on Friday of last week, Waxman of the Oversight Committee asked AIG for a detailed listing of all conferences, events, or retreats paid for AIG since January 1, 2008, as well as any future events during the next six months, as well as, any bonuses paid to AIG executives.  And on that same day stated they may have to additional ask for another $10 billion through the commercial paper program.  As of that day, AIG had already used two-thirds of its $122.8 billion credit line in only 30 days.

Also on Friday, Senator Feinstein (D-CA) and Senator Martinez (R-FL) wrote to AIG Chief Exec Liddy (PDF), telling him not to use its governmental loan to try and roll back tougher mortgage-industry licensing requirements and other controls.

"We are troubled that AIG is fighting against more robust oversight and regulation, given the company's role in the credit crisis and financial market instability."

"We find it unconscionable that AIG would take advantage of these taxpayer loans while paying lobbyists to rollback taxpayer protections against misrepresentations, deception, and fraud in mortgage lending."

"I will introduce legislation to prohibit the use of federal rescue funds or government loans for lobbying purposes," Feinstein said in a statement.  "Federal dollars were not intended to be used for lobbying, and it would be an unconscionable say for these companies to misuse taxpayer dollars in this way."


MONDAY, Oct. 20

So today, Monday, according to a Wall Street Journal article, AIG has said it will stop lobbying lawmakers and regulators, after coming under congressional pressure and questioning about how it is using more than $120 billion loaned by the government to keep the company afloat.  Ashooh said that for now, AIG was not closing any of its lobbying offices, but that workforce reductions would be part of the company's restructuring. 

"We're not suspending lobbying as a cost-saving measure but as a part of an overall review of what activities we should be involved in," Ashooh said.

And Ashooh also stated, "We haven't said we're never going to lobby again."

As part of its internal review, Ashooh said on Monday, Liddy has told employees that any personal expenses incurred during the California spa weekend must be reimbursed.

And suddenly AIG thinks they are going to have money.  Liddy said today on CNN Money that the company should start selling off pieces of its sprawling global business by year end, with some 15 to 20 buyers each walking away with a unit of AIG.  Liddy declined to comment on the prices, saying its "too soon" however, he told CNN Money that he expects to be able to repay the $85 billion loan.

Liddy also said that the company does not expect to need additional financing beyond the $85 billion to continue operating, and that AIG has already drawn down $69 billion of that loan.

He also stated "I apologize to the American people for those things [the extravagant spending on conventions & retreats].  They were terribly insensitive."

And if you wish to see Liddy talking about the asset sales, paying taxpayers back in full and the fallout from the recent company retreat, check out CNN Money's Video.


Purdential shares jumped by 22% today on speculation that the insurer is working on deal to buy part of AIG from $9.97 to $12.19.  The UK insurer Prudential could sell a 20 percent stake worth up to $2.1 billion in itself, according to The Sunday Times of London, in order to fund a $15 billion bid for the Asian business of AIG.

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NBC Revokes SNL Skit, Then Republishes It... Edited. [LAME and BUSTED]

10/20/2008 09:08:00 AM

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hulu-nbc I'm a little late on this one however.. better late than never.

A Saturday Night Live skit lampooning the mortgage bailout that I believe aired on October4th was yanked from the Internet by NBC shortly after being aired, and then republished in an "edited" form.

The skit correctly pointed out that the Democrats blocked oversight of Fannie Mae and Freddie Mac when President Bush and the Republicans warned them there was a problem coming.  And the skit also mocked Herbert and Marion Sandler and George Soros (Soros "Official" Blog), three of the super rich Democrats the bailout is going to help, among others.

NBC was removing the unedited clip no matter where found on the Internet, from Hulu (which was an official release by NBC), YouTube, and personal websites and blogs, and also removed comments associated with the clip the next day. 

It seems now that NBC has re-hosted the video on their website however, there seems to be a "change" in the newly released version by NBC.

nbc001In the original video, there is the Sandler couple who, in real life, actually profited off the subprime crash by turning their investment from $17 million into $24 million by running a company which marketed subprime mortgages, and then bundled them into securities to sell to banks such as Wachovia, which of course went bust.  During this skit, while the "Sandlers" were speaking, the statement of "People who should be shot" was shown below as a footer.   In a transcript of the original unedited video, Herbert Sandler states "And thank you, Congressman Frank, as well as many Republicans for helping block Congressional oversight of our corrupt activities."

PELOSI:  This is Herbert and Marion Sandler.  Tell us your story.

HERBERT:  My wife and I had a company which aggressively marketed subprime mortgages, and then bundled them into securities to sell to banks such as Wachovia.  Today, our portfolio is worth almost nothing - though at one point, it was worth close to $19 billion.

PELOSI:  My God.  I am so sorry.  Were you able to sell it for anything?

HERBERT:  Yes, for $24 billion.

PELOSI:  I see.  So in that sense, you're not so to speak, actual victims.

HERBERT:  (chuckling):  Oh no.  That would be Wachovia Bank.

MARION:  Actually, we've done quite well.  We're very happy.

HERBERT:  We were sort of wondering why you asked us to come today.

MARION:  Anyway, it's delightful to see you, Nancy. (Kisses Pelosi.)

HERBERT:  And thank you, Congressman Frank, as well as many Republicans for helping block Congressional oversight of our corrupt activities.

FRANK:  Not at all.  [...]

09sandlers-500 The real life Sandlers, who use their wealth to finance a variety of nonprofit organizations such as the Human Rights Watch, the American Civil Liberties Union (ACLU) and ACORN,  are infuriated over the skit

Sandler, 77, spoke to the Associated Press in the San Francisco office of his family's charitable foundation the morning after NBC's "Saturday Night Live" broadcast a skit deriding the Sandlers as predatory lenders who had duped unsophisticated borrowers and Wachovia, too.  A caption shown during the sketch skewered the Sandlers as "people who should be shot."

Although the timing of the interview was coincidental, Sandler was seething after watching a replay of the skit on the Internet.

"I have been listening to this crap for two year," Sandler said.  "We are being unfairly tarred.  People have been telling us to speak out for some time, but we didn't think it was appropriate.  That was clearly a mistake."

nbc001 The video was re- released by NBC with the statement above in red being removed from the newly posted NBC video.  Additionally during the skit,  the statement of "People who should be shot" that was shown below as a footer, was also removed.

On October 5th, a Los Angeles Times article addresses the issue of the removal of the video and a response from NBC.

The skit, a parody of a C-SPAN news conference, ridiculed subprime borrowers, housing speculator and Herb and Marion Sandler, the real-life couple who built Golden West Financial into a subprime lending powerhouse and sold it to Wachovia before the subprime collapse.  At one point in the skit, the Herb Sandler character says he made $24 billion off the subprime boom.  Graphics then appear labeling the Sandlers as "People who should be shot."

"Upon review, we caught certain elements in the sketch that didn't meet our standards," a spokesman for the program said in an e-mail message today.  "We took it down and made some minor changes, and it will be back online soon."

Ed Lasky recently reported on how the Sandlers - allies of left-wing billionaire George Soros - helped bring down Wachovia Bank:

Herbert and Marion Sandler, a New York lawyer and Wall Street analyst respectively, bought a small California thrift in 1963 and built it into GDW - one of the largest thrifts in the nation.  The company's business was built on adjustable rate mortgages (ARMs).  These were mortgages offered at low "teaser" rates that ratcheted upward as interest rates increased.  They were often sold aggressively to unsophisticated home buyers who did not comprehend the vast financial risks they were taking, or who assumed that housing prices would rise high enough to provide a profit to them when they sold their houses.  They were targets for lenders peddling mortgages that should have been stamped with a skull and crossbones, for these were among the most seductive and dangerous types of mortgage.

This book of business is the core reason for Wachovia's current difficulties.

The Sandlers knew their business far better than any other person could.  Not only were they the founders and major owners, they famously ran the company as a husband and wife team for all these years.

So why did they happen to cash out at precisely the right time?  Did they see the handwriting on the wall, realizing the massive risks inherent in the mortgages they originate throughout one of the most overheated real estate markets in the nation's history?  They are not talking, but when smart people cash in some of their chips, it's rarely a good time to bet against them.  Nevertheless, Wachovia bet 24 billion dollars and lost big time.

The collapse was primarily caused by the GDW purchase, which became an albatross around Wachovia's neck soon after the purchase.  "Wachovia found itself in ARM's Way" was the headline  of a recent Wall Street Journal article.  A huge percentage of these Wachovia ARMs were made to deep subprime borrowers with very poor credit scores.  Most of these were "inherited from its ill-timed acquisition of Golden West" at the end of the housing boom in 2006.

The Sandlers have started to invest their billions of dollars politically, in the manner of George Soros, sugar daddy of many far-left wing groups and an early and prominent supporter of Presidential candidate Barack Obama.  Soros has developed an empire of so-called 527 groups, putatively independent political activists groups that have influence within the Democratic Party.  These 527 groups include the Center for American Progress,, Human Rights Watch, Media Matters and a slew of other like-minded groups...

Soros, Lewis and the Sandlers form a core group of billionaire activists and Democrat partisans who have formed a group called The Democracy Alliance.  They realize that they could magnify their power by working in unison and tapping other wealthy donors to further their agenda

(the superb Boston Globe article “Follow the money” is a good primer on how money and 527 groups have come together to have a huge impact on politics in America).

The Democracy Alliance is a major avenue to help them achieve their goals. The roster of its growing membership consists of a list of billionaires and mere multi-millionaires who collectively hope to give upwards of 500 million dollars each year to further promote a left-wing agenda. A partial roster of the Democracy Alliance membership can be found here.

Half a billion dollars a year can purchase a great deal of influence.

The Sandlers certainly know quite a bit about leverage from their savings and loan days.

Among the beneficiaries of their largesse: Air America, ACORN (a group that has very close and long lasting ties to Barack Obama and has a long history of engaging in voter fraud. Citizens for Responsibility and Ethics in Washington (basically a private detective group focused on the private faults and foibles of Republicans), Media Matters, a media watchdog group that engages in harsh partisan attacks against media figures and articles it considers supportive of Republicans). The list goes on and on.

They are not merely out to elect Democrats, but to also permanently realign U.S. politics and shift our society and culture in a far-left wing direction…

The website, has followed the updates on this video, and hosts the original unedited video on their website and the edited version or just the portion of the video that was eventually edited, in unedited format.

Michelle Malkin has a transcript of the original skit on her website.

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NBC Cutting Budget, and NBC-Telemundo Cuts Staff [But Continues Porn Soap Operas]

10/20/2008 07:18:00 AM

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nbc_telemundo "We are living in a time of unprecedented economic challenges, and it is increasingly clear that the worldwide economic slowdown will continue into next year," Zucker wrote. "The leadership team of the company agrees that we must take steps now to prepare for these new economic realities.  As a result, all our business leaders are being asked to cut their spending projections for 2009." 

Variety has reported that NBC Universal is planning to cut $500 million in spending next year to prepare for an expected continuation of the worldwide economic slowdown.  The article states President and CEO Jeff Zucker announced the cuts Friday in a staff memo.  The reduction would equal 3 percent of the company's budget.  Variety says division heads will decide how to reduce their spending.  But Zucker's memo suggested several ways, including staffing reductions and cutbacks in budgets for travel, entertainment and promotions. 

NBC Universal faces additional pressure because its parent, General Electric, has been coping with money woes on an epic scale, especially given its reliance on financial services in a frozen credit environment.  When GE reported third-quarter earnings on Oct. 10, NBC Universal was one of the few positive spots, with revenue up 35% from a year earlier to $5.07 billion and  profit that increased 10% to $645 million.  But on a conference call, Keith Sherin, GE's chief financial officer, said the company is worried about profits and advertising at the local station level and at the NBC broadcast network.  "We are cautious on the outlook here," he said.

Local stations, including NBC Universal's, are taking a hit due to declines in local advertising, especially from the automobile and retail industries.  Overall ad spending on local stations was already down 4.4% in the first half of 2008, according to TNS Media Intelligence. 

Variety said the memo didn't specifically mention any layoff plans and a person familiar with the situation said that no target has been set for reducing the company's headcount.

The announcement comes a day after NBC's Spanish-language Telemundo division announced that it was cutting 5% of its workforce, about 85 jobs, to cope with an advertising slowdown.    The cuts, made last week, came in response to automotive and financial services  paring back ad budgets, said Telemundo spokesman Alfredo Richard.  "Clients who have cut down spending may have cut down first on multicultural," Richards said.  "We're feeling the impact probably a little bit sooner than the general market."

800px-Withounopar-21011 The downsizing of Telemudo, based in Florida operating 16 stations in the U.S., comes even as its audience grew 160 percent from last year to 1.9 million viewers on its nightly 10 p.m. novela, "Sin Senos No Hay Paraiso (Official site)"  ("Without Breasts There Is No Paradise" (Wikipedia)) based upon the book "Without Tits There is no Paradise", about a prostitute who gets breast implants to lift herself out of poverty by attracting a rich cocaine smuggler and cast members who star in porn.

Several on-air personalities were let go, including Alfonso De Anda, former co-host of the morning show "Cada Dia," soccer commentator Alejandro Blanco, and Mexico-based entertainment reporter Luis Magana.

NBC Universal is the first media giant to outline specific cuts since the Wall Street meltdon.


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Even The Economy Affects The Internet [Yahoo Job Cuts]

10/20/2008 06:17:00 AM

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yhoo Yahoo Inc is expected to outline plans to cut expenses, which would include future job cuts, when it reports it quarterly earnings tomorrow (Tuesday).  The Internet company will discuss the scale and timing of the future layoffs, but specific details of the future layoffs, but specific details on the exact jobs to be eliminated will not be disclosed, a source familiar with the situation said on Sunday according to a Reuters article.

The Wall Street Journal reported that the future layoffs will exceed the 1,000 jobs Yahoo previously said it would eliminate.  Some managers have also been asked to identify operating budget cuts of around 15 percent, according to the Wall Street Journal.

Yahoo recently hired consultants Bain & Company to help identify potential "structural changes".

Yahoo & Microsoft

Microsoft has denied reports CEO Steve Ballmer believes a Yahoo deal could still be on the cards.  "Our position hasn't changed," the company said in a statement.  "Microsoft has no interest in acquiring Yahoo; there are no discussions between the companies."  The comment follows media reports Ballmer told Gartner ITXpo conference attendees the Windows maker might still pursue some form of search tie.   

Ballmer had gone on to remark that "We offered $33 bucks (for Yahoo) and it's $11 today.  It's clear Yahoo didn't want to sell.  They probably still think it's worth more than $33 a share."

"I still think it makes sense for their shareholders and ours."

Meanwhile Yahoo has declined to comment on Ballmer's statement even though its shareholders are hoping that Microsoft may return to the negotiating table.

Yahoo's shares have lost more than half of their value since the company rebuffed a $33 per share, or $47 billion, takeover offer from Microsoft.  On Friday, the shares closed at $12.90.  The company is currently valued at $18.6 billion compared to the $47 billion originally offered by Microsoft in January.

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