The Just One:

Broken Securities Industry Still Has $20 Billion to Pay Bonuses

Oct. 27 (Bloomberg) -- Five straight quarters of losses and a 70 percent slide in its stock this year haven't stopped Merrill Lynch & Co. from allocating about $6.7 billion to pay bonuses.

Goldman Sachs Group Inc. and Morgan Stanley, both still on track for profitable years, have set aside about $13 billion for bonuses after three quarters, down 28 percent from a year ago. Even some employees at Lehman Brothers Holdings Inc., which declared the biggest bankruptcy in U.S. history last month, will get the same bonus they received a year ago.

Maybe there's a correlation here: beauty, brokers and bonuses.

"Ugliness has recently emerged as a serious subject of study and academic interest unto itself, …. Sociologists, writers, lawyers and economists have begun to examine ugliness, suggesting that the subject has been marginalized in history and that discrimination against the unattractive, while difficult to document or prevent, is a quiet but widespread injustice.

One pioneering study, “Beauty and the Labor Market,”; published in the American Economic Review in 1994, estimated that unattractive men and women earn five to 10 percent less than those considered attractive or beautiful, ...

http://www.nytimes.com/2008/10/30/fashion/30ugly.html?pagewanted=1&_r=1

Nanna, who will renew the prescription for Xanax

The old-fashioned BB is out?

Time for triple B ratings?

High gas prices are not always bad, just ask Exxon. Now, however, that the price at the pump is falling ... I see a possible future bailout.

David

Exxon Mobil posts biggest US quarterly profit ever

HOUSTON – Exxon Mobil Corp., the world's largest publicly traded oil company, reported income Thursday that shattered its own record for the biggest profit from operations by a U.S. corporation, earning $14.83 billion in the third quarter.

http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/earns_exxon_mobil

A hedge fund manager who made what is thought to be one of the biggest percentage profits of all time bowed out of the business on Friday with a fierce attack on the "idiots" running big banks who were willing to take the other side of his bets. http://us.ft.com/ftgateway/superpage.ft?news_id=fto101720081625437042

Portfolio got a copy of the must-read missive:

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America. (via http://www.clusterstock.com/2008/10/hedge-fund-manager-quits-slams-idiot-mbas-urges-hemp-investments)

"We’ve all enjoyed the fantastic ride for the last few years...."

Credit Crunch – A Cross-Cultural Case Study

What strikes me about it is the way in which certain key cultural characteristics – especially in the USA – may have been to key contributory factors to the problems. Let me briefly explain what I mean by this:

• Individualism: A key US characteristic (seen as a virtue in the States) which leads employees to have less of a sense of responsibility to the company and more of a sense of responsibility to themselves. This is one of the great strengths of the US economy but is it possible that, if left unchallenged, it can have the consequence of people making short-term decisions to better themselves at the expense of a greater whole?

• Short-termism: One of the by-products of economies which are mainly equity financed (USA, UK etc.) is that people are driven by quarterly results. This again leads to people taking short-term decisions and looking for ‘quick wins’ at the expense of a more coherent long-term strategy. This short-term outlook is, of course, exacerbated by a bonus culture which rewards people for delivering results NOW.

• Enthusiasm: One of the biggest differences in approach to business between employees in the US and many of their European colleagues would be that, whereas people in the US are expected to have a positive, enthusiastic, ‘can-do’ mentality, many Europeans would expect to show a more cautious (even cynical) approach. This leads people in the States to feel a need to join in enthusiastically with new ideas and to be seen as really positive. Can this also lead to a lack of rigorous analysis? Are people afraid to challenge bad ideas because of the risk of seeming negative and a ‘trouble-maker’? ... http://www.worldbusinessculture.com/blog/?p=5