On the end of the rule of law in the West, another case study: MPs expenses

I am growing more and more worried about the raising populist anger spiralling out of control.

First, it was the “outrageous” (but legally binding by contract) golden parachutes of failed investment banking executives.

It followed the popular clamour against sky-high (but legally binding by contracts) executive pay.

Then it came poor Sir Fred Goodwin and his pension (legally binding by contract), and his public grilling by the British government and puppets who have nothing else to do sadly reminding me of Dr David Kelly and the alleged sexed-up report on Iraq’s WMDs.

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On the new clothes of the Spanish economy, where’s a child to tell the truth when you need it?

Hobbes, what Spain needs now, is the child in the crowd that that the emperor is walking down the street fully naked, and tells the truth. But they do not listen.

Today, it was the turn of the FT.com (Spain’s recession: After the fiesta). Paul Preston is considered one of the top specialists in the Spanish Civil War, and now it seems it takes the Financial Times to state the obvious. What is wrong with Spaniards that need a foreign voice to see reality as it is or was? Even El Pais, the leading left-wing Spanish newspaper, needs to quote the FT to comment on the matter.  Continue reading

On bonuses, RBS, and how to improve going forward

So the UK government decided to scrap the bonuses at RBS (FT.com).

UK gov, or its tax payers, owns 68% of the bank, so they say they are going to honour the contractual bonuses and scrap those directed to anyone related to the credit debacle (and slap wrist to the executive directors, they’ve been naughty, naughty, naughty… non-execs were nowhere to be found for comment, reprimand or else, probably busy un-overseeing a different company).

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Happy June 2, 2008! or Tax Freedom Day in the UK

We are free dear Hobbes! We are free!

Well, at least until January 1, 2009.

Free of what? You will ask. Well, according to the Adam Smith Institute up until June 1 of this year, the average UK resident hasn’t been working for him/her and his/her (gosh, this is stupid) family. He hasn’t been working for his employer either. Nope. For the last five months and 1 day you have been working for darling Darling, the cancellor, the Treasury, ultimately, the Government. Your Government. Continue reading

The second LwH Prize goes to… John Paulson

The ranking for the 2007 highest-paid hedge fund managers came our and we found out that John Paulson, founder of New York-based Paulson & Co, was paid an estimated $3.7b last year. The 52-year old New Yorker, beat George Soros and 2006’s top earner James Simons. Soros ranked second, earning about $2.9 billion. Simons was third, making an estimated $2.8 billion last year.

Paulson & Co. made money betting on the collapse of subprime mortgages in 2007. According to investor letters obtained by Bloomberg, the Paulson Credit Opportunities Fund soared almost six fold, helped by bets on slumping housing and subprime mortgage prices. Continue reading

On selfishness, bankruptcies and airlines

Here we go again Hobbes, a new example of double standards and lose-lose situation. This time around is the greed of a few –namely pilots- that is putting the livelihood of the many at risk. A dispute over seniority was holding back a possible merger between Northwest and Delta Air Lines.

With oil prices at more than $100 a barrel, reducing non-aircraft capital expenditures, number of seats they fly and their operating costs through synergies generated after merging, seemed -and still seems- the sensible thing to do.

But the potential merger collapsed last week because the pilots at both airlines could not agree on seniority lists. For pilots –you know, the guys who sit by at the plane while the computers fly it-, seniority Continue reading

On executive pay and trade union nonsense

Hobbes, this time around the target is Bob Diamond, from Barclays. After 12 years with the bank, he reportedly took home £21m ($42m) in pay and bonuses last year.

The figure includes a miser £250,000 basic salary, plus shares worth up to £14.4m and a £6.5m cash bonus.

The figure includes his basic salary of £250,000, plus shares worth up to £14.9m and a £6.5m cash bonus. Performance-related bonus for the three years ending December 31 was based in the securities unit exceeded a £2bn economic profit target for the period. Continue reading