Diary

My Former Employers Fiscal Ineptitude

In my book I bash my former employer for financially incompetent. I give plenty of examples to support my claim that most of their managers and financial employees cannot run their own finances let alone the finances of a business unit. The only reason my former employer has a healthy financial standing is because they have sold off all but basically one business unit which brought in billions of dollars in cash. It is important to note the company had not created a new business entity since the new CEO and its cronies took over in 1996. They have torn down all of what the previous CEO created and today have very little to show for their predecessors achievements. Thus, they had cash in hand to squander and they have not disappointed. They purchased one company in 1997 for over 700 million and in less than 5 years the plant and business unit was dissolved. In 2000 they bought another company that had earnings of less than 250 million dollars a year for nearly 8 billion dollars. Nearly a decade later it is not hard to imagine that my former employer has not come close to breaking even on the purchase. Besides, my former employer always makes its major purchases when the economy is good so they pay a premium for the expenditure. Instead, if they had any financial fortitude they would make major purchases during a recession to get a discount. Not my former employer, they wait to make their purchases at a premium even though they have cash on hand to spend during a recession. I can think of two buildings in the last 10 years they started to construct, but never completed. They waste money like the government.

 

Today, I got more proof to support my claim that my former employer is financially stupid. They are suing Citigroup, BNY Capital Markets, and Morgan Stanley for 524 million lost in auction-rate securities. They claim Citi, BNY, and Morgan Stanley told them auction-rate securities are highly liquid and they mischaracterized the risk in these investments. This is a frivolous claim. Any competent company or person should research and investigate any investment. Supposedly, the auction-rate securities that my former employer invested were getting a 10 percent return before the auction-rate securities market crashed in February of 2008. Just as the morons that invested with Bernard Madoff’s Ponzi scheme discovered, if something looks to good to be true, then it probably is. I may not be the smartest guy, but I would never invest in anything that guarantees double digit returns and is completely liquid. It is simple commonsense that any investment is subject to a down turn. If the investment claims to be independent of the economy or the stock market, they are lying. It is that simple.  

 

My former employer fell into the same trap that other companies and individuals did over the past several years. They purchased into a financial bubble and let their greed get in the way of rationale or commonsense thinking. What my former employer did was no different than individuals who purchased homes they could not afford during the housing bubble and when the housing market collapsed they lost thousands. They too were greedy and not thinking rationally. My former employer was offered a guaranteed 10 percent and they could sell at anytime for a profit. Yes, it is too good to be true, and that market collapsed just as the Madoff Ponzi scheme did.

 

The taxpayers and the government owe my former employer nothing. The courts should throw out the case. My former employer should lick it wounds and hopefully learn a valuable lesson. I doubt they would learn anything because they are too arrogant to admit they were wrong. Some things never change. After all, if they felt the least bit responsible they would have not filed a lawsuit. I am tired of the government and courts rewarding financial idiots compensation at my expense. The bailouts have got to stop!

 

Blog Site: http://patrickbohan.blogtownhall.com/

Book: Is America Dying? (Amazon.com, Barnes and Noble)