Searching for Ten Baggers
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The lift is in play for all these stocks
What is up with ATOG?
TFZI and SOCI Looking good if gold takes off
http://seekingalpha.com/article/5313-marc-faber-gold-will-hit-3-000-per-ounce
TFZI and SOCI Looking good if gold takes off
http://seekingalpha.com/article/5313-marc-faber-gold-will-hit-3-000-per-ounce
Any thoughts on TFZI , EPIC?
SOCI and FRGY getting ready to bust a move
Winners line up
SOCI, TFZI, FRGY
.002 and then blast off
TFZI has got gold in the cards.
Major events are about to transpire in the weeks ahead that will affect the lives of all Americans who aren't prepared... and I wanted you to be aware of it because the mainstream media isn't covering it.
I already expressed my outrage the other night about how the mainstream media spent the whole week talking about $165MM in AIG bonuses which are completely irrelevant when it comes to the future of our country. $165MM won't be enough to buy a can of soup soon so who cares if these executives got the money or not.
Its absolutely mind-bogging how the Federal Reserve in one day can announce they are expanding their balance sheet by $1.15 trillion, which is nothing more than printing money... yet this gets very little media coverage. $1.15 trillion is 7,000 times more money than $165MM.
Its sad and pathetic how Congress wasted time holding hearings on AIG bonuses when they should've been holding hearings on the need to have oversight of and possibly eliminate the Federal Reserve... because they are creating the real crisis that will destroy America.
The reason why I believe the upcoming Gold boom will be bigger than the dot-com and Real Estate booms combined, is because the Dollar bubble is much larger than the dot-com and Real Estate bubbles at their peaks combined... and as the Dollar starts to collapse in a downward spiral... Gold could literally go to infinity.
When I predict Gold goes to $5,000 per oz over the next few years, this is only if Bernanke, Obama and the Congress reverse course immediately. Every day that goes by where Congress distracts Americans with nonsense while the Federal Reserve prints trillions in new Dollars... the odds increase that we will see Hyperinflation and Gold will go much higher than $5,000 per oz.
The reason why we have a Dollar bubble as large as it is today is simple. The Dollar is the world's reserve currency... which basically forces countries around the world to transact in it and hoard large Dollar reserves. It became the reserve currency for two reasons... it was backed by Gold, and the U.S. was the leading producer of cheap goods that were exported to the rest of the world.
Today, the U.S.'s biggest export is inflation and the Dollar is backed by nothing but faith and confidence that it will always be accepted as money. In order for people to have faith and confidence in the Dollar, its supply needs to be kept scarce. By the Federal Reserve printing over $1 trillion in new Dollars without any debate, discussion, vote, oversight, or transparency of any kind... the world is beginning to figure out that the U.S. will debase its currency until it is completely worthless.
Now, what absolutely nobody in the media is discussing... Russia is calling for a discussion at the April 2nd G20 summit in London on how to replace the Dollar as the world's reserve currency. Sources are now saying that China and other emerging nations are backing Russia's call for this discussion.
I believe the sources are correct because as I discussed last week, China's Premier of the State Council Wen Jiabao said on March 13th he is worried about the safety of the U.S. Treasuries they are holding and wants assurances that the investments are safe. He knows they aren't safe and that we have no way of paying them back unless we print the money and give them Dollars that are worthless.
The main reason we haven't seen massive inflation up until today was because of China's willingness to finance our spending and buy our treasuries. But with the Federal Reserve now buying its own treasuries... I am sure China will not only stop buying them but possibly dump the treasuries they own.
In the weeks ahead... we could see a massive worldwide rush out of the Dollar and into Gold. Every day that goes by is one less day we have to purchase Gold below $1,000 per oz, and the next time it breaks $1,000 I doubt it will ever come down to these levels again.
So for all of you with parents, grandparents, children, aunts, uncles, and cousins who are sitting there holding Dollars, treasuries and bonds... call them right now and tell them they need to get rid of them immediately.
If they still own Real Estate, tell them to just lower their asking price and dump it for whatever they can get... because houses will be practically given away soon. Prices will need to come down to a level where Americans can afford them without getting a mortgage. The average house will probably cost only 20 oz of Gold in the future.
Buy all of the Gold and Silver you can get... because you will be shocked by how quickly they both go through the roof in the second half of 2009.
In Zimbabwe the currency has been officially declared dead and to survive Zimbabweans spend their days panning rivers for small dust particles of Gold. If they are strong and work hard enough to pan for 0.1 gram of Gold, they can buy a loaf of bread and live for another day.
Make sure you spread the word about Lebed.biz because I believe many of the billionaires in this country are about to lose everything and the U.S. will have a new class of wealthy people in the future... and it will be those who discover the Gold and Silver stocks of the future today.
When I released my November 3rd top ten picks for the next 4 years list... they were all Gold and Silver plays and I said they all had the potential to double in the short-term and gain by 1,000% during the Obama administration. Half of the list has already more than doubled including my #1 pick DROOY which at its high on Thursday was up 176% since releasing the list.
Many of the people who doubted me and called me crazy in 2005 when I first started predicting the collapse of the Real Estate market and started urging people to Buy Gold at $450 per oz... are apologizing to me now.
Hopefully nobody doubts me about the Hyperinflation that is ahead.
ATOG on radar big guy
kkk. if the rain keeps up we will be all good
TFZI. Kachingggggg
.001. All sorts of love
TFZI this week :)
Going higher on gold. The printing press is on overtime. The day to pay is at hand.
Time to reload reload. TFZI going to look sweet this week.
FRGY is like Red Bull - It going to give you wings :)))
A hard break @ .002 and we spike to .005 on FRGY
SOCI, FRGY and TFZI for next week
SOCI, FRGY and TFZI for next week
.005 next week??
Looks like you were right
Gold is set to move much higher
TFZI has read the tea leaves and is in the right place at the right time
http://www.reuters.com/article/hotStocksNews/idUSTRE52J10Y20090320
SOCI could be sitting on a huge coal bonanza
Lota Bay Coal Mine Exploration in Chile
March 12th, 2009 Lota was a major coal-mining centre in southern Chile, situated on the Golfo (gulf) de Arauco. Although the city of Lota was founded in 1662, sustained development of coal mining did not begin until 1852, when the industrialist Matias Cousino started a coal-mining enterprise. Completion of a railway from Concepcion, 32 km north, in 1888 stimulated growth. In the 1990’s Lota’s coal resources became exhausted and cheaper Colombian coal began to compete in the market causing the coal mines to close after 145 years of continuous operations.
Over the 145 year span of Lota coal mine operation, many tons of coal was dumped or spilled into the harbor. Most of the spilled coal resulted from primitive shipping and conveying practices that were in use over the last 145 years.
In March 2006 a drilling test was performed in this area. The net results of these tests show 275,000 proven tones of recoverable bituminous thermal coal in the harbor with probable reserves of 90,000 tons. The coal within the boundaries of the concession is a layer averaging 2.26 meters in thickness in 10 meters of water with 1.7 meters of overburden.
Ms. Latapiat acquired the rights to remove the Lota coal through a Minor Maritime Concession On A Section Of The Sea Floor from the Chilean Government on August 20, 2008. As outlined above, Southern Energy has entered into an agreement with Ms. Latapiat to acquire this interest.
The operational plan is to dredge up the coal and process it in an adjacent industrial site. Lota has grid power, water, sewage, road and rail access. The coal will be marketed to nearby coal burning thermal electric generating plants which currently have to import to meet the growing electrical demands.
The projected economics is based on the current price for coal in Chile of $60 per ton. This price reflects the demand for coal in Chile as 84% of Chile’s electrical production is from coal fired generation plants. At a median price of $60 per ton, the gross value of the project is $21.9 million, and with dredging and recovery costs of approximately $30 per ton, the gross profit is $11 million for the two year operating period
Lota Bay Coal Mine Exploration in Chile
March 12th, 2009 Lota was a major coal-mining centre in southern Chile, situated on the Golfo (gulf) de Arauco. Although the city of Lota was founded in 1662, sustained development of coal mining did not begin until 1852, when the industrialist Matias Cousino started a coal-mining enterprise. Completion of a railway from Concepcion, 32 km north, in 1888 stimulated growth. In the 1990’s Lota’s coal resources became exhausted and cheaper Colombian coal began to compete in the market causing the coal mines to close after 145 years of continuous operations.
Over the 145 year span of Lota coal mine operation, many tons of coal was dumped or spilled into the harbor. Most of the spilled coal resulted from primitive shipping and conveying practices that were in use over the last 145 years.
In March 2006 a drilling test was performed in this area. The net results of these tests show 275,000 proven tones of recoverable bituminous thermal coal in the harbor with probable reserves of 90,000 tons. The coal within the boundaries of the concession is a layer averaging 2.26 meters in thickness in 10 meters of water with 1.7 meters of overburden.
Ms. Latapiat acquired the rights to remove the Lota coal through a Minor Maritime Concession On A Section Of The Sea Floor from the Chilean Government on August 20, 2008. As outlined above, Southern Energy has entered into an agreement with Ms. Latapiat to acquire this interest.
The operational plan is to dredge up the coal and process it in an adjacent industrial site. Lota has grid power, water, sewage, road and rail access. The coal will be marketed to nearby coal burning thermal electric generating plants which currently have to import to meet the growing electrical demands.
The projected economics is based on the current price for coal in Chile of $60 per ton. This price reflects the demand for coal in Chile as 84% of Chile’s electrical production is from coal fired generation plants. At a median price of $60 per ton, the gross value of the project is $21.9 million, and with dredging and recovery costs of approximately $30 per ton, the gross profit is $11 million for the two year operating period
Southern Energy Announces the Acquisition of the Lota Bay Coal Concession
SANTIAGO, Chile, Mar 10, 2009 (GlobeNewswire via COMTEX) -- Southern Energy Company, Inc. (Pink Sheets:SOCI), a publicly traded resource exploration company, is pleased to announce that it has entered into a definitive agreement to acquire the Lota Bay coal concession located in Lota, Chile. Under the terms of the agreement, the Company will pay to the seller, Ms. Maria Latapiat, a total of $8,000,000, consisting of 5,000,000 shares of restricted common stock at a deemed price of $1.50 per share and a cash payment of $500,000, payable on or before March 31, 2009.
About the Lota Bay Coal Concession
Lota was a major coal-mining centre in southern Chile, situated on the Golfo (gulf) de Arauco. Although the city of Lota was founded in 1662, sustained development of coal mining did not begin until 1852, when the industrialist Matias Cousino started a coal-mining enterprise. Completion of a railway from Concepcion, 32 km north, in 1888 stimulated growth. In the 1990's Lota's coal resources became exhausted and cheaper Colombian coal began to compete in the market causing the coal mines to close after 145 years of continuous operations.
Over the 145 year span of Lota coal mine operation, many tons of coal was dumped or spilled into the harbor. Most of the spilled coal resulted from primitive shipping and conveying practices that were in use over the last 145 years.
In March 2006 a drilling test was performed in this area. The net results of these tests show 275,000 proven tones of recoverable bituminous thermal coal in the harbor with probable reserves of 90,000 tons. The coal within the boundaries of the concession is a layer averaging 2.26 meters in thickness in 10 meters of water with 1.7 meters of overburden.
Ms. Latapiat acquired the rights to remove the Lota coal through a Minor Maritime Concession On A Section Of The Sea Floor from the Chilean Government on August 20, 2008. As outlined above, Southern Energy has entered into an agreement with Ms. Latapiat to acquire this interest.
The operational plan is to dredge up the coal and process it in an adjacent industrial site. Lota has grid power, water, sewage, road and rail access. The coal will be marketed to nearby coal burning thermal electric generating plants which currently have to import to meet the growing electrical demands.
The projected economics is based on the current price for coal in Chile of $60 per ton. This price reflects the demand for coal in Chile as 84% of Chile's electrical production is from coal fired generation plants. At a median price of $60 per ton, the gross value of the project is $21.9 million, and with dredging and recovery costs of approximately $30 per ton, the gross profit is $11 million for the two year operating period.
About Southern Energy Company, Inc.
Southern Energy Company, Inc. is a publicly traded resource exploration company. From 2007 to the present the company has been active in seeking out resource opportunities in North and South America to explore, develop, and produce. The Company is currently focused on the acquisition, exploration and development of coal, gold and silver properties throughout South America.
Please visit http://www.southernenergycompany.com for more information.
Alot of meat on the bone for SOCI
Southern Energy Announces the Appointment of Dr. David Shaw
SANTIAGO, Chile, March 11, 2009 (GLOBE NEWSWIRE) -- Southern Energy Company, Inc. (Pink Sheets:SOCI), a publicly traded resource exploration company, is pleased to announce that Dr. David Shaw has agreed to join Southern Energy as a Geological Consultant to the Company.
Dr. David Shaw graduated in 1973 from the University of Sheffield, England, with a B.Sc. (Sp. Hons.) in geology followed by a Ph.D. in structural geology from Carleton University, Ottawa. Since completing his doctorate, Dr. Shaw has worked both in the technical and financial communities within the resource industry. He spent seven years with Chevron Resources in Calgary and Vancouver, employed initially as an in-house structural consultant on both metal and hydrocarbon exploration programs and then as a member of a hydrocarbon project financial evaluation team. Upon leaving Chevron, he initiated and developed the Resource Research Group at Charlton Securities Ltd., Calgary before assuming the position of Senior Mining Analyst, Corporate Finance, at Yorkton Securities Inc. in Vancouver. Throughout Dr. Shaw's career, he has built strong relationships with European financial institutions and the global mining community. Currently, Dr. Shaw is employed as the Chief Executive Officer of Colombia Gold plc, a private U.K. company that is engaged in precious metal exploration in Colombia. In addition, from 2005 to the present, Dr. Shaw has served on the board of directors of First Majestic Silver Corp., a Canadian public company with producing silver mines in Mexico.
About Southern Energy Company, Inc.
Southern Energy Company, Inc. is a publicly traded resource exploration company. From 2007 to the present the company has been active in seeking out resource opportunities in North and South America to explore, develop, and produce. The Company is currently focused on the acquisition, exploration and development of coal, gold, and silver properties throughout South America.
Please visit http://www.southernenergycompany.com for more information.
Forward-Looking Statements
The price of gold will keep TFZI in the consumer's good graces
Lift off is coming here. Base building has been solid
Southern Energy Announces the Acquisition of the Catalina Silver and Gold Property Near Santiago, Chile
SANTIAGO, Chile, Mar 19, 2009 (GlobeNewswire via COMTEX) -- Southern Energy Company, Inc. (Pink Sheets:SOCI), a publicly traded resource exploration company, is pleased to announce that it has entered into a definitive agreement to acquire the Catalina Silver and Gold Property located northwest of Santiago, Chile. Under the terms of the agreement, the Company will acquire the property for a total of 2,000,000 shares of restricted common stock at a deemed price of $1.50 per share to be issued on or before the closing date of March 23, 2009.
About the Catalina Silver and Gold Property
The Catalina property is comprised of 14 claims blocks totaling 1100 hectares. The claims are located 200 km northwest of Santiago, the capital of Chile, and 31 km from the mining town of Petorca. The area is a well-known district of copper, gold and silver mining, and the area is currently being staked and explored by several of Chile's larger mining producers, with many small-scale mining operations around the claims now acquired by Southern Energy.
The prospect itself has produced and shipped ore to Enami, the state-owned custom smelter and refinery located 50 km from the property. The last shipment was 22.4 tons of ore to a locally-owned custom mill and concentrator facility located 22 km from the mine.
Representative samples of the shipped ore and results from chip samples across the systems from the different "veins" range from 0.6 to 5.37 g/t gold, 0.6 to 7.89 g/t copper, and 20 to 497 g/t silver. These "veins" run 3000 meters in length and 0.80 meters to 3.20 meters in width and appear to be increasing in grade and width at depth.
The Catalina main adit is drifted into the shear zone at an almost flat grade and south for about 110 meters. The wall rock is of sufficient stability that support beams and timbering is not required in the underground workings. The main tunnel outlines a clear, consistent and predictable structure that contains extremely high-grade copper, gold, silver, lead and zinc ore. The gold content is increasing further to the west. The main tunnel runs north to south with two shafts constructed downward to access additional ore below the main area.
The main mineralization is chalcopyrite, chalcocite, sphalerite, galena and bornite. In 2006, a Consulting Engineer estimated more than 250,000 tons of high-grade reserves. It is not currently known how much deeper this formation goes below the current workings, but due to the strength and competence of the structure, it is likely to carry on to much greater depth and distance.
Initial sampling and mapping of the claims has discovered a well mineralized area of 3 kilometers by 1 kilometer. The Company plans an extensive geological program to delineate the mineralized area and increase indicated reserves.
The Catalina project is in close proximity to several mining communities featuring an excellent work force and access to mining equipment with infrastructure comprised of nearby mills, concentrators and smelters for processing. Ore trucks are able to access the property and deliver ore directly to the mill.
Production can be quickly upgraded to provide both positive cash flow and exploration development for future benefit.
About Southern Energy Company, Inc.
Southern Energy Company, Inc. is a publicly traded resource exploration company. From 2007 to the present the company has been active in seeking out resource opportunities in North and South America to explore, develop and produce. The Company is currently focused on the acquisition, exploration and development of coal, gold and silver properties throughout South America.
Please visit http://www.southernenergycompany.com for more information.
Forward-Looking Statements
You should not place undue reliance on forward-looking statements in this press release. This press release contains forward-looking statements that involve risks and uncertainties. Words such as ``will,'' ``anticipates,'' ``believes,'' ``plans,'' ``goal,'' ``expects,'' ``future,'' ``intends,'' and similar expressions are used to identify these forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks we face as described in this press release. For further information about Southern Energy Company, Inc. please refer to its Web site at http://www.southernenergycompany.com.
This news release was distributed by GlobeNewswire, www.globenewswire.com
Gold is about to KRAZYYYYYYYYYYYYYYYYYYY
It's the waterslide into Hell! Whee!
What a day. Under cover of the AIG scandal, the Fed did something foolhardy yesterday.
"Fed plan stuns investors," says the headline in the Financial Times this morning.
It should stun us all. But we're getting used to expensive bamboozles.
In response to the Fed's latest move, the yield on 10-year Treasuries fell more than any time since they started keeping records in 1962. From 3.01% it had fallen to 2.48% when last we looked.
Yields fell because the Fed said it would buy $300 billion worth of government debt. Stocks rose - with the Dow up 90 points. And the dollar fell heavily against the euro...down to less than $1.31/euro.
Of course, most people have no idea what this means. But here at The Daily Reckoning we weren't born yesterday. And we've been following this story for the last 38 years.
Yes, dear reader, when Richard Nixon cut the link between the dollar and gold, the world has been using a money system that is, to put it in its best light, experimental. The last experiments of this sort - on anything like this scale - were conducted in the 18th century. The Banque Generale was set up by that rogue, John Law, to buy up the debt of France - of which there was plenty. And a similar plan was underway in England soon after - later known as the South Sea bubble. It was similar in that the bank substituted pieces of paper - stock in the South Sea Company - for government debt.
In the U.S. version, circa 2009, the Fed uses pieces of green paper called 'dollars' to buy up the government debt.
Wait a minute...where do the dollars come from? Oh, silly reader, they come from the same place that shares in the South Sea Company...or shares in the Mississippi Company (the French version) came from - they just printed them up!
And now, they don't even have to print them up. When the Fed buys U.S. debt, it merely makes an electronic notation...like an IOU that disappears as soon as the power goes out.
When those 18th century debt buy-up schemes were put in place, at first their stock rose. John Law's shares were such a hit that ladies would stop him in the street...it was rumored that they offered their most cherished favors in exchange for an opportunity to buy. Shares in the South Sea Company, meanwhile, went up 10 times in a single year.
U.S. bonds rose strongly yesterday too; of course, the richest investor in the world just entered the marketplace - announcing he would buy $300 billion.
And if that doesn't work...he'll buy more.
"Fed to buy $1 trillion in securities to aid economy," reports the New York Times.
"The Fed is engaging in massive quantitative easing," said William Poole, former head of the St. Louis Fed.
And why not? The central banks of England, Japan and Switzerland are all buying their government bonds. The IMF too.
Besides, all the bailouts and stimulus plans so far haven't worked. And at least this latest plan makes a little more sense. The problem is debt, not liquidity. Buying up the securities of Fannie and Freddie, the Fed will lower the cost of mortgage debt. This will give homeowners an opportunity - probably the last one of their lifetimes - to refinance their houses at low interest rates. The target range...we've heard...is between 3% and 4%.
In the short run, if the homeowner is able to refinance at such low rates, he reduces his monthly cash-flow burden and frees up cash for other things (such as paying down his credit card debt). In the long run, if he's able to lock-in those low rates, he will almost certainly see the debt burden itself significantly eased - thanks to rising inflation rates.
Lenders beware! U.S. Treasury bonds are attractive because they are safe. But they could turn out to be the riskiest safeguard in financial history. This is a moment when it is probably better to be a borrower than a lender. Refinance your house at 5% fixed rate. For the first few years, paying that mortgage may be as painful as marriage counseling. But then, when the marriage finally breaks up...and inflation heads to 10%... think how free and easy you'll feel. In a few years, your mortgage will practically disappear.
This is so attractive; we're tempted to do it ourselves. But we haven't had a mortgage in 20 years...we don't want one now.
Better to follow the smart money. John Paulson is one of the few hedge fund managers to understand the financial crisis and to make money in it. He made a fortune betting against subprime in 2007. In 2008, his fund was up 37% - while the rest of the world lost trillions.
What's he doing now? He was in the news this week, because he bought a big stake in a gold miner - AngloGold Ashanti - for $1.28 billion.
Gold went down yesterday...and then bounced back over $930.
"The dollar took a major hit after the Fed announced that it will be buying more government bonds and mortgage backed securities - that's another 1.2 trillion in 'new' currency hitting the money supply," writes our intrepid correspondent, Byron King. "The announcement created a frenzy in the gold market. The price of gold shot up $50 per ounce less than 2 hours after the feds meeting."
"Precious metals are like fire insurance. You don't wait until you smell smoke to call your agent and buy coverage."
Given yesterday's announcement, it's surprising that it is not already over $1,000 an ounce.
And back to Bill, reporting from Paris, France...
Those poor English. If any people were dumber at finance than Americans, it was the English. While debt in the United States rose to an unprecedented 350% of GDP, in England it went to 500% of GDP. And now joblessness in Britain has risen above 2 million for the first time since 1997.
House prices were outrageous in the United Kingdom - but they're becoming less outrageous by the day. One expert says he expects them to fall another 55% before hitting bottom.
Meanwhile, here in France, the chiselers and whiners have taken to the streets. Today, there's a big strike going on - supposedly. We didn't see any signs of it on our way to work. But the French are said to be up in arms because of the financial crisis.
France is an importer of tourists and an exporter of luxury items...and high technology. The Russians are broke, so they're not spending billions on French champagne and fashions. Americans are broke, so they're not filling the restaurants the way they did last year. The English are broke, so they're not buying little houses in the south of France. The airlines are losing money, so they're not buying French planes. And so forth...
"Class war," the Financial Times calls it. Factories are closing. Layoffs are increasing. The unions have organized to protect jobs. And the government is doing a bad job of lying. It has bailed out the banks...but failed to pretend to bail out the little guys too.
We'll let you know how this develops...
But today's headline story is still the AIG scandal.
"Give us back our money," yelled a protestor at Edward Liddy, AIG CEO, yesterday.
The taxpayers are upset. The politicians are pretending to be upset. And the media thinks it has a hot story.
But what is remarkable is that the public has an opinion about how much insurance executives should be paid. Whenever the public has an opinion on something that should be a private matter, you can be sure there's a bamboozle in it somewhere.
"Street of Shame," writes an editorialist in the FT. AIG bonuses are a "humiliation for Wall Street and a travesty for the taxpayers."
What they really are is a huge distraction. The insiders are making off with billions, while the watchdogs are yapping at a handful of over- paid insurance hacks.
David Leonhardt, writing in the New York Times:
"I looked into every large company that had changed chief executives over the previous six months. Not a single boss at any of them had left for another job. Such departures are so rare that Booz & Company's annual study of executive turnover doesn't even include a category for them. The benefits of the job - the pay, the perks, the gratification that comes from running a company well - are too good to leave, even for a similar job.
"The situation is a little different for jobs below the top level, particularly on Wall Street. Surely, if the employees of AIG's notorious financial products division were to be denied their bonuses - a big chunk of their annual compensation - many might leave.
"The nub of Mr. Liddy's argument is that these departures would be a terrible thing. But there are several weaknesses with this argument.
"The first is that the original explanation for these bonuses was rather different. When they were devised in early 2008, months before the first bailout, as Mr. Liddy's letter to the government on Saturday explained, 'AIG Financial Products was expected to have a significant, ongoing role at AIG.' The idea, he said, was to guarantee 'a minimum level of pay for both 2008 and 2009.' So the rationale for AIG's retention bonuses is as malleable as the rationale for chief executives' bonuses.
"Most amazingly, the AIG bonuses haven't even accomplished their stated goal. Andrew Cuomo, New York's attorney general, said Tuesday that 52 employees who received bonuses had since left AIG.
"The second problem with Mr. Liddy's argument has to do with Mr. Liddy himself. His defenders have noted that the government brought him out of retirement to fix AIG and that he presumably puts a higher priority on doing a good job than pleasing AIG's employees.
"And he probably does. But he is also a product of the current, broken executive pay system. As the chairman of Allstate from 1999 to 2007, when the company's stock underperformed those of its rivals, he made $137 million. Almost $14 million of that, according to the Corporate Library, came in the form of stock that the company called a 'a tool for retaining executive talent.' Which means Mr. Liddy may not be entirely objective about retention bonuses.
"Finally, there is the question of how hard replacing those AIG employees would be. Certainly, some of them must have particular insight into unwinding the toxic portfolio they built. But I doubt that anywhere near all 418 financial products employees - who have received bonuses worth $395,000 on average - are indispensable. "
Mr. Leonhardt is right. But he is missing the point. Companies should be able to pay their employees however much they please. They should be able to go broke too.
That's how capitalism is supposed to work.
Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.
Do you have a live bid and ask?
Nice open today
CVRG is going to benefit from the new interest in gold
GN Blue. Going to crash
I know . Krazy good for CVRG
Nationwide. Krazy good for us shareholders
I think the break point of .001 will lead to a huge run
Kirkland Lake has had so many big mining plays