Tuesday, November 27, 2012

Stop Recycling Human Financial Waste like “Endless-Bankruptcy” Banker Michael A. Carpenter—from Kidder Peabody $600M Failure to Ally Financial GMAC $17B Bailout.
I am constantly overwhelmed by the basic human tenet: “That ‘shit’ floats to the top!”
Usually I delineate the detritus that constantly flows up and down the system in government ---both Republican and Democrats---alike.
In part,  I explain that phenomena by the fact that one takes basically a very weak narcissistic individual and then place them in a power structure where they need to excel by ‘sucking up’ and ‘beating down’—much like a totalitarian system.  In the end,  many succeed  because there is no accountability and sociopathy is part and parcel of  the political system. 
 [Previously posted a link to Eric Fromm’s book: The Anatomy of Human Destructiveness  read it to understand this type of sado-masochistic dynamic inherent in all organizations.] 
  This psychological dynamic clearly works as well in the banking world.  The only difference is that the dynamic of sucking up, sociopathy, and incompetence is replete with financial incentives and buy-outs
  Without going too much into the details of the situation, suffice it to say, that no one portrays my concept of ‘financial human detritus’ than Michael A. Carpenter.   He is currently the CEO of Ally Financial Inc. , one of the leading automotive financial services companies that had once been GMAC and once was profitable but turned into a lemon.  BUT then it was bailed out by THE AMERICAN CITIZENS, to the tune of $17 billion
  GM and Chrysler depended on Ally to finance their dealerships and inventories and in return the dealers would refer customers to Ally for auto financing. 
Simple business concept: You wash my hand and I wash yours!!
However, trust me when I say that no one can screw up a series of major businesses like the infamous Michael A. Carpenter. 
And by the way,  Ally still OWES US TREASURY ABOUT $12Billion.  And no one either in business or government knows how he will pay back this money.
Several years ago,  I was working as a managing director at Kidder Peabody -assigned the task of re-structuring that organization.   Michael Carpenter was the president and CEO when I was there.  In less than elegant terms,  I told him he was incompetent and incapable.  I also remember telling him in my humble but irreverent sotta voce tone some rather insulting things about his low class English accent, his second rate school of Nottingham University, you know, my usual style.
So I resigned and left Kidder PeabodyGary Lynch of the SEC was brought in to take down that corrupt investment bank bought by the ‘ingenious, brilliant Jack Welsh’. 
Subsequently, KP was liquidated.
As a reward for doing so poorly at KP,  Carpenter was hired by Sandy Weill, [another piece of human detritus who bought the right to place his name on my once prestigious medical school Cornell University Medical School now known as Weill MS],  to become Chairman and CEO of Citigroup’s Alternative Investments from 2002-2006.  ‘ The Carpenter’ was in charge of Salomon Smith Barney Inc. and Citibank’s Global Corporate Banking Activities.   Smith Barney went under as did Salomon brothers.
In short, Michael is the poster child for corruption, incompetency and upward mobility in the financial world.
We will never fix this corrupt financial system if we continue to re-cycle these incompetent managers that got us into the mess in the first place.   Let’s hold these guys like Carpenter accountable for their failures, do not put them on boards of other financial companies when they cannot even manage their own jobs!  And for god sake, do not bail them out with taxpayer’s dollars!
  Let, WE THE PEOPLE,  bury the FINANCIAL WASTE the way we bury any toxic substance --- Let’s keep our financial system as ASEPTIC as possible before it BECOMES A FINANCIAL CONTAGION---ONCE AGAIN!!!


  1. It really boggles my mind that in a nation of 300 million plus people, the same handful ride the carosel of power over and over again.

    The point about no oversight explains everything that is awry, for if there isn't a check on something, it will become corrupt naturally.

    Looks like this fellow is buds with the right people and keeps getting moved right along from one high paying gig to the next.

  2. a point of interest regarding one of john carpenters fellow alumni at nottingham university, a certain proffessor james kinsley-a professor of lingiustics who was called as an expert witness in a case about the word "bollocks" rather apt as most of what mr carpenter has achieved seems just that!! side note i didnt go to university and i can add this up plus i know what bollocks are and most of the comedians running the show lack a pair!!

  3. Kind of like losing major league baseball managers getting hired again and again.

    The same thing often happens with NBA head coaches.

    It seems to be a "clubby" thing were once you are invited into the club, you have risen over a threshold bar to get into the club and you are presumed to be better than somebody who isn't already in the club.

    Also, most club members either actually know each other or know of other club members by reputation.

    And as clubs tend to be exclusive & snobby, the members prefer to deal with club members rather than strangers.

    (Possibly, if you brought in lots of new people and they were successful, that might give away the game that these managers shouldn't be paid over 200 times what the guy on the factory floor makes.)

    Club members tend to have similar "values", in this case, tolerance of non-performance by other club members.

    Management and controlling ownership are often interconnected in a "good ol' boy" network.

    All the above are factors in the management "retread" recycling racket.

    In other words, it is the institutionalization failure.

    1. CNN just announced the NBC recidivist failure Jeff Zucker will be running the network.

      "Under Zucker NBC fell from being the number one rated network to the lowest rated of the four broadcast networks and was occasionally being beaten in the ratings by programming on some of the more popular cable channels...

      New York Times columnist Maureen Dowd wrote that in Hollywood “there has been a single topic of discussion: How does Jeff Zucker keep rising and rising while the fortunes of NBC keep falling and falling? ...many in the Hollywood community have always regarded him as ...a network Napoleon who never bothered to learn about developing shows and managing talent." She explained that Zucker "is a master at managing up with bosses and calculating cost-per-hour benefits, but even though he made money on cable shows, he could not program the network to save his life."

      ... 'Zucker is a case study in the most destructive media executive ever to exist... You’d have to tell me who else has taken a once-great network and literally destroyed it.'

      ..On June 2, 2010, the New York Post reported that Zucker would be paid between $30 million and $40 million to leave NBC Universal shortly after Comcast completes its 51 percent acquisition in the company."

      Media rolodexes are either filled with blackmailers, iou'ers, or empty cards.

  4. I once worked for a surgical implant company hit by the largest class action in it's field because it's managers were so venal that to save costs they cut out cleaning procedures to the products. We had thousands of failures with deaths, suicides, etc. in the patients. In particular, our head of Quality Assurance was only a high school grad who bought a bogus degree on the internet.

    All the managers from that company have done very well after this debacle. The physicians using our adulterated implants went along with our company's line excusing what happened least criticism also fall on them - and they actually continued to use our products.

    Other manufacturers also failed to criticize us, with many feeling that the same thing could have happened to themselves.

    The FDA office nearby went along with whatever the company claimed, and went so far as to praise the actions of the Quality Assurance manager.

    When I hired the biggest Qui Tam firm in Washington to help Medicare get some of their money back my attornies backed down because it turned out they weren't even trial lawyers and were unprepared to litigate the matter if it needed to be presented to a jury.

    In these situations people in an industry always circle the wagons and create myths that whatever went wrong was somehow caused by outside or excusable forces. Once this myth is established everyone goes along.

    1. Yes, you are correct.

      Most legal cases never go to trial (90% of legal cases settle before trial), so most lawyers don't go to trial.

      Now, admittedly, most large firms have a litigation team who have courtroom experience. But as your personal experience shows (and I have heard similar stories from lawyers and clients who retained law firms who were unexplicably very reluctant go to trial or advised settling winnable cases) there are law firms and sometimes solo practitioners, who don't have courtroom experience, but don't tell clients or potential clients about their lack of courtroom experience. Obviously, such an admission would retard their ability to garner paying customers (clients).

      There are also lawyers who can do the office work required, but simply aren't effective in the courtroom -- they lose winnable cases -- thus, they become "gun-shy" and seemingly always settle before trial.

      Thus, over time many lawyers "self-select" away from going to trial -- too many loses tends to make lawyers stay away from trial -- losing a winnable case is a painful & humbling experience, but good trial lawyers understand it's the cost of doing business. Even excellent trial attorneys lose at trial once in awhile. Trying cases in court is an art, not a science.

      And, because 90% of legal cases settle short of trial, these unexperienced or gun-shy lawyers are rarely exposed.

      But let me state there are plenty of excellent trial lawyers out there, but it does take a special breed: You have to be able to deal with uncertainty and be persuasive and be able to objectively evaluate the strengths & weaknesses of the case (juries are unpredictable -- going to trial is a "roll of the dice" -- that's one main reason, of many, most cases never go to trial, also, trials are expensive, so even if you win, after all is said and done and the legal bills come due, you don't come out much ahead).

      The "business decision", dollars & cents, leads most businessmen to settle for the devil they know and can live with as opposed to the devil they don't know and can't live with (a big loss of money at trial). Or a long jail sentence for the client if it's a criminal case.

      So, if you think your case has a likelyhood of going to trial, be up front and ask the lawyer at the initial interview if they have trial experience or the firm has a litigation team with trial experience. You might not get an honest answer, but a hesitant answer is as good an indicator as an open admission.

      Don't be afraid to ask about their trial experience, good trial lawyers will never hesitate to tell you about their experience and how good they are (trial attorneys are like figher pilots, most are cocky as hell, yet realistic).

    2. What happened is that they lied to me.

      They gave me a bogus reason why the case wasn't viable.

      Only after the time limit for filing was expired I dealt with another Qui Tam attorney with trial experience in these cases who explained cogently why there HAD BEEN nothing wrong with my case.

      This particular firm is the highest profile Qui Tam firm in Washington and they get publicity other firms don't.

      Unfortunately any firm in any venue unprepared to go to trial gives the defense a huge advantage in settlement negotiations.

      Defense attornies who know the Plaintiff, or "relator" in Qui Tam cases, has an attorney unprepared to go before a jury has a huge advantage the poor Plaintiff is totally unaware of.

      In my opinion there needs to be a barrister system here so that when clients hire someone they will know that person is actually licensed to practice in a court.

  5. Bob Dylan (hands down our greatest poet and songwriter) has a song about guys like this on his latest album. I'll just copy in the lyrics here for everyone's edification, but you gotta buy the album and hear him sing it too in his most gravelly grumpy old man voice. It's called "Early Roman Kings'.

    All the early Roman kings
    In their sharkskin suits
    Bow ties and buttons
    High top boots
    Drivin' the spikes in
    Blazin' the rails
    Nailed in their coffins
    In top hats and tails
    Fly away over
    Fly away, flap your wings
    Fly by night
    Like the early Roman kings

    All the early roman kings
    In the early early morn
    Coming down the mountain
    Distributing the corn
    Speeding through the forest
    Racing down the track
    You try to get away
    They drag you back
    Tomorrow is Friday
    We'll see what it brings
    Everybody's talking
    Bout the early Roman kings

    They're peddlers and they're meddlers
    They buy and they sell
    They destroyed your city
    They'll destroy you as well
    They're lecherous and treacherous
    Hell-bent for leather
    Each of 'em bigger
    Than all men put together
    They're sluggers and muggers
    Wearin' fancy gold rings
    All the women goin' crazy
    For those early Roman kings

    I can dress up your wounds
    With a blood clotted rag
    I ain't afraid to make love
    To a bitch or a hag
    If you see me comin'
    And you're standin' there
    Wave your handkerchief
    In the air
    I ain't dead yet
    My bell still rings
    I keep my fingers crossed
    Like them early Roman kings

    I can strip you of life
    Strip you of breath
    Ship you down
    To the house of death
    One day
    You will ask for me
    There'll be no one else
    That you'll wanna see
    Bring down my fiddle
    Tune up my strings
    I'm gonna break it wide open
    Like the early Roman kings

    I was up on Black Mountain
    The day Detroit fell
    They killed 'em all off
    And they sent 'em to hell
    Ding dong daddy
    You're comin'up short
    Gonna put you on trial
    In a Sicilian court
    I've had my fun
    I've had my flings
    Gonna shake em all down
    Like the early Roman kings

  6. Thank you to add it to my iTunes!

  7. Thanks for the good book recommendation and for explaining how these jerks get their positions; "sucking up and beating down". Explains a lot about the people I work for...LOL.