“I’m so bored. I hate my life.” - Britney Spears

Das Langweilige ist interessant geworden, weil das Interessante angefangen hat langweilig zu werden. – Thomas Mann

"Never for money/always for love" - The Talking Heads

Wednesday, August 17, 2011

Looting in the plutocene!

Comparison: an old and reliable enlightenment tool. The philosophes loved the whole idea of comparison, for it seemed to magically produce progress in ideas. Unfortunately, comparison, as the elementary student of dialectics knows, simply fossilizes the embryo idea – leaving it forever in a pre-natal state unless it is vigorously moved forward via the forceps of antithesis and inversion.

However, under the shadow of that dialectic move, comparison still holds a great deal of anarchic power – satirical power. The enlightenment prehended the limits and fate of comparison in the preference given to satire.

To which I want to revert. Let us compare stories of looting.

Here’s one. It comes from the Royal Bank of Scotland. The Bank received 541 billion dollars worth of 1 percent and below loans from the Fed over the past 3 years. Why? Well, the Bank was preserved for all of us, we are told. Or rather, not told – our governors don’t have to tell us these things, they act for our own good. But the fluffers in the news, the bloggers and pundits, and sometimes the economists tell us that this was all for our good.

Oh, that good! So general we can barely feel it. But so specific that we can name whose good was served by the Fed’s kindly action. 9 people in the upper management of RSB, according to this story from 8 March 2011:

“… the nine key staff – including chief executive Stephen Hester – had been handed bonuses for 2010 of £10m in shares with a further £18m in long-term incentive plans that run until 2014 when their exact value will be known.

... The RBS disclosures came just 24 hours after Barclays lifted the lid on the pay deals it makes to its highest earners – handing five of them £110m.

Hester – whose £2m bonus for 2010 was announced last month and will be paid in shares – is receiving an extra £4.5m in stock through the long-term incentive plan on top of his annual bonus and £1.2m salary. This puts him on track for a pay deal of around £7.7m. For 2009 he did not take a bonus but received just over £4m through the long-term share plan.

Finance director Bruce van Saun is receiving £1.3m in shares for his 2010 bonus and a further £2.8m through the long-term incentive plan.

The largest bonus awarded in shares is the £2.5m handed to John Hourican, head of the investment bank. Next week it is likely to emerge that Hourican has received more than that because he is also being paid in the bank's debt – although he is not expected to top the £7.7m that Hester could be handed if he meets all his performance criteria.

American-based Ellen Alemany also emerges as a top earner with a £1.1m bonus in shares and £2.5m of stock awarded through the long-term plan. Nathan Bostock, who runs the parts of the bank being shut down or sold off, gets £637,000 in shares for his 2010 bonus and £2m through the long-term plan. Brian Hartzer, who runs the retail bank, had £600,000 awarded in shares for 2010 and £1.9m in the long-term plan.

The 2010 awards are coming from the £950m payout pool agreed with UK Financial Investments, which controls the taxpayer's 83% stake in the bank, at the time of the Project Merlin deal.

The Merlin deal requires the pay of the five highest earners reporting to the chief executive to be announced and RBS is expected to make those disclosures next week. The nine included in Tuesday's announcement are expected to be among them.”

And then there is the story of the looting that occurred on the streets of London and Liverpool and other cities in the UK. Disgraceful! It must have been considerable, as there are 1,000 people going to jail for it. So what are the figures we are talking about?

In Bristol police released dramatic footage of a jewellery shop being looted in the city centre, and still images of 17 alleged rioters taken on Monday night, and urged the public to name them. The videos from CCTV systems in the Cabot Circus shopping centre capture a group of at least 10 men, women and youths, some on bikes, breaking through the window of the Thomas Sabo jewellery shop where thousands of pounds of goods was stolen.”

“It has been estimated that the UK riots thus far have cost high street retailers around £80m in lost sales. High value shops like HMV, GAME and Comet were all the targets of looting.”

"...Carter, of James Street, Salford, was caught in King Street, Manchester, with a bag of clothes and shoes worth £500. He was sentenced to 16 months in jail for theft by finding.

The maximum sentence of six months in jail that lower courts can hand out was deemed not to be enough by magistrates.

A fourth person to be sentenced on Tuesday was Linda Boyd, 31, who received a 10-month suspended jail sentence. She was also handed an 18-month supervision order.

The court heard Boyd, of Acomb Street, Moss Side, was found by a police officer with a bag full of cigarettes and alcohol, so heavy she could not carry it.

In all, the looting carried out over three nights in the UK amounts to not even a single day of borrowing from TALF by Royal Scotland – amounts, in fact, to about an hour of borrowing. I find the numbers interesting. I find the proportion
interesting. I find it interesting to compare the danger to society of Ms Boyd, of Acomb street, with her bag of looted cigs, and the danger to society posed by Ms. Ellen Alemany, with her bag of £1.1m bonus in shares and £2.5m of stock. However, the stock and shares were never so vulgar as to be materialized as something you put in a bag – Ms. Boyd’s big mistake.

Now, Ms. Ellen Alemany sounds like a nice enough person, unlike the vile cig smoking Ms. Boyd. Daughter of a liquor store owner. Making her way to the top by hard work, no doubt. After carrying off her swag from RSB, she was given an honorary degree from a Rhode Island college in May of this year: PROVIDENCE, R.I. - Ellen Alemany, Head of RBS Americas and Chairman and Chief Executive Officer of Citizens Financial Group, Inc. has been named an Honorary Doctor of Business Administration at Bryant University. This honorary degree was presented at the school’s undergraduate commencement on May 21, 2011.

“I am honored by this degree from Bryant University, one of Rhode Island’s great institutions” In its citation, the University commended Ms. Alemany as someone “who in both her personal and professional life exemplifies what being excellent in the world of commerce means. At a time when many financial institutions and their leaders have failed to merit public scrutiny and approval, you make it a point to be worthy of the trust of your customers, employees, and your leadership team.
“Those who are familiar with you say that even before the financial crisis you were thought of as an authentic banker—a person with an unending commitment to excellence and accountability. To this end, you re-launched the corporate campaign, GOOD BANKING IS GOOD CITIZENSHIP, reminding us all why banks exist and the critical role they play in fostering growth and prosperity, that in a most essential way they are meant to serve the communities where they exist. Indeed, good citizenship for you is embedded not just in the name of your company, you see to it that it is rooted in your daily corporate culture.”

“I am honored by this degree from Bryant University, one of Rhode Island’s great institutions,” Ellen Alemany said. “This is a special time for the Class of 2011 and I was proud to be a part of Commencement as this year’s graduates prepared to leave Smithfield for the careers and the life journey for which Bryant has prepared them so well.”

Strangely enough, the honorary award said not word one about the fact that Ms. Alemany was part of the group who presided over one of the UK’s great Bank collapses, albeit as head of an American subsidiary. But bygones are bygones – save when you are caught after a riot with a bagful of cigs. Then it is six months for you, and eviction from public housing.

Perhaps our Bryant University friends are merciful Christians of the type that can overlook women without bags of cigs and alcohol, but stuff up the bungus with stock and shares. Let's roll the tape back to distant 2008, when this happened:

“No comment at the weekend from ROYAL Bank of Scotland officials on reports that
its American subsidiary Citizens Financial Group was under investigation by the US regulator for deleting e-mail records vital to an investigation into the mis-selling of financial products to the elderly.

Two New England newspapers reported last week that the Securities and Exchange Commission (SEC) was involved in an investigation by the Massachusetts state regulator for the alleged "unethical and dishonest conduct" in selling variable annuities.

These are tax-deferred investments that provide periodic payments to investors. They are considered inappropriate for elderly investors as their value rises or falls with the underlying investments, usually stock or bond mutual funds. Gaining access to the fund carries a hefty surcharge.

Citizens chairman Larry Fish, who earned £2.3 million last year and whose multi-million dollar "secret" bonus scheme was attacked at the RBS annual meeting in Edinburgh in April, has defended Citizens Financial as "an ethical entity", but has refused to comment on the details of the state investigation, or whether the SEC was involved.

Massachusetts secretary of state William Galvin accused the bank of not co-operating with the inquiry.

The Massachusetts Securities Division, which regulates banks in neighbouring Rhode Island, where Citizens Financial is based, lodged a complaint against its brokerage arm, accusing it of failing to preserve e-mail crucial to the variable annuities inquiry.

The complaint said Citizens "failed to preserve e-mail communications related to its business as a broker-dealer, despite having an affirmative obligation to do so". The lost e-mail has "substantially and severely impeded" the investigation into the sales of variable annuity investments to elderly customers, Galvin's office said.

It had filed an earlier complaint in February, accusing Citizens of violating securities laws in connection with variable annuity sales.”

I think it all comes down to weight, doanit? For our governors, the weight of deleted emails (zero!) must be balanced against a bag of looted stimulants (which our lootress can barely carry!). Thus, off to the clink with the one, and off to the honorary degree ceremony with the other. And thus the wheels of justice grind, and the grinders simply hope never to be caught under them. Build those gated communities high! Anyone who, in fact, advocates that the grinders feel a bit of justice gets kicked straight off Facebook and five years in a cell for em!

The plutocratic riot has been televised. Nobody cared. It will, of course, destroy your lifestyle and your children's, but don’t get mad at our gentle kleptocrats! For Look! A vicious looter in a hoodie!

1 comment:

p said...

This one made me laugh too: