The 500 True Believers,
Dodger the Dog,
And the Beantown Cabbie

The deal is, we've been told, that CEO pay is so high because demand for the 9-sigma talent of these Water Walking Wonders, so very beyond your and my shriveled imaginations, wildly exceeds supply when it comes to the 500 jobs as Fortune 500 CEOs. I contend that there are exactly 500 Guys (almost all guys, hence I can safely use the term) who believe that line of reasoning—namely the 500 CEOs of the F500 companies. (I guess I could also throw in the heads of the biggest search firms, who unearthed many of these so-far-beyond-the-pale dudes, which perhaps puts the total at 505 True Believers.)

The Inspiring Invincibles! Chuck Prince (Citigroup, formerly head of)! Stan O'Neal (Merrill Lynch, formerly head of)! Angelo Mozilo (Countrywide, formerly head of)! Tough cookies, each one. And yet, somehow, on their watches, The Three Geniuses allowed their firms, through grotesque negligence—maybe silliness or Theaters of the Absurd would be better words if the stakes weren't so high—to get into positions in which tens upon tens of BILLIONS of greenbacks had to be written off from their books of account. Dodger, my 5-year-old Aussie, could have done a better job. (He could have bitten anybody who tried to make a $500K loan to someone who had never had a job or paid a bill and signed his name with an "X"; and peed on the pants of any 22-year-old University of Chicago PhD who said, "With my clever algorithm I've designed what's called a 'derivative'—it'll make risk a thing of the past." Yes, had Dodger bitten and peed on schedule, the likes of Citigroup would be ten or twenty billion ahead of their current position.) But, since the demand is so strong for the 500 different-from-mere-vice-presidents- Monumental-Management-Marvels, and the supply is so short, The Three Geniuses, on the basis of "Upside Potential," were able to chalk up about a half BILLION buckaroos on their pay stubs over the last five years, while busily installing the tools necessary for Global Economic Meltdown. Well, I guess that means they're "excellent" at something. Isn't there some line about wool & eyes & pulling? (In most cases, their pay deals, especially the parts about "if you turn out to be an idiot, we'll pay you a king's ransom to clean out your desk," were effectively set before they set foot in the executive suite. Wow, I wanna piece of that action!)

Then, across the sea from our Miracle 'Merican Marvelous 500 uber-Managers (demand waaaay exceeds supply, remember), sits the chief of France's Société Générale, or SocGen. (How about "sock shareholders"?) Somehow or other, yup, "somehow or other," on his continuing watch, a 31-year-old trader with a penchant for math and a knack for writing code managed to evade "controls" and "sneak" $74 BILLION worth of exposure onto SocGen's balance sheet; it has taken an almost $10 BILLION loss to clean up the mess—for now. But in the future, the Big Boss, a/k/a "the genius," promises "tighter controls." (The saving grace here is that the laddie who scored the seventy-four bil is named Kerviel. I keep thinking "Evil Kerviel," after the late lamented Evil Knievel. Unfair! Evil Knievel had a far, far better sense of "risk assessment" than our superduperstar Banker Bigwigs—may I not be damned for in any way besmirching Mr Knievel's name and spirit.)

More on the topic of "genius," the short supply thereof: Big mergers and acquisitions, negotiated by Big People, have a pretty much guaranteed habit of Going South, destroying value, statistically, perhaps 80% of the time—give or take a bit, depends on whose research you read. But in that Rarified Air of the 500 Top Talents, ever-short-in-supply-because- they're-so-so-much-better-than-you-or-me-or-even-their- #2-in-command, it is clear (to the 500, that is) that through their Unique Genius (they can see Farther Ahead than you or me), they can move beyond others' mistakes and consummate marriages that make money. No worries. But then there was the headline, the most recent of the many of its kind, on 29 February as I recall, that reported Sprint's taking a $29.5 BILLION write-down following its Ingenious Acquisition (had to be, made by one of the 500 Horsemen—of the apocalypse?) of Nextel. Thirty BILLION later, we learn from the CEO that there will be "significant change" and that he intends to "improve execution." Dodger-the-dog could have told him that—smart dogs can attain a vocabulary of 200 or so understood words, and that's about 190 more than the "genius" who made the Sprint-Nextel deal. In fact Mr Big's vocabulary was but a single word, as far as I can make out, uttered over and over (and over) again: "Synergies, synergies, synergies, I smell synergies. My synergies in and of themselves are majestically synergistic." I suspect he said that when announcing the deal—c'mon, Tom, you know he said that without reading the transcript. Well, I smell something, but I will spare you because this is a family-friendly Blog. And while on the subject of odor, there's absolutely no need to go back in history two years (but I will, as I'm in that sort of mood at the moment) and remind one and all that, in pursuit of "synergy, synergy, synergistic synergy," the Fabled Bosses of DaimlerChrysler (one, Jürgen Schrempp, was considered Europe's Jack Welch!) managed, after their "merger of equals," to lose market cap at the rate of $10,000,000 per ... DAY ... for nine years.

Speaking of Mr Welch, his boy Bob Nardelli, given his GE birthright and thence Automatic Excellence, decided he belonged in the "Top One" in pay package ranks—his board demurred, demand didn't exceed supply quite that much. So Bob took his couple hundred mil "getoutttahere" "separation pay" packet from Home Depot right before the home improvement market tanked, and ran off to save Chrysler, post-demerger. (Wanna buy a bridge in Brooklyn ...) And while on the topic of high-profile, always Excellent GE alums: Airbus was a bunch of "big dream" idiots—delay after delay after delay in getting the A380 launched. (Launched it now is, and a helluva sight to see, as I did in Sydney about 10 days ago.) But with a former GE superduperstar in control, James McNerney, fresh from messing up 3M's innovation machine with an imagination-free six-sigma diet, Airbus rival Boeing's systems would be go. No worries. Genius in charge. Whoops. Boeing's Dreamliner, the 787, has, like a flash, or sinking rock is more like it, gone from almost fit-to-fly, not like the damn French-German machines that are now flying, to Nightmareliner, suffering delay after delay after delay after delay. (With further delays promised.) And then there was the one last week about Boeing losing the hundred bil or so Air Force tanker order—that one might be reversed, not by that old "GE [free market] magic," but by a bunch of irate Dobbsean (as in Lou) Congresspersons determined to put brakes on this "free trade crap."

Well, perhaps I should cry "uncle." Maybe those headhunters have got it right. I suspect the supply of guys capable of the likes of losing $10,000,000 per day, nine years running, while simultaneously giving sold-out lectures on "the DaimlerChrysler Way," is indeed pretty short.

Give me a break. These 500 "perfect fits," "unique beings" are doubtless pretty swell fellas, but they are also as mortal as you and me, and clearly less savvy about the Real World than the taxi driver who took me across Boston yesterday. "Stupid loans," he declared, unbidden, summing up the Trillion Dollar (or so) sub-prime mess in two words. Chuckie (Prince, recall), Angie (Mozilo) ... hear that? (And the cabbie didn't charge me the $100 million plus that Countrywide's Angie is scheduled to nick if and when Bank of America closes the deal to buy his company—the B of A, fresh from its own write-down, is, of course, pursuing "synergies, synergies, synergistic synergies.")

I shall say no more. For example, I shall not mention the billionaire next door, here at the bottom of Beacon Hill in Boston. Come on, Peter! (Lynch, Fidelity.) The gazillionnaire really needed free event tickets from the people whose portfolios he evaluated? (He and Fidelity were just fined for so doing.) I coulda directed him to a legit ticket broker, from SF, who's been taking good care of me for decades.

I am ... still ... a dyed-in-the-wool-capitalist-pig-free-trader. I don't want The Law to muzzle exec pay. But I would like common sense to prevail, or at least make the occasional appearance. The 500 Fortune 500 CEOs are no more flawless, genius, etc., than my dog Dodger, who, trust me, via his own sort of Excellence, can reverse the tide and part the waters by producing a fart that carries on the wind from Tinmouth VT all the way to Wall Street.

Dodger is my inspiration!
It's good to be back on the farm!
(Whoops, off to Johannesburg in a few hours!)