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The Biz Roundup March 15

The bonus this year is for your bodacious begging.

The payments to executives in A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. Last week, Treasury Secretary Timothy F. Geithner pressured A.I.G. to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance. . . .

The bonuses will be paid to executives at A.I.G.’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages.

The bonus plan covers 400 employees, and the bonuses range from as little as $1,000 to as much as $6.5 million. Seven executives at the financial products unit were entitled to receive more than $3 million in bonuses. . . .

“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury . . .”

The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken. The official noted that even a provision recently pushed through Congress by Senator Christopher J. Dodd, a Connecticut Democrat, had an exemption for such bonus agreements already in place.

(“Bonus Money at Troubled A.I.G. Draws Heavy Criticism,” New York Times, March 15) Okay, there are many 40-carat insights in just these quoted paragraphs to explain why AIG — and businesses like them — are so down in the dumps that even the dumps won’t have them. First, there’s that curious notion of “the best and the brightest,” which, in any normal world, would not include anyone who steered the boat into an iceberg. Second, there’s the unbreakable contracts that pretty much bind the company into multi-million dollar bonuses to the folks who, well, steered the boat into an iceberg. It’s the height of hubris to write compensation contracts that don’t account for failure. As in, you don’t get your bonus if your division loses billions of dollars! Of course, the final and most obvious insight: why are these guys still working for AIG? I have no problem with AIG giving out contracted bonuses to their employees. I have a problem with these clowns even being employees.


The stimulus bill stimulates the scammers.

Each of the sites proclaims that you can get information on hundreds of government grants, worth tens of thousands of dollars, for nominal shipping and handling fees. The disclosed fees range from $1 to $3. The sites have you pay that pittance with a credit card. . . .

One of the sites the FTC uncovered billed users a one-time fee of $99, plus almost $50 a month for an “online resource center.” It also automatically signed up users for a second membership that cost $30 a month, Harrington said. If you failed to follow complex cancellation procedures, you would pay more than $1,000 over the course of a year. . . .

One site, for example, said in its terms and conditions that users are charged $74.95 a month for access to a “help center” after a seven-day free trial. “No refunds will be given for failure to use the requested and/or provided services,” it said. The company’s terms revealed that after 14 days a second “membership” kicks in, to a “mentoring center,” which costs $29.95 more a month

(“Stimulus scams are flourishing on the Web,” Los Angeles Times, March 15) A key part of the “continuity scam” (go here to see a scammer pathetically trying to scam you into the continuity scam, a kind of meta-scam) is the “impossible cancellation.” You call to cancel the continuity and they dutifully feed you a confirmation number. If you’re like 99% of humanity, you fail to record the number or ditch it in an unfindable place. They don’t actually cancel the continuity, hoping you won’t catch it. A few months later you notice you’re still being charged and you call to complain. But you don’t have the confirmation number, so they pull the trick on you yet again. You can check out, but you can’t leave, as the Eagles say. The only way out is to cancel your card. So, take a good, deep breath of the common sense the good lord gave you. If it’s about easy money, the stimulus package, and wants your credit card information, it’s better to send the money to the widow of Sani Abacha who just sent you an email yesterday. You never get money for nothing. But you often get nothing for money.


This proves that people are desperate for entertainment. Any entertainment.

Walt Disney Co.’s “Race to Witch Mountain” raced to No. 1 at the weekend box office in the U.S. and Canada, bypassing expectations with $25 million in ticket sales.

The PG-rated sci-fi flick starring Dwayne Johnson as a cab driver with a pair of alien teenagers along for the ride topped the R-rated superhero epic “Watchmen,” which earned $18.1 million in its second week.

Mark Zoradi, president of Disney’s motion-picture group, said analysts had predicted that “Race to Witch Mountain,” director Andy Fickman’s re-imagination of the 1975 live-action film “Escape to Witch Mountain,” would fly away with $20 million or less. Now he expects this “Witch Mountain” to maintain a high orbit in theaters with kids on spring break.

(“‘Witch Mountain’ Races to Top Spot at Box Office,” Wall Street Journal, March 15) Putting aside the obvious jokes for now, the success of Witch Mountain (and the tanking of Watchmen) brilliantly show what I’ve been saying in this blog: in this economic downturn, there is a lot (I mean a lot) of money to be made in inexpensive family entertainment. Admissions are down almost 30% at Disneyland and Disneyworld (where funtainment will set a family back over five hundred smackers), but a Dwayne Johnson stinker surpasses box office projections by 30% in just the first three days! Get your thinking caps on: cheap family entertainment = big time opportunity. Now you make the equation work. (Or you can just hitch a ride on the continuity scam bandwagon or robbing little old ladies at ATMs.)

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