Tuesday, February 3, 2009

CEO Blunders

One of the biggest risks to a corporation's future comes from blunders of the CEO and the Board of Directors in making large acquisitions near the top of the market. We can see this playing out in the RTP FUBAR. Rio Tinto overpayed for aluminum maker Alcan, taking on much debt. And RTP's CEO foolishly turned down BHP's merger offer.

So now RTP has too much debt in a weak market for it's products. What doe sit intend to do ?

"The Australian reports the co and Chinalco (ACH) are setting up a mammoth $20 billion deal that would give China stakes in Australia's largest iron ore operations and key aluminium projects, while solving Rio's debt problems in one fell swoop. As part of the deal, it is understood Chinalco would increase its stake in the dual-listed miner to between 15 and 20% through the issue of more than $5 billion of convertible notes. " [From Briefing.com online]

Good job ... buying high, selling low. That's pretty normal for corporate CEOs. They do it with stock buybacks all the time, too.

The corporate boards of directors really need to be restructured to give shareholders real power, not the current rubber-stamp variety. That could solve a lot of problems that are now appearing: over paid executives, excessive risk, etc.


Credit markets are really improving a lot - I've noticed a large number of new issues that were well-subscribed, even in junk bonds.

Word of the Day

"Besotted" - adjective [$10]
Besotted means 1. infatuated; 2. foolish, confused; 3. intoxicated, stupefied.

"Besot" - verb, transitive [$100]
Besot means 1. to intoxicate or stupefy with drink; 2. to make stupid or foolish (a mind besotted with fear and superstitions.); 3. to infatuate, obsess (He is besotted by her youth and beauty.)

Sentence: Was it drink that besotted the mind of Lyndon ... oops George W. Bush as he adopted that foolish post-invasion, "Rodney King" Iraq pacification strategy? Or was he simply a weak mind under the influence of McNamara .. ooops Rumsfeld ?

Le Mot du Jour

"Sot / Sotte" - adjective (m/f) and noun (m/f)
Sot means (adjective) silly, foolish, stupid; (noun) fool, idiot. Sotte is the feminine form for both the adjective and the noun.
La Phrase: La crise financière révèle beaucoup de sottes conduites des banques.
English Sentence: The financial crisis is revealing a lot of foolish behaviors of the banks.

[There are other French words for "foolish" or "stupid", such as bête and stupide. I wasn't sure about the position of the adjective, but the dictionary example for "sot" placed it before the noun.]


Bud said...

good post regarding ceo's Bman.......don't forget about the over-sized egoes

'hogs at the trough'

Bud said...

first.....the pitching fund to Madoff

now......the hitting fund gone too........Citi bailing on the Mets.....oh well

PS......I've always thought it's outrageous how these corporations would waste millions and millions of dollars on stadium rights........also part of the CEO's oversized egoes.....they spend 100 of millions of the shareholders money .....so that they can walk around and meet the ballplayers and entertain their friends in luxury boxes

'hogs at the trough'

Bud said...

i love that Bman saying hogs at the trough......any chance i get ......i gonna use it

Bman you grow up on a farm ???

Bunkerman said...

yes, those naming rights are a complete waste of money.

Bunkerman said...

use it.

I grew up in a small town in a rural area. My father had some cattle ranching background as a boy and did some large animal veternary work, so I heard lots of farm sayings. A cousin did raise hogs. He had lots of pithy sayings, like why worry about how the food looks on your plate as "it's all going to the same place".

Bud said...

good news Bman

charles nenner calling for 1000 pt S and p rally starting in a few days

i suggest you act like a beefer and dump the Obama fund in that pop

mfl59 said...

uhhhh....1000 s&p pts....or a rally to 1000?

what does joe torre jr think?

Bud said...

torre jr thinks he's an arrogant ass


mfl59 said...

Erin Burnett must read this blog...

I believe she just used the word "ameliorate" ($10)

Bunkerman said...


mern said...

ratdog on the beach in negril jamaica! as sick as that sounds, u just had to be there.

and here is a new one. the resort invited the band back for next yr and everything is booked.

i dont know but i think jamaica is out of red stripe and a few other things.

our resort literally ran out of beer the 3rd nite!


first nite bobby who wasnt even supposed to play, came out for 3 songs. maggies farm(dylan), baby blue (dylan), aiko aiko. after aiko aiko he basically fell off the stage, SPLAT. and after staying underneath the band for 5 nites, i can say two things

1. no way r those dead shows worth seeing. all about money. bob wants nothing to do with it, but the drummers r begging him. he cant stand phil or phils wife and bobby is still bob. a partying rock star.

2. bob still partys!

also think i maybe shud have worn a rubber with this hottie i banged the first nite. she had a lot of tats and was a complete freak. she had a tat on her neck that said "enjoy the ride"

that was the first nite.

i saw her with a different dude everynight.

y r my balls flaking?????????

Frosty said...

mini heater...soak it in pickle juice...rub ben-gay on it then put a clove of garlic in yer aazzzz...a fat Al recipe, works.

Welcome home Mern, we missed you.

RGLD, thanks jim

mfl59 said...

yes a condom may have seemed like a good idea in that situation mern....lol.....

live it up sir....

Bunkerman said...

hmmm, Mern I guess spent a lot of time in Jamaica besotted.

Frosty said...

"I once drank a case of beer in one sitting"...certain the maxi heater, huge sack and all...ended up in a ditch or two along the way.

Spin-em said...

"i saw her with a different dude everynight."


well at least you have your standards....ya kill me mern....ya god dayum kill me

Spin-em said...

A cousin did raise hogs. He had lots of pithy sayings, like why worry about how the food looks on your plate as "it's all going to the same place".

your cuz talkin about stocks or food on the plate bunk?..lol

Bunkerman said...

uhhhhhhhh ... a low blow.

The Gerry Cooney Special.


Bunkerman said...

By the way, Mern, in French, a condom is "un préservatif" - naturally it's a masculine word.


Spin-em said...

The Gerry Cooney Special.


nononono..stocks in general sir..lol

Bunkerman said...

lol, I remember seeing him whacking Larry Holmes soooo hard in the jewels. More than once, too.

mfl59 said...

I think Cooney is Spin's favorite fighter...except for Peter McNeeley of course...

Bunkerman said...

lmao .. McNeeley

A real canvas-back.

Bud said...

joe 'douchebag' torre on with francesa today at 4

i'll try to control myself spin..........but i can't promise

some of my comments may 'andrew golota' you

Spin-em said...

15 YARDS....get a playbook with more than one play..zzzzzzzzzzzzz

Bud said...


true...........the same offense gets boring

PS....here's one play that i never get tired off ........find that jerbel bob ???

mern said...

that was a nice way to meet my roomate and his girlfriend.

they got there at midnite, walked in the room and there i am swinging from the chandler, naked.

the hottie blond was in the bed, naked.

they didnt come back for 2 hours.

in hindsight if i cud just have remembered her name i cud have had her maybe 2 nites.

oh then there was the 30 yr old, hottie, that was all over me until she disappeared, then 5 dudes approached me and about kicked my azz.

like i was supposed to know she had a boyfriend in NC.

Spin-em said...