THIEVES STEAL BRONZE STARS FROM VETERAN'S GRAVES

     Mpls. StarTribune - A cemetery in Isanti County, Minnesota has been raided by thieves removing 5-pointed bronze stars, with a holder on back to display an American flag, from graves of veterans.  The Commissioner of Minnesota's Department of Veteran's Affairs Larry Shellito has made it one of his priorities for the State agency to have  a 2-year supply of these special bronze stars to "accommodate the 10,000 Minnesota veterans who die each year". They cost $ 30,00 each but the metal in them is worth much less.

DENNY HECKER DEFIES PRISON RULES

     StarTribune - Ex-car dealer Denny Hecker has been moved to a 5th prison in 4 months for defying certain prison cell phone rules.  Such  repeated moves is termed "diesel therapy" by the "trade".  Mr. Hecker is serving 10 years for fraud.  He owned or shared ownership in 26 car dealerships but declared bankruptcy owing debts of $767 million.
 A bankruptcy auction of assets included cars and boats and 71 fancy watches, one of which was a $24,100 Rolex.  His car advertisements often featured his picture. 

     He married his girl friend by cell phone while both were in separate prisons but a judge declared the marriage null and void because of the phone ceremony.

CHESAPEAKE ENERGY CUTS COMPENSATIONS

      AP-Criticism of certain payments have led Chesapeake Energy to consult with an outside compensation advisor.  As a result, the company will cut the pay of its chief executive officer, name an outsider to the seat of Chairman of the Board, eliminate the personal use of company aircraft and ban personal company loans to executives.  From now on, outside directors will be paid $100.000 in cash and $250,000 in company common stock per year.  The company claims these changes bring outside director compensation to be more similar to their corporate peers.  A good move!

ND FLOWS PAST AK AS US #2 OIL PRODUCER

     WSJ - In 2008, North Dakota produced 144,000 barrels of oil daily, ranked 8th in US.  In March, 2012, ND pumped 575,490 bbls daily to take the # 2 spot ahead of Alaska (pumped 567,480 bbls daily. Texas pumped 1,700,000 bbls daily in February, 2012 for the # 1 spot). Oil production has skyrocketed in ND since hydraulic fracturing or fracking has tapped geologic shale for gas and oil.  

ND has its Bakken shale which is triggering budget balances ahead of plan, motel rooms reserved years ahead, highways clogged with trucks and even restaurants with long lines of waiting customers.  Happy days for the roughnecks but beware of boom days.

SHAREHOLDERS OF JPMORGAN HAD THEIR CHANCE

     WSJ-NYT - The annual shareholders meeting for J P Morgan/Chase was held in Tampa, Florida on Monday, May  14, 2012.  The meeting couldn't occur at a worse time after the disclosure of horrific trading loss the previous Thursday.  Two majors items appeared on the Agenda: (1) Should Jamie Dimon remain as CEO, and (2) If he remains Chief Executive Officer , should he continue as Chairman of the Board. Both issues were eventually voted in the affirmative.  It seemed shareholders had their chance to demote or even oust Mr. Dimon from one or both of those most important corporate positions.  Many shareholders felt strongly that Mr. Dimon  should be replaced, especially after the "London Whale" fiasco of losing more than $2 billion -  and maybe as much as $4 billion - in crazy (it turned out) investments in derivatives called credit default swaps. Why didn't the shareholders vote negatively and "toss the rascals out"?  As a practical matter, votes at shareholder's meetings  don't carry the weight you might think  they should. A ton - and a  majority - of votes were probably declared by proxy BEFORE  the meeting, before the London Whale Affair was made public on May 10, 2012,  Mr. Dimon, apparently in late April, 2012, was advised of a potential major problem in the London investment office. In the ensuing 2 weeks or so,  Mr. Dimon was trying to modify or at least calm a brewing storm. He couldn't as the trade values had  started to skid,  JPM was forced to come up with gobs of cash and tried to find some sort of buyers for all or at least part of their positions, to no avail. The point is - it's very doubtful many shareholders knew the enormity of the problem - Friday, before the Monday  shareholders' meeting, 
   
JPM announced a FURTHER LOSS OF  $ 200,000,000 that single day and there were few if any buyers for their positions.

The shareholders' proxy votes were before the fact - before the announced losses.  Mr. Dimon's jobs as CEO and Board Chairman were judged before the roof fell partly in.  

DIMON SURVIVES JPM/CHASE ANNUAL MEETING

     WSJ/NYT - On Monday, 5/14/12, the Annual Shareholders' Meeting of J P Morgan/Chase was held in Tampa, Florida. This only four days after announcing the fiasco of losing a plus $2 Billion in investment/trading losses in London mainly by the so-called  "London  Whale", Bruno Michel Iksil . Shareholders at the Tampa meeting, in person or by proxy, represented majority affirmative totals to (1) retain Mr. Jamie Dimon as CEO and (2) retain Mr. Dimon on the company's Board of Directors where he is Chairman. These two actions swim against the corporate tide of gradually separating the CEO/Board Chairman tie held by the same person. 

 

     Mr. Dimon was contrite in his speech to the shareholders, taking full blame for London losses because "the buck stops with me".  It was disclosed on Friday, 5/11/2012, a further $200,000,000 (that's million) was lost on that day, large losses were still occurring and total losses could reach a total of $4 Billion.  It should be noted the total votes cast on Monday, 5/14  could include proxies exercised BEFORE  the previous Thursday's announcement of London losses.  Proxies could be recalled in person at the meeting.  Mr. Dimon is not off the hook but he has a fine reputation to ride upon.

MR.JAMIIE DIMON LOSES HIS LUSTER

     May 13, 2012 - A startling trading loss of $2 BILLION dollars (and could get worse) by J. P. Morgan/Chase was exposed to the world today.  Mr, Bruno Iksil, a JPMorgan trader in London, has been called the "London Whale" for piling up huge risks in credit default swaps, a form of derivatives, which threatened to upend the entire derivative market. CEO Jamie Dimon knew of the terrible overall risk on April 13, 2012, and dismissed it by labeling it "a tempest in a teapot".  

 

     NYT's writer Jason Zweig suggests the principle of famous physicist  Richard Feynman be applied.  The principle is clear: "You must not fool yourself - and you are the  easiest person to fool".  A handy investment reminder is the biggest dangers in finance is self-deception.   Columnist Joe Nocera has stated our financial system has lost both its moorings and its ethical compass.  During the last half of April and early May, JPMorgan was LOSING $200 million per day.  Mr. Dimon has now admitted the bank's strategy was flawed, complex, poorly reviewed, poorly executed, and poorly monitored. Ouch!!! it's enough to sink the London Whale.   

NEW YORK CITY LAW FIRM COLLAPSES

     May 13, 2012 - WSJ - NYT  -  The old and huge New York law firm of Dewey and LeBoeuf seems to be calling it quits because of over-powering debts.  Partners in droves have packed up and left.  Partners were required to put money into the firm when they joined - and that  investment is gone.  Even worse, pensions may be wiped out or severely reduced and money paid to them in the past might be reclaimed.  The firm with 100-year roots had 2,000 world-wide employees. 

 

     Former Vice-chairman of Dewey, Morton A. Pierce, is indicative of the hurt that will be suffered: his contract calls for $8 million annually and he says the company owes him $61 million. His "Boeuf" (beef) is he may never be paid what he  is owed.

CHESAPEAKE ENERGY REBUKES CEO/CHAIRMAN

     5/8/12- WSJ - The Greedsters Sequels covered Mr. Aubrey Mclendon being booted out as Chairman of the Chesapeake Energy Corp on May 5, 2012.   While CEO and Chairman of the Board, he amassed an amazing array of personal assets during his long tenure of plus 20 years. He was involved with a hedge fund, two venture-capital companies, owned part of the Oklahoma City Thunder, owned a portion of a TV station, restaurants, a cattle ranch, cancer-treatment center, and outlets vending soft drinks. A variegated businessman !!!

BANK OF AMERICA SHAREHOLDERS IRATE

    May 10, 2012 - WSJ - B&A common stock was down 58% in 2011. Of course the shareholders were  unhappy but even so, at the annual stockholder's meeting on 5/10/12, 92% of the shareholders approved the CEO's 2011 compensation of about  $7 million including a base salary of $950,000 and $6 million in

restricted stock. 

 

     A demonstration at the Charlotte, N. C. shareholder's meeting "staged a boxing match dubbed 'Bank of America vs America'" and bounced a large ball around labeled "debt".   

 

     Bank of America is widely referenced  in "The Greedsters" in 24 separate pages.

REVERSE GREED FOR FREDDIE MAC

     NYT - The Federal Government controls the mortgage giant Freddie Mac after shoveling $13 billion into the company in 2010 to rescue it from default. Then, in 2011, Uncle Sam  forked over an additional $ 7.6 billion.  Now, on May 4, 2012, Freddie Mac has requested $19 million more for the first quarter of 2012 ( loss for the first quarter totaled $1.2 billion).  All of this can be labeled "reverse greed".

MANY COLLECTORS ARE GREEDY!!

     Denver  Post  - Heritage AuctIions announced an anonymous buyer paid $418,250.00 on May  4, 2012 for the baseball that rolled through the legs of Boston Red Sox first baseman, Bill Buckner, that enabled the New York Mets to win the game and eventually the World Series in 1986.  It proves there is a serious buyer for anything.  You wonder how many baseballs Mr. Buckner has collected. 

ONE OF WORLD'S RICHEST MEN GETS DEMOTED

      WSJ - 5/3/2012 Founder, Board Chairman, and CEO Mr. Aubrey Mclendon of Chesapeake Energy Corporation was dealt a blow by his Board of Directors when they voted to  replace him as Board Chairman without an immediate replacement. As a leader in the recent gas-drilling frenzy and fracking of shale formations to release trapped gas and oil, Mr. McClendon had a neat deal with the company that allowed him to purchase a 2 1/2% share in every well drilled by the company.  That right was terminated when he stepped down on Tuesday, May 1 as Chairman.  Talk about sweet-heart deals: In the first full year of his right to buy into new wells, Chesapeake drilled 19 wells. In 2011, they drilled nearly 1,700 wells, and Mr. McClendon's personal cost of the 2 1/2% of each well was $457.2 million.  He borrowed money from private sources -  as well as from Chesapeake without the Board being fully informed.  It's another example of misuse of a financial position when being CEO and Board Chairman.  More and more  companies are finally realizing the financial risk of the dual voting positions of CEO and Board Chairman. being the same person.

FORMER NY STATE SENATOR SENTENCED TO 7 YEARS IN PRISON

     A former New York State Senator, Carl Kruger, pled guilty before Federal District Court Judge Jed Rakof to accepting $1 million in bribes.  Despite pleas for a lighter sentence, the Judge said, " once corruption takes hold, democracy becomes a charade". A co-defendant, Dr. Michael Turano, received a 2 year sentence for lesser bribes but should go to prison "because he did help to corrupt our government".  Judge Rakof is a very active Judge and has been deeply involved in important inside trading cases.