I am getting real tired of all the articles and blog posts bitching about what banks are doing with TARP money. Yes, it is taxpayer money. Yes, banks have shown themselves to be a bit irresponsible with money (which is a lousy trait for a bank). But the level of suspicion around what banks are doing has reached the ridiculous.
I’m going to use Wells Fargo as an example, over the past few years, Wells has been quite conservative and responsible in it’s lending, which is why it is in a position to buy Wachovia and take on some risk. Wells has been, all in all, quite careful, calculated and well run.
In the current economic conditions, companies need to encourage good employees, maintain motivation as workers are asked to do more with less. So I’m frustrated when the media explodes over things like Wells’ employee appreciation event in Vegas. And while the response that the event is “paid from profits, not government funds” is just a matter of accounting, there is nothing wrong with rewarding great employees - especially when times are tough.
And here is another one: Wells Fargo CEO, John Stumpf Still Waisting Taxpayer Dollars (ignore the fact that it should be “wasting” which would be poorly spent dollars rather than “waisting” which I can only assume would be similar to hula-hooping) UPDATE: the grammar was corrected. Why shouldn’t the CEO of Wells communicate what the bank is doing through mass media? Should we all be left to question what is happening with those TARP dollars and the Wachovia acquisition? Remember, Twitter and blogs are communication mechanisms that have not reached the masses yet, and a NYT advertisement is much cheaper than a Super Bowl commercial (or any TV commercial).
Look, the point is that we should be keeping an eye on the organization that receive federal (i.e. taxpayer) funds - but we should focus on the things that are actually important - a few grand in adverts, or even a few million in employee events are not bad - in fact, they are probably good for the health of the organization. Now, if a bank used federal funds to purchase more questionable mortgage backed securities, or futures on Beckham’s future (ha ha), then we should get excited. But as long as the banks are executing on a sound strategy, they should use the federal funds in the method their leadership sees most efficient. I realize we are all a little suspect of the wisdom of the leadership and judgment of of US banks, but we shouldn’t go too far in our distrust and get petty.
So many of the examples coming out in the media and blogs look like a parent scolding a child for spending $2 of allowance on gum while $8 went in the piggy bank. Look at the big picture folks, how can a national bank succeed in these trying times if the best employees (those who are most mobile in a difficult economic climate) aren’t rewarded? How can the public understand what the bank is doing if mass media is utilized? I can say first hand that banks (and credit unions) require a good business case before spending any money. Sometimes the business case is flawed. We have all made poor decisions based on the best information we have. Let’s get over the pettiness of banks spending a few million dollars on things good for the organization and focus on where the hundreds of millions/billions of dollars are going.
This is not to absolve the industry of poor decisions made - but those poor decisions were made based on the prevailing wisdom at the time, poor assumptions and rigorous models incorporating those assumptions. Remember, the business of banks is money. We have all made poor decisions based on the information we are presented with, our hindsight is 20/20. Over analyzing every little expenditure is not good for the banks, the consumer or the economy.
For no particular reason, I remembered something out of my childhood the other day:
When visiting a friend, I was introduces to the Monopoly game. I was so fascinated by it that I had to have it. Since the US-made game or anything of its kind was not available in USSR, I asked to borrow the game and then…
I proceeded to make a complete copy by hand. Hand-drawn currency, playing cards, the game board, the full works. Sounds completely ridiculous and OCD? Not for our family where mom routinely made my clothes, I crocheted my berets and purses, and once mom was able to take an old leather bag and make me a fabulous little back-pack. In fact, some of the pillow cases that I had sown together years ago (as well as couple of crocheted articles) made their way across the ocean with me and are alive and well right now.
One thing to keep in mind: this seemingly obvious shortage of material possessions didn’t really register with me as a cause of unhappiness. On the opposite, making those things by myself or with my mom are some of the fondest childhood memories.
(yay, we’re back despite the WordPress voodoo! Thanks to the hubby who’s a fearless internet master!)
Last week was a good week and a bad week. Yes, we had a historic presidential victory that should have made me happier than it really did. Unfortunately, at the same time as Barack Obama was gaining speed cross the electoral college, Prop 8 was losing in California. A prop that defines a marriage as a union between one man and one woman. A prop that retroactively invalidates 16,000 marriages registered in the state of California since June. A prop that cuts basic human right to the significant minority in our country. A prop that commanded the largest ever donation amount for a state election.
While I am happy for the president elect, he’s yet to prove that his inspiring rethorics is going to translate into specific actions. The passing of Prop 8 had very real, sizable effect on the lives of people in the state. I am sad and angered at the rejoicing of its proponents.
They say they’re protecting traditional marriage. Newsbreak: 200 years ago, slavery was traditional and a lot of otherwise intelligent and kind people believed it was acceptible.
“In the late 1700s, a shift from left to right took place in countries such as the United States, when teamsters started using large freight wagons pulled by several pairs of horses. The wagons had no driver’s seat, so a postilion sat on the left rear horse and held his whip in his right hand. Seated on the left, the driver naturally preferred that other wagons pass him on the left so that he could be sure to keep clear of the wheels of oncoming wagons. He did that by driving on the right side of the road.[citation needed] The British, however, kept to the left. They had smaller wagons, and the driver sat on the wagon, usually on the right side of the front seat. From there he could use his long whip in his right hand without entangling it in the cargo behind him. In that position, on the right side of the wagon, the driver could judge the safety margin of overtaking traffic by keeping to the left side of the road.”
