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So Stan O'Neal tanks Merrill for $8 BILLION & gets rewarded w/ $160 MILLION.........

One of my old managers had the answer to your consternation on plaque inside her office:

"You don't get what you deserve, you get what you negotiate"

Everybody involved agreed to the deal and signed the contract.

He apparently got the better end of the deal.

 
Originally posted by: ScottMac

He apparently got the better end of the deal.
Click to expand...


Meh............I dunno............sounds like a lotta work, ya' know............counting $160 million! Who's got that kinda' time?? 😉
 
It explains why CEO's are so highly paid. Management genius of that caliber is rare. Its simple supply and demand. And here I only bought some Elvis Presley used toilet paper worth more than O'Neil.

No wonder US business is tanking. Remind me never to buy any of their stocks. And fire the board of directors ASAP.
 
Originally posted by: Donny Baker
Originally posted by: techs
Thank God for the inheritence tax!
Click to expand...

Yes. The gov't deserves that money! How dare he pass on that money how he likes!

:roll:
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Ya - let's get rid of ALL taxes now! No one should have to pay a cent for the costs of society!

If we DO have to tax, let's tax everyone else before we ask for any money from the estates of the most wealthy.
 
"The $160 million estimate includes accumulated equity, retirement benefits and deferred compensation."

He's worked there 21 years. 5 years as CEO.
 
Has there been a single firm that's made a profit off of this sub-prime mess? No. O'Neal probably used it as an excuse to leave.
 
Originally posted by: Lothar
Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.
Click to expand...

Goldman Sachs posted a 79% profit increase.
Click to expand...

Yep, Berkshire Hathaway has a mortgage unit & made a nice profit.

One of the slicker moves I've heard recently is to buy some shares of Goldman a few weeks before they report their quarterly earnings, sell after they report for a nice profit, it's like shooting fish in a barrel.
 
Originally posted by: Lothar
Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.
Click to expand...

Goldman Sachs posted a 79% profit increase.
Click to expand...

I said regarding the sub-prime mess. Goldman made money off of it? News to me.
 
Originally posted by: Narmer
Originally posted by: Lothar
Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.
Click to expand...

Goldman Sachs posted a 79% profit increase.
Click to expand...

I said regarding the sub-prime mess. Goldman made money off of it? News to me.
Click to expand...

They made money off the sub-prime mess by taking short positions.
There was nothing stopping Merrill Lynch from doing the same.
 
Originally posted by: Pliablemoose
Originally posted by: Lothar
Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.
Click to expand...

Goldman Sachs posted a 79% profit increase.
Click to expand...

Yep, Berkshire Hathaway has a mortgage unit & made a nice profit.

One of the slicker moves I've heard recently is to buy some shares of Goldman a few weeks before they report their quarterly earnings, sell after they report for a nice profit, it's like shooting fish in a barrel.
Click to expand...

Been there, done that.
That kind of game is too risky and just not worth it.
 
Originally posted by: Lothar
Originally posted by: Narmer
Originally posted by: Lothar
Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.
Click to expand...

Goldman Sachs posted a 79% profit increase.
Click to expand...

I said regarding the sub-prime mess. Goldman made money off of it? News to me.
Click to expand...

They made money off the sub-prime mess by taking short positions.
There was nothing stopping Merrill Lynch from doing the same.
Click to expand...

Interesting. It's such a generic move (hedging your bets), I wonder why the others didn't do it as well. Everyone knew this shit was going to implode one way or another. The economist wrote about it as early as 2005.
 
Originally posted by: Narmer
Originally posted by: Lothar
Originally posted by: Narmer
Originally posted by: Lothar
Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.
Click to expand...

Goldman Sachs posted a 79% profit increase.
Click to expand...

I said regarding the sub-prime mess. Goldman made money off of it? News to me.
Click to expand...

They made money off the sub-prime mess by taking short positions.
There was nothing stopping Merrill Lynch from doing the same.
Click to expand...

Interesting. It's such a generic move (hedging your bets), I wonder why the others didn't do it as well. Everyone knew this shit was going to implode one way or another. The economist wrote about it as early as 2005.
Click to expand...

The amount of profit Merrill was making in CDO underwriting fees were too sweet a deal for them to pass up.
 
Originally posted by: Vonkhan
exit clause

/thread
Click to expand...

Not at all. the $160 million is comes from stock he already owns. Like most CEO's O'Neal was compensated primarily in Merrill stocks, options, etc. The following the from the article the OP linked to:

"I'd be surprised if they go beyond" what the CEO already is entitled to, said Russell Miller, managing director of Executive Compensation Advisors, a unit of executive recruiters Korn/Ferry International.

In other words, no severance package. The $160 million already belonged to him. If you don't like it join the socialist movement, that's how capitalism works.

Originally posted by: Narmer
Originally posted by: Lothar
Originally posted by: Narmer
Originally posted by: Lothar
Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.
Click to expand...

Goldman Sachs posted a 79% profit increase.
Click to expand...

I said regarding the sub-prime mess. Goldman made money off of it? News to me.
Click to expand...

They made money off the sub-prime mess by taking short positions.
There was nothing stopping Merrill Lynch from doing the same.
Click to expand...

Interesting. It's such a generic move (hedging your bets), I wonder why the others didn't do it as well. Everyone knew this shit was going to implode one way or another. The economist wrote about it as early as 2005.
Click to expand...

Merrill wasn't directly speculating on the debt, they were buying the loans from banks and repackaging them into securities to sell in the marketplace. As a broker/dealer, that's Merrill's primary business. The liquidity disappeared from the market long before the actual crash happened, so Merrill was left with a huge inventory of this debt which it could not get rid of in the market. Hence the write-off. Their mistake was a failure to properly analyze the risk inherent in their inventory.

I don't think you can take short positions on debt obligations. Maybe I'm wrong, but I've never heard of it before. What you can do is purchase a Credit-Default Swap, which is basically an insurance contract that a loan will not default. I would imagine that in the future, Merrill will be using these liberally.
 
Originally posted by: Lothar

The amount of profit Merrill was making in CDO underwriting fees were too sweet a deal for them to pass up.
Click to expand...

Exactly, they were making so much from the CDO's they got careless. As much as people are upset at Stan O'Neal, keep in mind that this is disastrous for him. He would have made far more than $160 million if this hadn't happened, and this is a huge black mark on his reputation.
 
Originally posted by: Lothar
Originally posted by: Narmer
Originally posted by: Lothar
Originally posted by: Narmer
Originally posted by: Lothar
Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.
Click to expand...

Goldman Sachs posted a 79% profit increase.
Click to expand...

I said regarding the sub-prime mess. Goldman made money off of it? News to me.
Click to expand...

They made money off the sub-prime mess by taking short positions.
There was nothing stopping Merrill Lynch from doing the same.
Click to expand...

Interesting. It's such a generic move (hedging your bets), I wonder why the others didn't do it as well. Everyone knew this shit was going to implode one way or another. The economist wrote about it as early as 2005.
Click to expand...

The amount of profit Merrill was making in CDO underwriting fees were too sweet a deal for them to pass up.
Click to expand...

Yes, but why couldn't they ask themselves the simple question of "why are we putting all our eggs in one basket?" A logical answer is "We shouldn't." A solution to that answer would be to hedge their bets, at the very least with options.
 
There's no such thing as an options contract on a CDO. And they didn't put "all their eggs in one basket", they were selling a lot of mortgage backed securities, but they were also still selling alot of equities and mutual funds.
 
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