Normally, I do not pay too much attention to those annoying forwarded emails one gets in their inboxes. Most times, I delete them without much thought. This one I decided to read on... (especially in light of news like this).
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A Japanese company and an American company decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.
On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, whi le the American team had 8 people steering and 1 person rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the one person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and o ther equipment, extra vacation days for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the senior executives as bonuses and the next year's racing team was out-sourced to India.
Note: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages. Toyota has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results: Toyota makes 4 billion in profits while Ford racked up 9 billion in losses.
Showing posts with label greed. Show all posts
Showing posts with label greed. Show all posts
Tuesday, February 12, 2008
Wednesday, November 07, 2007
A story and some reality
Consider this story:
It is a sunny day and the streets are strangely empty. A man walks along a road and suddenly chances upon a pot of gold shimmering in the distance. He breaks into a run and manages to grab onto the pot and is slowly beginning to explore the contents inside when the ground opens up beneath him and he finds himself free falling down a deep dark hole. He seems to pass out in between and is shaken back into consciousness when a strange unbearable stench in the hole assails his nostrils. He looks around and finds himself neck deep in a cesspool of shit. The pot of gold seems to have disappeared in the muck around him and he presently begins to scream for help. A while later he sees some men in suits come by, peer cautiously into the hole and mutter excitedly to one another. The man in the hole seems to catch the words 'Hey, here is another one' and is overjoyed that someone actually stopped to help. Very soon they extend what looks like two separate lifelines to him and now it obviously looks like they are going to haul him out of there. His joy soon runs aground when he realizes that one of the lines held by the suits is being used for fishing in the cesspool to retrieve the pot of gold while the other is not a lifeline - it seems to be some kind of a battering ram that appears to be pushing against his head forcing his head into dirty brown waters swirling around him. The stench mixed with helplessness is pretty much unbearable and is what he ultimately remembers. Half an hour later the men in suits seem to have drowned the man, collected the pot of gold, declared victory and with a whoop of joy head down to the nearest bar for a celebratory round of drinks...
Consider this reality:
We all know about homeowners being disadvantaged and fooled into a false sense of security in owning their homes and paying their mortgages due to the dubious marketing that the mortgage companies had conjured. I talked about this multiple times before. We also know that as soon as the individual is not able to pay, the home automatically goes into foreclosure. A very trying process that sometimes snares the individual during the foreclosure process is the declaration of bankruptcy.
I read a report in the New York Times yesterday that talked about the companies who instigate foreclosure proceedings while simultaneously taking advantage of the distressed individual (who has not only lost their homes but also declared bankruptcy). In other words, a new business model seems to be emerging – “profiting from foreclosures”. A study conducted by Dr. Katherine Porter of the University of Iowa records the following:
"In one example, Ms. Porter found that a lender had filed a claim stating that the borrower owed more than $1 million. But after the loan history was scrutinized, the balance turned out to be $60,000. And a judge in Louisiana is considering an award for sanctions against Wells Fargo in a case in which the bank assessed improper fees and charges that added more than $24,000 to a borrower’s loan".
"Late fees accounted for 11.5 percent of servicing revenues in 2006 at Ocwen Financial, a big servicing company. At Countrywide, $285 million came from late fees last year, up 20 percent from 2005. Late fees accounted for 7.5 percent of Countrywide’s servicing revenue last year".
Predatory financing is one, but capitalistic cannibalism seems to rule the roost.
"The point is, ladies and gentlemen, that greed—for lack of a better word—is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms—greed for life, for money, for love, knowledge—has marked the upward surge of mankind. And greed—you mark my words—will not only save Teldar Paper, but that other malfunctioning corporation called the USA". – Gordon Gekko in the movie Wall Street
References:
Misbehavior and Mistake in Bankruptcy Mortgage Claims - Dr. Kathleen Porter. (you could download the paper here)
The growing threat to middle class families - Elizabeth Warren
Dr. Katherine Porter’s blog: http://www.creditslips.org/
David Smith, ‘False Peace Spectre’, bronze and steel painted blue, 1945, 12” X 27” X 10”
It is a sunny day and the streets are strangely empty. A man walks along a road and suddenly chances upon a pot of gold shimmering in the distance. He breaks into a run and manages to grab onto the pot and is slowly beginning to explore the contents inside when the ground opens up beneath him and he finds himself free falling down a deep dark hole. He seems to pass out in between and is shaken back into consciousness when a strange unbearable stench in the hole assails his nostrils. He looks around and finds himself neck deep in a cesspool of shit. The pot of gold seems to have disappeared in the muck around him and he presently begins to scream for help. A while later he sees some men in suits come by, peer cautiously into the hole and mutter excitedly to one another. The man in the hole seems to catch the words 'Hey, here is another one' and is overjoyed that someone actually stopped to help. Very soon they extend what looks like two separate lifelines to him and now it obviously looks like they are going to haul him out of there. His joy soon runs aground when he realizes that one of the lines held by the suits is being used for fishing in the cesspool to retrieve the pot of gold while the other is not a lifeline - it seems to be some kind of a battering ram that appears to be pushing against his head forcing his head into dirty brown waters swirling around him. The stench mixed with helplessness is pretty much unbearable and is what he ultimately remembers. Half an hour later the men in suits seem to have drowned the man, collected the pot of gold, declared victory and with a whoop of joy head down to the nearest bar for a celebratory round of drinks...
Consider this reality:
We all know about homeowners being disadvantaged and fooled into a false sense of security in owning their homes and paying their mortgages due to the dubious marketing that the mortgage companies had conjured. I talked about this multiple times before. We also know that as soon as the individual is not able to pay, the home automatically goes into foreclosure. A very trying process that sometimes snares the individual during the foreclosure process is the declaration of bankruptcy.
I read a report in the New York Times yesterday that talked about the companies who instigate foreclosure proceedings while simultaneously taking advantage of the distressed individual (who has not only lost their homes but also declared bankruptcy). In other words, a new business model seems to be emerging – “profiting from foreclosures”. A study conducted by Dr. Katherine Porter of the University of Iowa records the following:
"In one example, Ms. Porter found that a lender had filed a claim stating that the borrower owed more than $1 million. But after the loan history was scrutinized, the balance turned out to be $60,000. And a judge in Louisiana is considering an award for sanctions against Wells Fargo in a case in which the bank assessed improper fees and charges that added more than $24,000 to a borrower’s loan".
"Late fees accounted for 11.5 percent of servicing revenues in 2006 at Ocwen Financial, a big servicing company. At Countrywide, $285 million came from late fees last year, up 20 percent from 2005. Late fees accounted for 7.5 percent of Countrywide’s servicing revenue last year".
Predatory financing is one, but capitalistic cannibalism seems to rule the roost.
"The point is, ladies and gentlemen, that greed—for lack of a better word—is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms—greed for life, for money, for love, knowledge—has marked the upward surge of mankind. And greed—you mark my words—will not only save Teldar Paper, but that other malfunctioning corporation called the USA". – Gordon Gekko in the movie Wall Street
References:
Misbehavior and Mistake in Bankruptcy Mortgage Claims - Dr. Kathleen Porter. (you could download the paper here)
The growing threat to middle class families - Elizabeth Warren
Dr. Katherine Porter’s blog: http://www.creditslips.org/
David Smith, ‘False Peace Spectre’, bronze and steel painted blue, 1945, 12” X 27” X 10”
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