Just read this story over at TechCrunch. Though the gist of it is technically more about file sharing and the music industry, it reminded me of the old days of 1999-2001 when all the dot-com douche bags (myself included) would cram into SOMA bars and think they were the kings/queens of the world. I distinctly remember a confrontation when one group of folks from Start Up A was monopolizing bar space and a group from Start Up B were trying to order drinks. As expected a little pushing and shoving match ensued with the requisite "Do you know where we work?" and "We're gonna buy this place!" was thrown around. Basically, young knuckle heads with too much money and too few failures in their young careers to know any better. A scant year or two later and most of them probably were unemployed. Another conversation I overheard was where a guy was talking about jumping to another start up only 3 months after joining his current one. His friend was saying "Do it man! That place is gonna take off! Take less money and get more equity. It's all about the equity man!" It was definitely a sign of the times.
As we have gone through one dot com implosion and are currently in the midst of a major recession, the number of young start ups has definitely diminished. Plus the fact that most start ups aren't getting monster investments and hiring just for the sake of hiring. The people who work at start ups today do it because they prefer to work in that environment versus trying to make a quick buck (believe me, there are far easier ways to make money than working at a web start up). This culling of the herd has definitely reduced the number of douche bags I see in the industry. But as the old adage goes, a douche bag never thinks he/she is a douche bag. Maybe someone is reading this and thinking, "This guy is such a douche bag." Wouldn't be my first time.
We were visiting friends yesterday in the South Bay for dinner and a movie. We ended up hanging out at Santana Row before the movie (specifically for Pink Berry). I'm actually quite amazed at how many people were there eating, drinking, shopping, etc. Guess the recession hasn't really hit Santana Row that much. I've noticed attendance at other mix-use malls like Emeryville's Bay Street has gone down compared to a few years ago.
I was thinking how much this place reminded me of a Vegas theme hotel, specifically the Venetian. Maybe it was the live music, the promenade, or the formulaic restaurant/bar/clubs. Actually, it was probably all the girls in skimpy dresses sloppily/drunkenly coming out of the bars.
I've written before about the US auto industry. In a previous post I spoke of Toyota being a company the US auto companies should emulate. Today, we see that even Toyota is not immune to the recession. I still think they're in a much better position to weather this storm than any US company but when a well run shop like Toyota loses $7.7 billion in a quarter, that can't be good.
When asked whether he left open the option to pressure a bank CEO to resign, Geithner responded, "Of course. Of course.
On the heels of Rick Wagoner's ouster, Tim Geithner made this statement in an interview with CBS. Though not as adamant as I would prefer, it still sends a message to executives of companies who are receiving government assistance. If they couldn't run a good business while playing with their own money, what makes us think they are going to do any better when the money isn't their own?
Sprint's CEO awarded $2.6 billion bonus
I assume that's a typo and it's $2.6 MILLION and not BILLION. Even still, I don't really have an issue with any CEO's pay as long as the company doesn't get government assistance. If Sprint can absorb whatever losses they've had AND pay him a bonus, that's their prerogative. My rule of thumb is that any company that receives a bailout needs to have their executive ranks whacked because if those executive were doing a good job, they would never have needed a bailout to begin with.
UPDATE: CNET has fixed the typo.
The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.
You never want to relish when someone gets fired. But don't cry for Rick Wagoner. He made over $63 million during his career at GM, most of which came during his years as CEO (a little under $39 million). When you realize that GM lost approximately $82 billion in the last four years of his tenure, it was obvious that new leadership was needed. Interim chairman, Kent Kresa, also stated that most of the GM board of directors would be changed at the annual meeting in August. Another good move seeing as how they kept on supporting Wagoner year after year while he presided over the meltdown of an American icon. I don't know if the US auto industry can be saved, but it couldn't hurt to have some new blood running things. I want to desparately support American made automobiles and if the stars are aligned, my next car will be American made.
The news regarding $165 million in bonuses paid to AIG executives has been making the rounds. A lot of people are trying to come up with solutions on how to get back some or all of that money. There's a lot of legal back and forth about whether it's even possible or that doing so would hurt AIG by having "good" executives leave (are there not a lot of "good" executives currently out of work that couldn't fill their spots?). Since I'm a solutions oriented guy, I have a suggestion that might solve everyone's issues. Just reduce the next bailout payment by $165 million. Believe me, $165 million may sound like a lot but compare that to the billions we've given AIG so far, it's really not that big of a deal. More than anything, it's a public relations issue and not an operations issue. So to soothe the public's concern, just deduct the bonus amount from the next payment and call it a wash. It'll be a lot easier than lawsuits and grand standing but maybe to all the politicians the publicity was all they cared about.
UPDATE: More craziness has insued. From a special surtax to executives allegedly being asked to commit ritual suicide. Again, in my opinion, it's an opportunity for certain politicians to cash in publicity-wise on the outrage by the taxpayers. However, towards the end of the article, there is mention that the Treasury would try to restructure the next bailout payment to recoup the bonus amount. That's probably the most frictionless way to do it.