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Spoiling a Good Walk

The dangers of government intervention

 

My company has remained solvent, supports numerous charities and sponsors a PGA event. Thus I am clearly a criminal.

My company has remained solvent, supports numerous charities and sponsors a PGA event. Thus I am clearly a criminal.

The gentleman presenting Phil Mickelson with a trophy is Frederick “Rick” Waddell, the CEO of Northern Trust.  Just last week, Mickelson won the Northern Trust Open, which was once upon a time the Los Angeles Open. Mickelson shot a 62 on Saturday, and then rebounded from a terrible start to win. All of that is besides the point. The point here is that Northern Trust sponsored the event and spent several million dollars wining and dining their clients. 

All this after accepting — OK, being more or less intimidated into taking — $1.6 Billion of the $700-plus Billion in TARP money late last year.  Northern Trust is profitable. It’s well capitalized. It’s not a retail bank, and it did well to insulate itself from mortgage-backed securities.  At any rate, it took $1.6 Billion of the TARP money and had been making dividend payments to the government as if it were a preferred stock holder — about $20 million worth after just one quarter.

Meanwhile, Northern Trust is in the midst of its contract to sponsor what is now called the Northern Trust Open. Due to its contractural obligations, it must pay several expenses for the Open. It also has the opportunity to entertain its clients, which it did.  TMZ, a site that makes people dumber, was all over the concerts and bashes Northern Trust threw for its clients.

Northern Trust responded to TMZ, and listen again to the facts:

 

  • Northern Trust made $640 Million last year.
  • Northern Trust is well capitalized.
  • Northern Trust did not need TARP funds.
  • The government wanted Northern Trust to receive TARP funds.
  • Northern Trust accepted a fraction of 1 percent of the TARP funds.
  • The government was getting an actual return on the TARP funds.
  • Northern Trust continued to operate as usual.
  • Northern Trust raised about $3 million for Los Angeles-area charities, which in my opinion is remarkable for a bank based in Chicago.
Anyway, the Barney Franks and John Kerrys of the world are still distressed and are looking for some scalps. So Northern Trust has offered to return the cash.  Good for them. Hopefully the government will take the money back and go away. By the way, John Kerry and Barney Frank both accept government money, (presumably) take tax deductions, and spend my money. (Kerry and Frank each have spent more tax money than Northern Trust ever had.)  Perhaps they should live on just the bare essentials. No more high-priced dinners. No more first-class flights back to the district.
Bad companies slash marketing and sales budgets in times of a downturn. This is the time a company should reinforce its customers’ loyalty, build its brand name and find new markets.  The fact a company has survived a downturn quite nicely is another reason to avoid cutting marketing expenses.  Finally, corporate sponsorship beats government funding any day.  I like professional golf. Other people like it, too.  I might never be a customer of Northern Trust (although I’ll say they’re sort of an aspirational brand around here), but I did watch their event.  Is that any worse than the National Endowment for the Arts supporting crap that offends with my money?
Full disclosure: the charity with which I am most involved benefits greatly from Northern Trust’s generosity.  Their generosity extends further than the Kohl Children’s Museum. The bank is a major philanthropic force in Chicago, and they didn’t become such thanks to government bullying.
The moral of the story? Just butt out, Uncle Sam.

About Rick Santelli…

Yesterday’s rant has made him the household name du jour.



I have a secret for you: he’s right. I’ve made money on investments. I’ve lost money on investments — big investments, too.  Some of my losses weren’t because I made uninformed decisions. Chance played a big role in it. But I played, and I knew the rules of the game, and I took on the risk I was comfortable with. Maybe the floor of CME group’s Board of Trade isn’t a statistical cross-section of America, but Santelli’s correct. Let bad mortgages go into foreclosure, or let the banks broker their own deals with their borrowers, but let them figure it out for themselves. If the asset is truly worthless, it’ll go to zero in value. Problem is, somebody will take a flyer on just about anything so long as they feel it’s at the right price. The market is simply nature.  Government can try to play God, but not even God attempts to do the things government troes to do. We cried for the government to do something about oil and gas prices. Get those fat cat speculators and Big Oil execs bringing in big bucks last summer when oil was $145/barrel.  We did nothing. What did it give us? $33/barrel oil and $1.80/gallon gas. Now we’re supposed to do something so we don’t grow more dependent on oil. (I don’t know; I think doing nothing did a good job of weaning us off gas guzzlers, and it also helped bring oil down.) The left hasn’t hesitated to skewer Rick. I could bore you with links to Democratic Underground, or Huffington Post or Wonkette, but if you want to go there, do it on your own time.  The White House is on board. Robert Gibbs even got personal with Santelli. How dare a derivatives trader (cue evil music) question the benign law professor? It is fun when the official spokesman of the President takes aim at a private citizen for daring express his opinion.



(By the way, nice softball from that reporter: “Calm the unwashed masses. Let them know how our Lord and Savior President is going to deliver us all from evil.” Santelli responds quite simply: Contract law must be sacred. Chris “I want to run as a Democrat from Pennsylvania, but I HAVE CREDIBILITY DAMMIT AS A JOURNALIST IGNORE THE FACT I WAS ON TIP O’NEIL’S PAYROLL AND JIMMY CARTER’S PAYROLL BUT SCREW RICK SANTELLI WHOSE CREDIBILITY IS IMPEACHED BY A VOTE FOR JOHN MCCAIN IN NOVEMBER” Matthews equates Rick Santelli to Ebeneezer Scrooge.



One point the Leftist blogs have made is that Santelli is a hack. He cheerleaded for TARP and bank bailouts last year, and now he’s bitching about the homeowner’s bailout. Very good point. Santelli’s sarcasm is obviously very subtle.



Now if only we can get him to run for the U.S. Senate, the Governor’s office, or Mark Kirk’s seat.

Golf tips anyone?

I took my wife to the driving range this weekend in preparation of her starting a battery of lessons. It was the first time I swung a club in nearly a year. Graduate school cramps my style, I guess.

On the occasion of Joanna starting golf lessons and the eve of the greatest tournament ever (the U.S. Open), I offer you golf tips given by two former Indiana coaches, Sam Carmichael and Bob Knight.

This circulated around IU back in the early 90s when the two put together a short golf series. They filmed this series at Legends of Indiana Golf Course in Franklin, Ind. (which is supposedly in pretty good shape after the devastating flooding down there over the weekend.)

Definitely a few profanities, so watch the volume if you’re a little sensitive.