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Here’s the deal. I will forgive you half the money you owe me, if you take pay cuts, accept reductions in pensions, reduce the number of people you employ (maid, cook, driver), and generally accept a continuously declining standard of living for the next nine years. Plus, of course, you need to pay more tax.
But mind you, I will put my own accountant in your house to see that you don’t cheat on your promises. And after nine years, if we still think you are solvent, we may welcome you back as an equal to our club and lend you money again like old times.
Deal? Your first response will probably be the unprintable @#$%&!^$#@. And this is probably what the Greeks will say when the eurozone rescue package calling for extreme austerity from them is put to the vote. Greek Prime Minister George Papandreou, shaken by months of continuous street protests and public anger at what they are being asked to swallow, sees no other way to salvage his government but to ask for a referendum.
By any stretch of logic, if even nine years of pain and belt-tightening is not good enough to solve the problem, it makes more sense to default and take destiny in your own hands. The eurozone leaders will then have to decide whether to turf it out or otherwise quarantine the Greeks in some way.
Why is Europe is such bad shape? The answer is a lack of political will to really build huge firepower to tackle this mother of all financial crises.
The latest package was simply too little, too late. The eurozone leaders have used mirrors to raise the value of the €440 billion rescue fund by leveraging it and make it look like €1 trillion, when what was required was more than $2 trillion to see that the contagion does not spread beyond Greece to Portugal and Spain.
But this is exactly what has been achieved. And the reason for it is that all the leaders of the eurozone are thinking country, not continent. Germany is fighting its last war (hyperinflation between the two world wars) and reluctant to reflate. France is worried that any larger rescue package backed by further debt will mean a downgrade of its own AAA credit rating.
The eurozone is in a slow-motion dance to death and disaster. It will need a miracle to rescue the common currency.
But if the Greeks say screw the rescue package and austerity measures, the eurozone as it now stands will be history.
We need to give this kind of a public ass whoppin' to central bankers, IMFers, goldman sackers, money managers and other financial hoodlums promoting croney capitalism and robbing the productive economy.
This guy should be hired immediately to enforce financial crime laws since the government refuses to do so.
Uncle gives nephew an ass whoppin' for trying to be a gangster on Facebook.
How is it that as earlier posted by me, http://forums.bharat-rakshak.com/viewto ... 6#p1186896 Haiti is invaded in 2004, its majority Govt disbanded and debt is shoved down. For Greece, even for hundreds of billions of dollar debt, there is a referendum within and others are watching from sidelines. Who is watching and checking this?
All this reminds me of my professor. I remember how he always drove the point that risk is always personal. There is nothing called institutional risk. In the end of the day you have to look at 'The Person' who is taking the final call. What is his motive. What ill be his situation if things go good and when things go wrong.
Day after day he will cook up scenarios and ask to simply answer deal no deal. As students we caught up with game. At a single hint of risk, the whole class (we were only 12 in this course) would say 'No Deal' no matter what the matix said (his matrix was specially long to understand and notoriously time consuming to apply). There was nothing at stake anyways.
Then the professor turned the table and asked us to role play and clinch deal among ourselves. Full back ground note was to be made and draft agreement with was to be made up and signed. Then his other class will choose who got the better deal. We again gamed the system, we started to keep track of everyone of us's good or bad deals so that in the end the whole class will perform almost at par.
Then the professor turned the table once more. Our success rate got directly proportional to the marks that we will get that are at his discretion. Again we came up with a formula to game the system in a way that everyone gets the approx same marks out of his discretion quota.
Anyways soon the ground realities started becoming very clear. Students who had lower theoretical points started lobbying for bigger share of success ratio. At first people accommodated this. But then the good professor started giving negative points for bad deals. The scenario completely changed. negotiation became really tough.
This lead the professor to introduce us to game theory and other tactics. Now everyone before playing the scenario would check the academic performance of his opponent, study his strong subjects and weakness and then negotiate. The risk became personal.
Unfortunately, today Governments / businesses have kind of stopped aligning individual interests and risk with their own. People screw up in billions and still end up being millionaires. This kind of delinking started in 1990s and now we are all paying for it.
Greeks simply do not have money to pay up, so does italy, spain and portugal. Default is inevitable. Fortunately, if they do default, it opens great opportunities too. People aren't seeing that. It's the fear of transition. Once the mental block is over come, everything will be fine.
Also, I bet Pakis are ready to show the middle finger to IMF /ADP /WB. They have even crossed the mental threshold.
Also, I bet Pakis are ready to show the middle finger to IMF /ADP /WB. They have even crossed the mental threshold.
Paw-Kiss-tan was historically a "one tranche" country and I doubt they ever succeeded in completing an IMF program fully. They always got bailed out for "strategic" reasons.
While Greece can show the birdie to the Euros and walk away , the Pawkees will end up shoving their fingers up their part of the anatomy where the sun never shines. It will be suicide on a mass scale. The Greeks will suicide if they continue in the Eurozone and their salvation is outside it. Pawkees cant have any salvation and even as a wreck ,they are beyond any "salvage" operation.
This is a function of the Human brain. There are two separate risk assessment centers in the Brain. The famous Amygdala (reptilian brain) and the Neo-Cortex (frontal lobe) Brain.
Amygdala
- Ancient, truly ancient. 500 million years old. Response through body hormones, Adrenalins, etc.
- Can never be turned off. Involuntary. Response immediate. Learning only from experience. Never forgets.
- Not good application for rational thinking
Neocortex
- Very recent. Less than 2 million years old. Response through rational application. Youth makes for many mistakes.
- Can be turned off (most unfortunate). Response through conscious action and can be delayed. Voluntary.
- Able to project risk into the future.
Someone with a medical background can elaborate a lot more. gakakkad saab maybe...
It is this bi-polar approach that causes these wild boom bust problems. Your professor was trying to get the Amygdala have a learning experience or two. So your risk radar is permanently turned on. Every generation that comes along has to have this economic risk radar manually turned on. Most fail and every generation ends up making the same mistake.
The fraud is also systemic. However the govt wants to empahsize, the fraud when the real problem is leverage to buy non-existent beans unlike in Jack and the beanstalk.
greece cabinet has backed referendum
referendum will be -ve to austerity and cuts
hence under cover of democracy greece will then smoothly say 'no' to the french and german banks and move along.
If they don't the become slaves again. Only in 1820 they got freedom from the Turks. During WWII they were occupied by the Axis.
What we are seeing is repeat of the Black Death and the end of feudalism in Western Europe. Only now its capitalism.
Am reading a book on "Whatever happened to Modernism?" by a UK English prof Gabriel Josipovici. In his first chapter, he quotes three writers spread over a century (1815-1920) located in all different parts of Europe, who lament at the loss of intellect and hark back to Greek and Roman writers when they despair. The point is when they reach a dead end they go back to Greek writers/thinkers.
So again the Greeks are showing the way when the new monolith is blocking progress.
Greek Referendum is now subject of intel commentary
Nightwatch 1 Nov 2011
Greece: Greek lawmakers rebelled against Prime Minister George Papandreou's surprise call for a popular referendum on the new debt deal with Greece's foreign lenders. Papandreou announced he will seek a vote of confidence from the Greek Parliament this week.
The revolt by lawmakers and a no-confidence vote planned for Thursday or Friday raise the prospect of a government collapse that would not only render the referendum plan moot but likely scuttle - or at least delay - the debt deal that European leaders agreed on after marathon negotiations in Brussels last week
Papandreou must resign, according to six members of Pasok, the country's governing party. A Pasok lawmaker defected from the party, reducing Papandreou's parliamentary majority. Another Pasok lawmaker called for "a government of national unity."
Comment: Greek politicians are only willing to take collective responsibility for the austerity required by the bailout plan. Some, like Papandreou, apparently hope to take political advantage of nation-wide hostility to the outside intervention, which would be manifest in a likely negative vote in a national referendum.
Such a vote would reject the austerity measures and result in a Greek default on sovereign debt. That would mean that European governments and banks would get repaid for none of the past short-term bailouts in addition to other non-performing Greek obligations. Greece would be forced to leave the Euro community and would experience recession, if not depression, as the economy re-valued itself.
This situation exemplifies the difference between risk and threat. A Greek default with its ripple effects across Europe is more than a risk; it is an actionable probability of real harm, which makes it a threat. The banks acted to protect against risk, but have not reacted to the indicators of threat. Damage looks unavoidable.
Singha wrote:what is the current outlook on american ageing? is the working age population scheduled to grow to keep pace with the increasing number of retired on social security?
or will people be forced to work till their dying day by raising the retirement age on most jobs?
Ironically, my 7th grader is learning about the problems of ageing in the Western World. He talked about Japan. He was able to compare USA and Japan, as USA lets in immigrants while Japan does not easily let in immigrants. It is kind of open secret, immigration helps USA and it is being acknowledged indirectly by some.
Security. Sustainability. Stability - were key thousands years ago, and now and will be thousand years from now.
Ladies and gentlemen, I saw Bloomberg TV moving on to discuss Italy. They were talking about how Italy is better than Greece. If Italy was not like Greece, why even bring it up, huh Are they comparing Greece with Australia. No it is with Italy. So there is smoke saar log. Portugal and Spain are going to be spared for the moment now.
Pimco’s Bill Gross said in San Francisco Tuesday that modern-day capitalism is in jeopardy, given its dependence on risk-taking, growth and plenty of leverage. “We need a banking system that’s attractively and conservatively capitalized,” Gross said. “We’ve made progress but we need to go further.”
Gross said Greece is likely to remain in the Euro zone, but it could be better for the financially troubled country to exit the euro and return later. “Perhaps Greece should follow Iceland’s example of telling banks to stuff it,” Gross said. Much of Europe’s sovereign debt is held by banks.
Greece rocked financial markets around the globe this week by deciding to put to a voter referendum a European bailout plan that would have the continent’s banks “voluntarily” taking a 50 percent writedown on their Greek soveriegn debt. By contrast, Iceland was the subject of a favorable New York Times column by economist Paul Krugman last week noting that “Iceland let the banks go bust and actually expanded its social safety net.”
ramana wrote:Deepak Chopra:
Now its in the realm of philosophers.
Deepak Chopra does not have a clue what he's talking about.
Building more bridges & roads is not going to revive the economy.
What's needed is to remove the monopoly over intrinsically worthless money that central banks have forced productive society into. The power of money needs to be returned to the people who earn it, not the people who are counterfeiting it or gaming the system for it.
Many economists across the world are persuading BRICS (Brazil, Russia, India, China and South Africa) members, especially China, to help Europe overcome its debt crisis.
Some European Union experts say that "Europe is special" and, hence, it is rational to concentrate on the continent at the expense of emerging economies. Such a worldview was strongest in France and Germany, and led the two countries to expand the EU by including a host of countries in the union that shared little with them in history and culture except for being part of Europe.
Had France and Germany kept the entire world, instead of only Europe, in their focus, neither would be in the kind of trouble that they are in today. French and German banking institutions are in effect close to bankruptcy, because of their exposure to the debt and credit instruments of other European countries. There has been a collective round of meetings, but they have resulted only in words rather than actions.
The reality is that no democratic government, whether in Greece, Ireland, Italy, Spain or Portugal, can implement the severe cutbacks in social spending that economic conditions mandate. These countries are moving closer to a crisis with each passing week, at the end of which European public finances and financial institutions will be in a parlous condition.
Trade can never be one-way traffic. The EU needs to be as open to Asia as Asia is to the EU, for this is the only way that consumers in Europe will benefit from the lower prices of Asian goods and services. This is especially important when Europeans are paying higher prices for clothes, pharmaceuticals and services because competition from Asia has been cut off through various methods. The example of India shows such a policy. Rather, the EU should accept the universality of humanity and treat the world as a single unit.
Asia and Europe can ensure the prosperity of each other. But for that to happen, the various barriers to trade erected by the EU have to be demolished. Protectionist systems do no good to European countries' economies as a whole, although they may have boosted the profits of a few large companies. The harmful effects of a Europe-centric policy have become clear with the crisis in the eurozone. Such a crisis cannot be overcome by pouring the savings of billions of Asians into economies where people have been living in a way beyond their means.
Theo_Fidel wrote:
This is a function of the Human brain. There are two separate risk assessment centers in the Brain. The famous Amygdala (reptilian brain) and the Neo-Cortex (frontal lobe) Brain.
Also related to development of languages, language groups and speech in humans. Might elaborate in the right thread in a future date.
NYT's Many Alarms Rang Before MF Global Crashed report, which I think was posted before, has triggered my CT antenna. Stealing of customer money is a side show for public consumption like Dominique strauss Kahn's voyeristic adventures, Madoff's ponzi, Spitzer's Client 9 etc etc. Basically the company and the guy is punished out of existence for buying some EU countries bonds which is tantamount to traitorship coz US/WS is doing everything it can to kill EURO and this guy misread, tries to be clever by half and makes a tactically brilliant move which backfires...literally with fires in his hole.
If true and extrapolate this CT, US/WS is dead serious on Euro kill and it is interesting to see how Euro manages to survive in this new emerging reality....Perhaps if we see another major screw up in US, BRIC will be forced to make a serious choice whether to support EU or not and EU better line up some good offers for them that have real value. For BRIC, it will be easire to float an alternative while EU is alive rather than not. this may be minimalist thinking but depends on how EU accomodates to alternatives in two different scenario: EU is alive or EU is dead. Whether they fight back or give up all together.
The other perspective to learn from this is if US is dealing these type of firms/deeds with iron fist, then perhaps..just perhaps that other US firms will come out relatively better off even if the yellow matter hits the circular rotating object hooked to the ceiling in Europe. This does not mean a suggestion is made here to do an MF global and buy some infamous banking stock on further dips
real test of intent will be if some big french and german banks are targeted for failure by US doing a wink wink to greece, italy, spain, portugal to boldly show the finger and leave the euro.
US would not like a france-german-russian axis to dominate the continent with its financial, technology and resources strength.
it always need a few 'pakistans' weak and dependent on the periphery of major powers to 'keep them in check' .. all reported to DC with dotted line reporting chain to london.
WSJ - direct statements from the two leaders, not 'sources' or innuendo.
CANNES, France—Europe's leaders, making it plain that they've reached the end of their patience with Greece, demanded that the beleaguered nation declare whether it wants to stay in the euro currency union—or risk going it alone in a dramatic secession.
"Does Greece want to remain part of the euro zone or not," German Chancellor Angela Merkel said. "That is the question the Greek people must now answer."
Angela Merkel and Nicolas Sarkozy, in Cannes Wednesday, said Greeks must decide whether to retain or drop the euro.
French President Nicolas Sarkozy said the Greeks would get no more euro-zone rescue aid—"no French taxpayer money, no German taxpayer money"—until the question is answered. Without aid, Greece would be bankrupt within weeks.
The extraordinary rupture with the rest of Europe—whose leaders have insisted for months that an exit from the currency union is simply inconceivable—follows Greek Prime Minister George Papandreou's stunning decision Monday to call a referendum on his country's bailout.
Given the deep unpopularity of the budget-cutting measures that the bailout requires, a "no" vote in a Greek referendum is a real possibility. That could send Greece, and possibly the euro zone itself, into chaos.
Mr. Papandreou said the referendum, which must be approved by the Greek Parliament, could be held Dec. 4 at the earliest. He said Wednesday he had tried for a broader political consensus on Greece's bailout but "this wider consensus did not exist." He said he hoped the Greek people would vote affirmatively.
"The people are wise and capable of making the right decisions for the benefit of our country," he said. "A positive decision by the Greek people is not only a positive decision for Greece, it is a positive decision for Europe."
The wait opens a month-long stretch of uncertainty for Greece, for Europe and for global financial markets. Wednesday, to prepare the bloc, its leaders moved to accelerate efforts to expand their bailout fund and fortify their countries' banking systems. There was a troubling sign Wednesday when the bailout fund, which raises money for its operations on financial markets, pulled a bond offering, citing unfavorable financing conditions.
The call for a referendum, particularly if presented as a question of euro or no euro, is a risky bet. Should the referendum fail, Greece would come unmoored from the euro zone and likely default on its €350 billion ($480 billion) of debt—sending a giant shock wave that could test the resilience of other weakened euro-zone countries. But should it succeed, the Greek government would have a strong mandate to push through austerity measures and proceed with the European Union's plan.
World leaders are gathering in this Riviera city, more accustomed to movie stars than motorcades, for the annual summit of the Group of 20 industrial and developing nations.
But the deliberations of the G-20 are now a sideshow to the Greek main event. Europe had hoped this summit would be an opportunity to demonstrate to the rest of the world that it has its debt crisis under control. An all-night euro-zone meeting just last week had fashioned a "comprehensive" plan to aid Greece, bolster the bloc's bailout fund and recapitalize the region's banks. That is now in tatters, and the image Europe is presenting is one of more confusion and uncertainty than ever.
In a series of hurriedly scheduled meetings on Wednesday, Europe's top powers huddled to plot their strategy for responding to the new uncertainty posed by Greece and to dress down the Greek prime minister.
WSJ's Stephen Fidler reports Greek Prime Minister George Papandreou has indicated he is standing by his decision to hold a referendum on the debt rescue agreement reached by euro zone countries last week.
In the evening, before the official kickoff of the G-20 summit Thursday, Mr. Sarkozy, Ms. Merkel, International Monetary Fund chief Christine Lagarde and the two top officials of the European Union, José Manuel Barroso and Herman Van Rompuy, met in a strategy session. In a phone call earlier in the day, Mr. Barroso told Mr. Papandreou that the referendum proposal threatened Greece's lifeline of aid.
Later in the evening, Mr. Papandreou arrived to join them, walking alone into the Palais des Festivals.
After his meeting, it appeared the European leaders had scored one victory by pulling the proposed referendum forward to early December. Greek officials had earlier signaled that it would be held in January, after the completion of negotiations on a new Greek bailout.
Protesters dressed as prisoners demonstrated against austerity measures in Athens on Tuesday.
The European leaders also appeared to have changed the focus of the referendum from the bailout plan, with its uncomfortable budget cuts, to euro-zone membership itself. Polls show that while a majority of Greeks are dispirited by the bailout, most want to hold on to the common currency.
The latest eruption in Europe's debt crisis is particularly damaging considering how much the region now needs the rest of the world. Voters in Germany and other strong countries in the euro zone's north have insisted they will provide no more money to propping up Greece and the rest of the periphery.
Thus the EU is turning to China and other emerging countries with surplus cash. Mr. Sarkozy dined with Chinese premier Hu Jintao Wednesday; no specific commitments emerged from that meeting, and the Chinese have said they want more detail and clarity from Europe on its plans.
Mr. Papandreou stunned Europe and financial markets this week when he called for a plebiscite on the latest, €130 billion rescue package for Greece, which is tied to deeper austerity policies in the economically suffering country as well as the restructuring of Greek bonds.
Analysts say the referendum idea was a Hail Mary pass by the increasingly isolated premier, aimed at gaining a popular mandate for his overhauls of the Greek state and economy and putting opponents on the spot.
The enormous stakes, and the high risk of a "no" vote in the referendum amid Greeks' anger about steep government spending cuts and tax hikes, have triggered a revolt by some lawmakers in Mr. Papandreou's ruling Socialist party.
On Wednesday it appeared he might muster enough votes to scrape through a vote of confidence in Parliament set for Friday.
Even if Mr. Papandreou survives in office, he may lack enough lawmakers' support to stage the referendum.
Meanwhile, Greece is fast running out of cash.
Money is being supplied by the EU and the IMF under a €110 billion program agreed to last year. That aid is distributed in quarterly tranches, and the next tranche was expected to be paid imminently. But that was before the referendum call, and it is now clear that aid is contingent on resolving the political crisis.
Failure to make the next aid payment, valued at some €8 billion, would likely mean the country running out of money in December, officials said, potentially causing an unplanned default on bonds that come due that month.
A spokesman for the German Finance Ministry said Greece doesn't need urgent bailout payments now and won't require the next chunk of aid until mid-December.
—Costas Paris, Alkman Granitsas, William Boston, Stephen Fidler and William Horobin contributed to this article.
Spain could likely be next. throughout the middle ages it made a mess of its internal politics and economy but survived by looting gold, silver, tin and forests from the New World. and later by its proximity to more developed economies of Italy and France. it has already had a bout with fascist rule under franco and been torn by a civil war with outside power involvement.
add to that the scheming brits who take a fancy to its warm climate.... its central and north grasslands (highlands) were devastated by overgrazing in middle ages and became today's desert where sergio leone western pics are shot.
its charmed existence in the top table could be in threat.
I suspect that or the country ruled by that buffoon Berlusconi could be next. But when either of these countries get into deep trouble, it aint gonna be pretty.
US Economy Barometer
Folks, I visit Buffalo/Niagara region in New York at least once every 3 months. I was there today and things are rebounding.
* New stores have opened in the past 3 months
* Stores are well stocked and do not have a lot of discount
* Several stores have "Now Hiring" signs
* Parking lot was full of customers
wow..if buffalo is on the mend, things must indeed be getting better for US manufacturing and tourism. I remember the look it had back in 90s...quite bad.
. All this Oiero posturing by Frau Merkel and Monsier Sarkozy is so much hot air . "Accept the Oiero deal , we gave you or get out of the Eurozone".
The Greeks are playing them like a drum. It is the old saying.. The banks lend you $100, they have YOU by the balls. The bank lends you $100m , you have THEM by the balls.
The Greeks have a real real big weapon. That is the Samson option. The Oiero banks have lent them hundreds of billions and they have the option of spreading the contagion to the remaining PIIGS. Now they are threatening and paying hard ball. Write off ALL the debt and let us stay in Euro, or we will go Soosai and show the birdie to your banks and along with the banks, the rest of the Oierozone PIIS will fall like dominoes and that will result in searing pain for Phrance and Germany.
Greek guvrmand in danger of falling! Color revolution finally spreads to Greece.
If this givt collapses, then the masses will take to the streets again. And if that happens, there is no telling where the whole situation goes from there. It could lead not only to collapse of Eurozone, but the rise of genuine democracy in Europe. But first there will be a period of chaos.
Singha wrote:wow..if buffalo is on the mend, things must indeed be getting better for US manufacturing and tourism. I remember the look it had back in 90s...quite bad.
No, Buffalo still looks just like it did in the 90's. If anything it has probably come up to look like it did in the 90's. You can imagine the hole it was in this past couple of years.
Greece: Prime Minister Papandreou won the support of his Cabinet on 2 November to hold a referendum on the EU bailout. The date for the referendum is 4 December.
Papandreou told his Cabinet that the referendum outcome will provide a clear mandate and message inside and outside Greece about its commitment to Europe and the euro.
Comment: German Chancellor Merkel said the Greek referendum will be a vote on membership in the European Union.
Concerning the impact of the euro crisis, Feedback from a brilliant and well-informed reader provided the following: US banks are lying about their European exposure.
"Guarantees provided by US lenders on government, bank and corporate debt in five European countries - Greece, Portugal, Ireland, Spain and Italy -- rose by $80.7 billion to $518 billion, according to the Bank for International Settlements. Almost all of those are credit-default swaps (CDS), said two sources familiar with the numbers."
"The CDS holdings of US banks are almost three times as much as their $181 billion in direct lending to the five countries at the end of June, according to the most recent data available from BIS. Adding CDS raises the total risk to $767 billion, a 20 percent increase over six months, the data show."
NightWatch reported a month ago that US bank exposure to European sovereign debt posed a serious threat to the US financial system. The feedback report reveals the extent of exposure which is not generally known. Direct investment is less the problem than credit default swaps, which one analysis indicates are huge for the largest US banks.
For US banks this behavior repeats that during the sub-prime mortgage crisis in the US, except this time countries are at risk, not homeowners. At least five major US banks are vulnerable to the threat of European debt default. "We could have an "AIG" moment in Europe," said Peter Tchir, founder of TF Market Advisors, a New York-based research firm that focuses on European credit markets.
On 31 October MF Global Holdings filed for bankruptcy because of its losses on its $6.5 billion gamble on Italian bonds. If Italy falls, Europe, including France, will follow, according to one analysis.
Spain's/Italy's fiscal position is not quite as bad as Greece. Spain in particular runs a modest deficit of 4%-5%. In the case of Italy about 55%-60% of its debt is domestic.
This is different from Greece which completely depends on EU to pay the bills. Greece needs ~ Euro 10 Billion every couple of months just to pay its workers.
Methinks one more black swan will be needed. Say a large French bank going under or a nice little civil war some where.
The Greek prime minister has abandoned plans to hold a referendum on the bailout package for Greece agreed last week, the Associated Press reported, citing two officials close to the Greek premier. Greek Prime Minister George Papandreou gave up plans for the referendum after the country's main opposition party said it would back the bailout.
Per Ramana's article, Corzine gets a $12.1 Million payout for losing his job. Yup, talk about incentive to bankrupt MF Global.
No doubt he will got scot free and join another bank elsewhere. All his 'brave' risk taking minions will fan out and rejoin traders elsewhere. After all it wasn't their fault.
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Another $100 Million for shatteringly poor performance.
Eugene Isenberg, the chairman and chief executive of Nabors Industries, is pocketing $100 million just to give up the second of his two titles. That seems absurd. But the board of the $5.3 billion U.S. oil drilling company was hamstrung by an old contract. Even so, Nabors’ stock has underperformed for a decade.
Isenberg’s princely deal seems particularly odd given that he will remain as chairman with Anthony Petrello, the long-time number two at the company, replacing him in the corner office. There is little in Isenberg’s record in recent years that justifies the payout.
Nabors’ shares, which are down about 20 percent this year, have trailed the S&P 500 Index in 2011, over the past year and over five years. They have barely kept pace with the broad market benchmark over the past decade, with peers far outperforming it. Helmerich & Payne stock, for instance, has more than tripled over 10 years, while Patterson-UTI Energy shares are now more than twice as valuable as in 2001. Nabors is up 11 percent over the period.
Under Isenberg’s leadership the firm has also trailed competitors in building new rigs capable of exploiting the boom in shale gas. And Nabors’ subpar management of its own oil and gas reserves shows why energy service companies typically steer clear of the production business.
Are they comparing Greece with Australia. No it is with Italy. So there is smoke saar log. Portugal and Spain are going to be spared for the moment now.
