You could make the case that this era has produced possibly the worst bad guys in business history. Think about that for a minute. That’s really saying something. They’ve got a lot of competition. Carnegie and Frick, who shot their own workers. The guys who fomented the Teapot Dome, whatever that was. Who remembers? 

Somewhat more recently, during the days I still wore suspenders and power ties, there were a lot of bad guys, too. Many are philanthropists now, just like Carnegie and Frick, come to think of it. God bless ‘em and the work they do, but they were pretty bad. The fad then was to rake up companies as if they were fish in a net, gut them, and profit from the asset. It was called, in a most Orwellian twist, “the democratization of capital.” Most of the clever little miscreants got away with it, but a few got crazy greedy and messed it all up for the rest of us normally greedy people. There were a few really gross ones. Dennis Levine, for instance. Insider trading? Seems so mild now. 

Ours seems worse somehow. Just look at the harvest! Dick Fuld, the former head of Lehman Brothers, just sold his $13 million dollar Florida home. To his wife. For, reportedly, $10. You read that correctly. Ten dollars. You have to excuse me, but I just have to say… that’s so cool. What bravado! Mess with Dick Fuld, will you? Well, Dick Fuld has a few tricks up his sleeve! And the guys from GM, Ford and Chrysler, who flew to Washington to ask for money, each in his own private jet? Now Citigroup, which took a huge bolus of bailout bucks, is said to be purchasing a $50 million jet. Amazing. I’m sure there are a host of excellent business reasons they are completely justified to do so. I bet they will even save some money, in their minds. But really. You’ve got to hand it to them.

Then there’s Bernie. I really enjoyed the piece in last Sunday’s New York Times that did a thorough mental D&C on him. It was very entertaining. I’ve always thought that it took a certain kind of psychopathy to succeed in business. The bigger the nut, the better he or she does, pretty much. There are exceptions, of course. But Bernie is such a huge, juicy example. The sharp kid who didn’t do so good in school. All the smarty-fartys went to Harvard and Yale, and he had to go Alabama, which was fine, but not so Ivy League. Couldn’t take it.  After a year, went back to Long Island and attended Hofstra at night. He would show them! And he did, too. Put it over on everybody for a long time. Really stuck it to them all in one way or another. Even now, totally busted, and when he goes outside there’s a crafy, insouciant, twinkly, beamish thing going on. Something… proud. Fifty billion dollars. What an achievement in bad guy history. 

And then there’s the rest of us. All the Bernies in the world couldn’t exist without the support of the brokers, bankers, regulators, credulous investors, and enormous bigshots in their own right who make up the neural network that makes Bernies possible. 

But are we the worst? There’s a lot to consider. Take the guys who run the Chinese railway system, controlling the supply of tickets with violence when necessay, stabbing people, beating them upside their heads. Saw in the LA Times. That’s bad, if not quite as sophisticated. Still, they’re no slouches. I mean, putting poison into children’s toys, toothpaste marketed to kids, and pet food? That’s seriously not good, I admit it.

At the end of the day, however, I’d put our guys up against theirs anytime, at least for now. They’re coming up the ramp. But any nation that can produce a Rod Blagojevich has nothing to worry about in this particular contest.

I was talking to my broker this morning and she said something interesting, once I could make it out. “I can’t hear you with all that background noise,” I said to her.

“It’s very windy out here on this ledge,” she replied.

I asked her to postpone her current operating plan for a few moments, at least, and there was a short silence while she climbed back inside and settled herself behind her desk. “So,” I said. “How’s it going?”

“I’ll tell you,” she said, after her initial shriek of insane laughter subsided. “I’ve been in this business for 25 years. I’ve seen ups and downs but I’ve never seen anything quite so volatile as this. It’s crazy.”

This made me nervous and I told her so. She then spent a few minutes reassuring me that my investment in spelt futures looked rock solid. “The State of New York, the City of New York and the Federal Government would have to fail in order to put you in jeopardy,” she said. What’s interesting is that this only made me feel marginally more secure. In the back of my mind, the collapse of our entire financial and sociological system, at this time, does not seem beyond the capacity to imagine. Still. It’s not happening today, I don’t think.

“In the end,” she concluded, “I think the stock market is going to come out just fine.” I listened for the sound of bubbling water in her hookah, but heard none. I voiced some doubt about her assessment. Her reply was somewhat unexpected to me, and I thought I would pass it along. True, she’s a broker. True, she works for a financial institution that wrote down the GNP of Australia this year so far. But she’s a smart person and doesn’t make any money if she misjudges the situation over a long period of time.

“We’re not going into a depression,” she said. “Yes, we’re in a very powerful recessionary cycle, but it will come to an end. And look at the bright side.”

“The bright side?” I haven’t really heard anybody mention that realm for quite some time.

“With fuel costs going through the roof, the cost of transportation of goods and people is becoming prohibitive. Instead of sending jobs to China, we’re going to be seeing a lot more jobs coming back here to the United States. The benefits from outsourcing to all corners of the world are disappearing. And that’s going to be good for our employment picture.”

I get that. When the world becomes a too-expensive place for corporations to operate, patriotism suddenly becomes good strategy again. And that’s good news for American workers. All we have to do is wait. We’re not too good at that as a nation, but I have a feeling it might not take too long. Which is reason for some optimism if, you know, we look on the bright side.

I woke up yesterday morning and found myself paralyzed. I lay in bed and couldn’t move. I didn’t even know what I was worried about, I was so worried. Eventually, I got myself up, shaved with trembling hands, and made my way to the office. I got to my desk and read the headlines. Then I really couldn’t move.

 A steely hand wrapped its skeletal fingers around my windpipe and would not let go. “Eek,” I said, since it was the only thing that would emerge from my ratcheted esophagus.

All day yesterday I sat here in a cold sweat. Now I figure, what the hey. I can’t be like this forever. Perhaps if I articulate what’s got me so freaky-deaky, it will pass. Or not. Either way, it’ll be better than this emotional and professional rictus.

Here’s my list:

1. Fannie Mae and Freddie Mac. I never really even knew how important Fannie and Freddie were, but their collapse, or even, like, if they got a cold, would possibly force the Federal Government to lose its credit rating. Think about that for a minute. No, on second thought, don’t.
2. The Bank of America: (BOA) Earnings were down. More losses are being reserved against. Deeply disquieting.
3. Other banks. We all saw what happened to Bear Stearns (BS) in two or three days. Once the whispering campaign got started, their goose was cooked. Now every day I hear from the newspapers and the online writers and the bloggers and the guys getting soup across the street and nobody has a single thing to say except, “What’s up with that billion/trillion/gazillion dollar bailout?!” How long before we all make it happen?
4. Saturated fat: Up until recently, I was pretty much saturated with fat. Now I’m less saturated, but I’m not completely unsaturated yet and I get a sense that if I don’t get there soon I may not have much longer to try. I got some ideas from Michael Pollan’s excellent book, In Defense of Food, which basically says we should “Eat food. Not too much. Mostly plants.” It’s sort of working, except I’m still working out whether vodka can be considered a food. What do you think?
5. Global warming: I don’t worry about it as much as I used to, because I have replaced 20% of my concern in this area with anxiety about Freddie and Fannie. I only have just so much capacity to freak out and then even I run out of resources.
6. Google (GOOG): I feel a little bit better now that their earnings were so impressive. But consider. If Google stops being the outer skin of the balloon, what else do we have to be inflated about? Things that have sort of gone by the wayside as a source of hysteria include: alternative energy sources, recombinant DNA therapy, cloning, robots, nanotech. We all need something to believe in, future-wise. What’s that gonna be?
7. Ben Bernanke: What’s he do for fun? What’s it like to be Ben? When you have a glass of wine at a party and Maria Bartiromo says, “How ya doin’?” do you have to think, “What will the impact be of my statement to Maria here, when all I’m really trying to do is get a smile out of her?”
8. China: Forget all the dubious stuff now under scrutiny from the nation, its army, arms dealers and toothpaste and heparin manufacturers. How about the reaction of the Chinese themselves to people and organizations that express opposition or even mild criticism of their various ventures? Boycotts! Censure! No more business for you! Sure, that’s their right, but a worldwide economic war between China and its allies and everybody else would be something to keep us all up at night.
9. The dollar: I can say no more.
10. Fannie Mae and Freddie Mac again. The article raises the specter of a trillion dollar buyout, which might drive the credit rating of our nation itself down a notch or even two. The pundits in the posting do say that such a thing is unlikely. But if it’s so unlikely, why mention it? Why scare everybody? When one knows the power of even the slightest negative wind to move markets and crash enormous battleships of enterprise? Why bring it up? Why put a headline on it? Why publish it at the top of the page?

You know what? When bad stuff happens, let me know. Until then, I’m going to try to remember some things: It’s spring. We’re alive. And bonds are still doing okay. I think.

Deaths from allergic reactions to the blood thinner heparin have risen to 62, up from 19 a month ago. This news, disturbing to just about everybody, was reported widely yesterday, and did not go unnoticed in the one sector that might find it reason for a bit of grim good cheer. This would be, of course, a newsletter aimed at personal injury attorneys, Personal Injury Lawyer America, a publication from the law firm of Lieff Cabraser Heimann & Bernstein, LLP. This goes to prove, I guess, that there is a silver lining for somebody inside of everybody else’s black cloud.

The active ingredient in heparin is derived from the inside of pig intestines, and is produced mostly in…

You guess where, given the situation as it now stands, with the global supply of this drug now possibly contaminated.

If you guessed China, you win a year’s supply of expired cheese food. Let’s look at where things stand in that regard:

• poisoned toothpaste
• poisoned toys
• poisoned pet food
• purloined movies, music, etc.
• bad air and water
• censorship of the arts and journalism
• Darfur
• Tibet

All that and the Olympics, too. I’ve heard it said recently that we are no longer in the American century, that the next 100 years will in fact belong to China. I suppose that’s good news for somebody. Other than lawyers, I mean.law.

Inflation in China is very high. It’s hard to figure how that will benefit us, but on a list of things that come under the rubric “grim satisfaction,” the continual travails of that sleeping giant always register. Bad air. Bad water. Poison in the children’s toothpaste they export. Dead dogs worldwide due to crud in the pet food they offer the world. The explosion of their chief internet provider built almost wholly on illegally purloined music from American labels… so while more rain on their parade is not really good news — particularly since it probably just hurts innocent civilians over there, it’s a laugh riot compared to the rest of the crop this morning. 

Credit Suisse, which today fired a bunch of their traders who misplayed some aspect of the mortgage crisis or other, leading to a modest, single-digit billion problem that will have to be managed this quarter. That’s sort of good news for UBS, which looked really deficient recently when it took a nearly $15-billion writedown. Perhaps they’re high-fiving each other over there.

Wal-Mart beat the Street’s expectations. Of course, at the same time they cautioned that ‘08 might not be the engine for growth that people might want it to be. Earnings came in at $1.04 per share for the fourth quarter and their stock lost four cents. Yeah, yeah, it’s rational.

The head of MBIA is out, replaced with a guy who thought he had retired. That’s always a good sign, except for the fact that people who come out of retirement are generally not as adept at bailout out the rowboat as they used to be. Still, a change will do them good, right? Or the illusion of change, which in our world is almost the same thing.

Let’s see… we’re getting down to some pretty slim pickins for those looking for a lift. Most people are not prepared for retirement, according to one study. That’s not good, especially for Gen-Xers looking to take over anytime soon. Even that new head of MBIA is 59. Where’s the new blood? Oh, I remember. In charge of risk management at the banks. Perhaps the world news offers more hope for the terminally optimistic?

Heidi Klum has offered to let Britney live in her house for a while, to help the ailing victim of celebrity back on her feet. That’s nice.

Bono was seen holding hands with Penelope Cruz in San Tropez. That’s like finding out that Al Gore drives a Cadillac Escalade.

And Castro resigned. That’s got to be good for somebody.

As we used to say, without irony: Have a nice day, everybody.

I say “dudes,” dudes, because I have noticed that, far from fading away, the use of surfer lingo in middle-aged business executives is flourishing. You haven’t really lived until you’ve seen a guy in a $2000 pinstripe, $500 wing tips and one hair artfully arranged on his shiny head say, “Dude, awesome weekend.”

My favorite comment of the day comes from M. Smith of Colber, Georgia (unless she’s M. Smith Colber, of Georgia), who reminds us that, behind all the headlines, all the business manuals, all the economic analyses of this supposedly rational sub-strata of society, organizational life continues in its eternal dance of madness and complaint.  She writes:

Wow, are you sure you’re not in Georgia? My boss takes the cake on bullying. I have gone home crying so many times that it is pityful. My boss can take you into her office and make you feel like dirt and then come out smiling and telling everyone that you are the best thing ever. She is insane. She picks on people for stupid little things that don’t even matter. She is a principal and she has 3 spies or like I call them (pawns) that run around and get all the dirt they can on people and run back and tell her just to get things started. There noses are so brown they look chocolate covered. She would never believe anyone over them, even people who have worked there for 30 years. She has a new lil spy now who she is treating like gold for this year. Just wait till next year and she will be in the same boat as everyone else. I’m just glad I found the articles on corporate psychopaths and now I know how to deal with her.

I’d be interested to know how M. plans to “deal with her.” And I’m hoping that our ongoing discussion of Crazy Bosses, and the requisite purchase of my book on the subject, helps smooth her way.

Beyond that, I’ll just say so long for now. I’ve got a lot on tap today. A subsidiary of a subsidiary of a subsidiary of ours has a product coming out of China that may have a few wrinkles to iron out. I can’t be more revealing than that, except to say that I have every confidence that our Chinese suppliers have operated with nothing but the most rigorous integrity in the matter.

Have a good day, dudes!

I want to thank all you guys for a terrific day yesterday. As one of you pointed out, I got up on the wrong side of the bed and felt the end of the world was at hand. Some of you agreed with me. Others didn’t. Still others were very jolly about the whole thing and WELCOMED the end of the world. I like that attitude. A special hats-off shout-out to the fellow who commented to a prior post and nominated Dracula as one of his favorite saints. Fangs very much.

But seriously, today is another day and the sun is bright and shining in the newly-minted sky. Actually, it’s raining here in New York and quite chilly, but you know what I mean. You can’t live your life in full awareness of Armageddon every day, right? Interest rates are coming down! Hedge funds and their managers are getting knocked around like whack-a-moles at a carnival. The truffles just came in to my favorite expense account restaurant. Life is good.

Maybe best of all is how America is snapping to, joining the rest of the world in its vital, highly-competitive, can-do, anything-goes spirit on the global playing field. In that vein, I would like to offer the first annual Mr. Cool Poisoned Toothpaste Award for Competitive Global Business Ethics to the banks and other lending institutions who are now foreclosing on the homes of defaulting debtors.

They win this soon-to-be coveted prize not so much for the foreclosures themselves, but for all the extra fees they are piling onto the future occupants of Chapter 11 who committed themselves to ARMs and are now falling down on their promise to pay the piper now that the piper has raised the interest rate on their mortgage.

In an article headlined “Borrowers Face Dubious Charges In Foreclosures” the fearsome Gretchen Morgenson of the New York Times writes:

“The amounts can be significant. 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. But these are not the only charges borrowers face. Others include $145 in something called “demand fees,” $137 in overnight delivery fees, fax fees of $50 and payoff statement charges of $60. Property inspection fees can be levied every month or so, and fees can be imposed every two months to cover assessments of a home’s worth.”

There’s much more. I highly recommend a thorough read of this one. It makes you feel that this great nation of ours can compete with anybody on the world stage, at least in certain things.

So buck up, everybody! There is no fate but what we make, right? And we’re making it every day. Have a good one.

1. When I wake up in the morning, the first thing I do is:
a) Make love to my spouse.
b) Lie in bed and think about the day ahead for a few minutes.
c) Grab my blackberry and check my email.
d) I don’t wake up in the morning. I wake up at night.

2. For breakfast, I generally like…
a) A muffin.
b) Eggs and bacon.
c) Whatever the guy I’m taking to at my power breakfast is eating.
d) Six cups of coffee and a Prozac.

3. At a business meeting, I talk…
a) 35 percent of the time. I think listening is important.
b) 50 percent of the time. I think give-and-take is what it’s all about.
c) 65 percent of the time. I’m there to get something done and I need to push it.
d) You’re beginning to get on my nerves.

4. I am angry…
a) Almost never. What’s the point? All that does is hurt myself and impede business.
b) Now and then. The world is full of buttheads.
c) A couple of times a day. I can’t help it.
d) Now.

5. Everybody has enemies, people who help to define you by the fact that you hate them and everything they stand for. How many do YOU possess?
a) None. What’s the point? All that does is hurt myself an narrow my list of potential allies and customers.
b) A couple. One died last year and I really miss having him around to hate.
c) I have a list of about ten or so people. Sometimes people drop off and make room for new ones at the top.
d) I have a couple of friends I don’t mind having dinner with. The rest of the world can go %*&# itself.

6. There’s been a lot of news about China recently, focusing on its business practices in a negative light — poisoned toothpaste, lead paint in children’s toys, tainted dog food and the like. What’s your attitude to that?
a) I think it’s kind of shocking, actually. How can people do such things, even for a profit?
b) I think it’s deplorable. Naughty Chinese! They should have their butts kicked.
c) I think you have to understand their culture. They’re in the beginning stages of capitalism, and this laissez-faire behavior is not unlike that which characterized, say, the old West. It’s every person for himself. Anything goes. They’ll come along and institute standards later.
d) We’d better get in there and take over their economy fast, before they do it to us. The rest is just bulls**t.

7. I love…
a) My family and my little schnauzer, Peppy.
b) My collection of antique pens.
c) The smell of restaurant bacon in the morning. It smells like victory.
d) The feeling I get when I have just humiliated my best friend at golf.

8. I would consider a person “rich” if they are worth…
a) The question itself is deeply flawed. Money alone cannot define wealth.
b) Ten million dollars ought to do it.
c) One hundred million dollars and access to corporate perks.
d) Twenty billion dollars, six houses, twelve cars, a bodacious spouse or two, six thousand virgin acres in Mexico, a personal 747 and the body of his enemy bricked up in his wine cellar. In fact, have you seen my wine cellar?

9. When I think about growing my company, I like to consider:
a) Responsible growth from within.
b) A balanced plan of acquisition and divestiture.
c) Acquiring my nearest competitor and merging our two great companies into one giant and unbeatable behemoth.
d) Buying everybody in my entire industry. Those who will not be bought must be driven out of business. All trace of the companies I acquire will be expunged from the earth! And I will reign supreme!! Hahahahahahahaha!!!!

10. When I die I would like be remembered as…
a) A good person who was loved by his friends, family and colleagues.
b) A talented person who made the most of his or her gifts.
c) A dangerous and scary person who kicked butt during his life and left a bunch of grieving people behind who revered him.
d) If anybody dies around here, it’s going to be you, Bud.

Give yourself 1 point for a), 2 for any b), 5 points for any c) and, of course, 100 points for any d) answer you might have found appropriate. Yeah, the scoring is screwy. But the truth is, either you’re a killer or you’re not. If you are, my hat is off to you, and my resume is in the mail to you.

If you’re not, I’ll see you for drinks some time next week, okay?

Capitalism is a hard system to learn. For a lesson in some developmental issues newly emerging free-market economies may face, it’s possible one may be required simply to think about China for a few moments.

Before we do, I hasten to state that all the parties involved in the issues I’m about to raise deny any wrongdoing and may, in fact, be totally innocent of anything other than bad marketing, bad luck or bad press.

But those who enjoy spotting trends and patterns in the chaotic world around us may at least pause for a moment at this conceptual kiosk.  

For a long time, it’s been clear that, when it comes to intellectual property rights, the Chinese are as communal as an ashram of Internet hipsters. The content belongs to the people. Right on. Like that.

Then came the whole tainted pet food thing, in which once again, it appears, subject to further investigation, a Chinese entity is implicated. Who would make the decision to ship a non-edible substance as a way of cutting down the cost of fabricating dog food? Someone lacking in judgment, perhaps? A mistake, possibly. A person under a lot of pressure to make the third quarter numbers, maybe? The kind of pressure we don’t know about over here, even on Madison Avenue?

Now today’s New York Times reports that Chinese authorities are investigating whether some companies there loaded a toothpaste meant for children with diethylene glycol, which is a component in antifreeze and is poisonous to everyone but cars. More than 36,000 tubes of Mr. Cool Junior in bubble gum and strawberry flavors have been seized by the Dominican Republic. Tubes found in Panama reportedly contain nearly 5% antifreeze. What could be the explanation for that? Someone who doesn’t know the difference between glycerine and diethylene glycol, a guy suffering from some rare form of dyslexia? A badly-communicated order to an underling striving to do six jobs at once? Interestingly, the Mr. Cool Junior has yet to turn up in the United States, having been sent at this point mostly to Latin America. So somebody was clearly thinking about distribution issues and possible consequences. Or maybe not. Sometimes, you know, it’s tough to keep things straight when you’re busy.

To their credit, the Chinese authorities in all cases are in the lead in all investigations, but it just makes you sort of wonder, doesn’t it?

Every business climate has its egregious miscreants. Here in the United States, we produce Lays and Kozlowskis and a foreign policy machine that seems to upset a lot of people around the world. The French sell just about anything to anybody willing to pay the price, and I’m not talking about mustard. The Russians put the occasional isotope in cream-of-mushroom soup and have passed a law legalizing certain forms of assassination on foreign soil. Africa is full of children killing children. So sanctimonious finger pointing is uncalled for.

Still… children’s toothpaste?