HermannM

Posts Tagged ‘responsibility’

The Curious Case of Michael Vick

In Interesting on July 21, 2009 at 10:37 pm

This article was written by Lorenzo Chambers, an outstanding tail-back for Dartmouth College, a 2-time recipient of All-Ivy honors and a former member of Team Armani, an American-style football team in Milan, Italy.  Since retiring from professional play, Lorenzo received a NYC Teachers Fellowship to study education; he is currently the Principal at an elementary school, where he inspires young minds to dream beyond the limits society places on them.

In addition to being a fellow NFL enthusiast and Wednesday morning quarterback, Lorenzo is a college buddy and lifelong friend.

—————————–

Today is Monday July 20, 2009. I am sitting in a sports bar watching ESPN Fan Nation when the hosts announced the end of Michael Vick’s criminal sentence. The topic discussed was “Should a team hire Michael Vick as their quarterback?”  Both hosts agreed that teams should not take a chance to hire him because he is a marketing nightmare and his ability to lead as a quarterback is questionable. In support of their second argument, they insisted his talent and skills are diminished and his judgment is questionable given his involvement in the dog-fighting scandal.  The following are my thoughts on the matter:

  • Didn’t he just finish serving the sentence for his participation in this crime? If so, it’s over!  I thought the point of a jail sentence was to punish him for his crime. It shouldn’t be a life sentence with no chance to work again. If that’s the case, he shouldn’t have served a jail sentence – just tell him he can never play professional football again.
  • Here’s a free consultation to Vick’s advisors. Regarding the PR/marketing nightmare that your client presents, do not attempt to spin the story. Michael Vick should do two things. First, he should go on a tour to every NFL team that will meet with him and own up to his responsibility. In a face to face meeting with owners, general managers and coaches, he should say that what he did was horrendous, he accepts full responsibility, he regrets it and that it will never happen again.  Next, he should explain why he did it. Where he is from in Virginia, people, especially his family members and friends are poor; they have had to resort to non-traditional sources of income and dog-fighting has been a viable means of earning a living for generations.  It is akin to cock-fighting in some South American countries. This doesn’t make it right but that is the truth.  Because he is wealthy, he felt responsible to provide a way for his friends and family to earn a living. In doing so, he made the wrong choice to not only subsidize their endeavor but to participate in it.  He should say that it will not happen again because the cost of what he did was too high a price to ever pay again in terms of how he has spent the last few months of his time on earth and because of the real possibility that he may never get to do what he loves to do, play football, ever again.  Also, he should say that he is now strong enough to say “No!” to friends and family members who do not have his best interest at heart. I am sure he has no doubt that real love doesn’t mean doing things that put you in jail. Secondly, he needs to go on a national television show, something like 60 Minutes and say the same things.
  • To the people who would condemn Michael Vick to a ban from the NFL for life, where is your compassion for your fellow man? Where is your self-reflection to be redeemed from your own demons?  And what about the hypocrisy that is part of the American way?  For example, why is it okay to hunt deer and bears and whatever other animals that people hunt but you can’t fight dogs?  An argument could be made that at least the dogs had a fighting chance versus the defenseless animals that get shot (for commentary | click here). The point is cruelty to animals should be prevented for all animals.  It can not be selective in nature. Don’t kill the whales, don’t shoot animals for sport, don’t fight dogs.

In the final analysis, the fans on ESPN’s Fan Nation voted 50-50 that teams should take a chance on Vick. I’ll take those odds any day and Michael Vick should get that chance as well.

————————————————————————

I AgreeI Disagree | I’m Not Sure

Advertisements

Why Good Mortgages Go Bad

In Finance, Lifestyle on March 21, 2009 at 11:27 pm

There was a time when the banker who approved a loan was the banker who opened the account, handled deposits, accepted the payments and issued a handshake when the debt was retired. Those days have long gone.  With the advent of teller-less transactions and electronic transfers, the movement of money has become so fast that nobody can afford the time to get to know you anymore. The bank on Wall Street whose tagline was “The right relationship is everything” was a liar.  That statement couldn’t be farther from the truth, because there are no relationships in the financial sector anymore.  Everything is a transaction.  And this, my fellow Americans, is at the heart of our financial problems today.

Specialization of duties was supposed to improve efficiency in the banking sector. But instead all it did was add complexity to a system that was already hard to understand. The pace of financial innovation was too fast for even the smartest and brightest of accountants and financiers.  Sufficient checks and balances were never put into place and this vacuum of mutual accountability is what allowed the barons of greed to corrupt America’s once proud banking infrastructure.  I do not envy the challenges faced by Tim Geithner; he carries a heavy load.

There are so many moving parts that comprise a loan transaction.  While no one entity was responsible for creating the house of cards, an attitude of indifference at all levels was absolutely responsible for tipping it over.  In any mortgage transaction, there are even more moving parts and the risk of system collapse was greater which each successful transaction.  Everybody was making money and no one thought to ‘slow things the fuck down’ because they assumed some other entity would do it instead.

America’s financial collapse was a creation of our own undoing.  While it is easy to point to Bernie Madoff or AIG for the failures of the system, their trepasses don’t scratch the surface of what is at the heart of the problem.  We are the problem. We, you and me, can at times be our own worst enemies. Until we take a good look at our contribution in creating the monster, there won’t be anything Secretary Geithner, President Obama, Sarah Palin or Rush Limbaugh will be able to do to save us from ourselves.  So where shall I start? The following is my list of culprits and the reasons they are in desperate need of an attitude adjustment.

  1. homebuyers, especially the snot-nosed yuppies who want what they want, when the they want it and at any cost.
  2. the friends of homebuyers, who compete socially with their friends and one-up each other, resulting in peer-pressure to buy more house than they can afford.
  3. mummy and deddy, who spoil their kids with down payments for houses instead of teaching them the value of savings, trade-offs and deferred gratification.
  4. real estate brokers, who create a false sense of scarcity and urgency to drive up the values of homes and ultimately increase commissions.
  5. renovation contractors, who underbid to get a job then underdeliver until the promise of more payment is made from the proceeds of an unnecessary second loan.
  6. mortgage brokers, who steer borrowers into loan products, some of which may be unsuitable.
  7. home appraisers, whose payments are made by the mortgage brokers and lenders and whose compensation volume is tied to successful loan placements.
  8. boiler room telemarketers, who targeted the elderly with 30 year cash-back loans as a supplement to an underfunded retirement and social security.
  9. local governments, who don’t investigate local corruption because of the additional tax income generated by a corrupt system.
  10. lenders, who sell approved loans into a secondary market and bare little, if any, of the risk for the ones that go bad.
  11. subprime lenders, who compete with traditional lenders for traditional mortgage clients by offering ‘too good to be true’ teaser deals which end up being just that.
  12. moneycenter banks, who set up single-purpose corporate entities that package the loans into a new financial instrument that gets resold into a tertiary market.
  13. financial engineers, who bundle the new financial instruments with cute ‘tricks’ like credit enhancement, over-collateralization and tranches as a portable hedge against risk.
  14. insurance companies, who sell a credit enhancement product but don’t set up internal controls to limit exposures, monitor performance of the product or hedge the impact on the rest of the organization
  15. re-insurance companies, who use one financial ‘trick’ to hedge the risk of another financial ‘trick’ not realizing that, as a result of their being 4x removed from the original transaction, they’ve inadvertently doubled or tripled down on the same risk.
  16. rating agencies, whose investment-banker-wannabe underpaid salaried staff can’t tell the difference between a true credit enhancement and ‘lipstick on a pig’
  17. television networks, who canceled classics like One Day at a Time, Good Times, Alice & M*A*S*H in favor of aspirational shows like Dallas & Dynasty, effectively shaming the ‘have-nots’ for how little they actually have.
  18. financial regulators, underpaid, understaffed, underfunded beaurocrats who are  underinformed as to the newest financial innovations on wall street
  19. legislative overseers, who are as financially illiterate as homebuyers
  20. legislative aids, who spend less time on policy and governance issues (despite Ivy League political science degrees) and more time on raising funds and getting their boss re-elected so they don’t have to go into the private sector and ‘get a real job.’
  21. hedge fund managers, who think their Harvard & Wharton MBAs render them invincible so they start their own firms and lure investors by promising a higher return than is statistically possible, ceteris paribus.
  22. Robin Leach, whose Lifestyles of the Rich & Famous showed the ‘haves’ in America how little they actually have.
  23. hedge fund investors, who aren’t satisfied with the consistent 8% returns of the equity markets yet miraculously expect to achieve higher returns without higher risk.
  24. financial media, who are journalists at heart but eventually succumb to the market’s incessant demand for entertainment over information.
  25. lifestyle media, who stimulate demand for house and home products by encouraging a sense of entitlement while understating the responsibilities of homeownership with programs like ‘Extreme Home Makeover’ and ‘Design on a Dime.’
  26. real estate speculators, who played a game of hot potato by entering into ‘no-money-down, interest-only, balloon payment’ exotic (read toxic) loans but mistimed the market, abandoned the property, left the banks holding the bag and then pointed the finger at government-sponsored working class homeownership programs when the crisis was made public.
  27. people, who believe everything they see and hear, then act on what they believe; all without applying a scintilla of common sense or asking someone who knows better.
  28. Other _____________________________________

I can’t stress it enough. America’s financial collapse was a creation of our own undoing.  While it is easy to point to Bernie Madoff or AIG for the failures of the system, their trepasses don’t scratch the surface of what is at the heart of the problem.  We are the problem. We, you and me, can at times be our own worst enemies. Until we take a good look at our contribution in creating the monster, there won’t be anything Secretary Geithner, President Obama, Sarah Palin or Rush Limbaugh will be able to do to save us from ourselves.