CEOs know the difference between real money, pretend money and potential money

[Phoebe Loosinhouse]

There is all real money, there is potential money, and there is pretend money

REAL MONEY - it exists today and has a specific hard value:
Your bank accounts, cds and cash savings. It exists, it is what it is and you have access to it almost without restriction

POTENTIAL MONEY - things that have value, but depend on the presence of a ready willing and able buyer to purchase them from you:
Your paid off car, the equity in your house, your stock market investments, your collectibles, etc.

You think you know what these items are worth when you fill out your personal net sheet, but really, you don't know. They are worth what someone is willing to pay for them on any given day. You think your house is worth 500K but after listing it, you find the highest price someone is willing to shell out is 450K. So, 50K has to come off the balance sheet of what you thought you were worth.
Potential money is only an estimate until you actually convert it to real money.

PRETEND MONEY - things that only exists in a future sense or in a word, projections. The most ephemeral of all
The interest you might earn, what your house might be worth in 5 years, a future inheritance, etc.


Now, my major point is this. In all these Wall Street shenanigans, there did exist some actual real money. A big chunk of it was paid out to the CEO class, whether it was salaries, bonuses or golden parachutes. They got big bucks in checks that they cashed and took to the bank and put into their own accounts. They don't have to be too concerned with the potential money or the pretend money left behind in their corporations because THEY got the real thing.

THEY GOT THEIRS

Now that the implosion is hitting, it is in large part due to the suspicion that the book value these firms assign to their potential money assets is way too large. This is a big deal because they are supposed to maintain certain balances in order to be solvent or credit worthy, just like you do in order to get a loan from the bank. This is very sad for the shareholders and employees who had large sums, 401Ks, etc. invested in the company that is now swirling down the drain. The CEOs are sad too, but not quite as sad, because why, boys and girls?

THEY GOT THEIRS

And now they can just walk away from the rubble of the companies that they left behind for the taxpayer to sweep up.

[sam sarrha]

1. that's why they always run off with all the "REAL" money..

[Phoebe Loosinhouse]

2. The CEO of Lehman earned 45 million dollars LAST YEAR

http://www.nytimes.com/2008/09/18/opinion/18kristof.html

Need a Job? $17,000 an Hour. No Success Required.

By NICHOLAS D. KRISTOF
Published: September 17, 2008
Are you capable of taking a perfectly good 158-year-old company and turning it into dust? If so, then you may not be earning up to your full potential.

You should be raking it in like Richard Fuld, the longtime chief of Lehman Brothers. He took home nearly half-a-billion dollars in total compensation between 1993 and 2007.

Last year, Mr. Fuld earned about $45 million, according to the calculations of Equilar, an executive pay research company. That amounts to roughly $17,000 an hour to obliterate a firm. If you’re willing to drive a company into the ground for less, apply by calling Lehman Brothers at [phone].

That's what he took home at a time when he MUST have known his company was going down the tubes. This is what I am talking about.

[RaleighNCDUer]

3. Know any good carters?

It's about time we saw tumbrels in the streets.