Posted by: graemebird | June 12, 2008

The Stock-Options Fractional-Fiat LOOTING-MACHINE.

How about this stock options racket our CEO’s pull?

If Gross Domestic Revenue was pretty static then you’d want to shower your CEO’s with stock options as part of the pay package. Since the stock options would be worthless unless he could increase the value of the company. This is supposing that stable money lead to reasonable pricing of the company. But even if stable money didn’t mean absolutely truthful and valid pricing of shares, just on the law of averages, the CEO really has his work cut out for him improving the value of these shares.

But if you have high and unstable fractional fiat, as a result, the share price is bound to jump way up high sooner or later. Whenever the share price spikes upward the CEO can exercise some of his stock options and make as much money as Ali made going the distance with Frazier. But the CEO can “earn” this money on the instant and for doing next to nothing.

The money supply is near double digit growth on average. This is not the case in 2008 where the Reserve Bank is grinding us into the ground. But nonetheless fractional reserve fiat lends itself to fast and unstable monetary growth.

And so its no trick to increase the share price. You would have to be pretty useless not to. And in sober reality these characters are for the most part a pretty ordinary bunch. Perhaps the sort of people who are both political animals, and the sort of characters who can close their eyes and sleep six hours straight and deep. It wouldn’t take a great deal more skills than the above.

When it comes to pay package and performance-based-pay these guys are akin to wealthy aristocratic twits who wind up getting their butlers tossing the ducks out of helicopters, by the ton, so that these blue-bloods can shoot more of them more easily. Shotgun pallets blasting out wide and these Pythonesque twits thinking they are doing a cracking job bringing down the ducks.

These CEO’s just make an absolute killing on these stock options because of COMPULSION-CASH and this funny-money counterfeiting racket.

Sol Trujillo walking away with 93 million dollars is in no way a reflection of the free market. His stock options would probably be almost worthless had GROSS DOMESTIC REVENUE  been stable during his tenure.

Therefore in the context of the monetary system we currently have, these stock options are one of the slipperiest looting mechanisms ever invented. And its not even a direct looting from the company involved. Because the fiat system leads to share prices generally being overblown 90% of the time. You pull a million tons of water out of a stormy sea sooner or later the water will come back pretty much to its former level. So it goes with the buying and selling of shares under inflationary conditions. The CEO isn’t really all that much looting the individual firm with these stock options because of that. Its really more of a slippery affair than that. Rather its the stock options CLASS, re-routing for themselves, part of the general upward flow of largesse, that the fractional reserve fiat system is causing. And this stock options business, is just one way amongst many, in which the fractional fiat system starts funelling up, vast amounts of loot to the already rich.

If it isn’t 100% backing its not Capitalism and it is not justice.

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Responses

  1. Larvatus Prodeo has a new competitor.

    Mark Bahnisch eat your heart out! There’s one blog redder than yours!

  2. Socialist money is not capitalism Jason.

    But your comment stays. On account of your seemingly total inability to understand monetary economics I cannot judge your comment to be a lie.

  3. Far out. My blog stats are running wild all of a sudden.

  4. No you are lying Mark. I didn’t say I was in favour of banning derivaties as you implicitly claim in your error and loathsome dishonesty.

  5. This anti-capitalist turn in your thinking is very distressing Mr Bird. Did I not say that your cousin was an ill bred rascal of bad influence? Now see how he corrupts your thought with this dastardly libel of some of our community’s best people?

  6. There is a bit of a paradox here Quartermain.

    What I’m saying is that under a more perfect liberty only the most productive folks would be pulling in the big money. We have a problem here, as I’m sure you’d understand, where the hired help has raided the wine cellar and even jimmied open the vault where the absent country gentleman ( his person distracted by undertakings of great moment) keeps his gold and silver bars.

    You see if you leave the gardener and the butler on the estate long enough, sooner or later the uppity devils start to imagine that it is THEY-AND-NOT-YOU who are entitled to the bounty that your estate has built up over eons of careful cultivation and breeding. And here I speak not of animal husbandry but of more human relations.

    Well this is what has happened in our private bloody companies. We have this free-floating population of high-powered-butlers, going from town to town, making a killing off of companies that they did not start, nor even build.

    There they are. A latter day Jeeves. A latter day Cadbury. Its “home James and don’t spare the horses.” But we find that James has sold three out of the four horses, and has multiplied his own earnings by virtue of leveraging, what he perceives to be the upward movement in the price of carriages.

    So here we have these itinerant butlers and house-servants. There they are raiding the assets of the company and the market more generally, like some errant herd-tester might raid your in-house brewery ,if you left him alone on the farm for too long a stretch.

  7. Perhaps you are right.

    I have witnessed a startling decline in quality among the businesspeople of my acquaintance. I have in mind the backstabbing curs for instance who have jumped on the greenhouse bandwagon, selling out their companies in the process. A very distressing development. We seem to be drawing on the same pool for our CEOs and our political apparatchiks.

  8. Exactly. A whole class of managerial song and dance men have arisen within our midsts. Ruthless and dishonest because they exist on high leverage. And all of them thinking exactly the same. Speaking exactly the same. In the past we used to pay some sort of homage to our rich eccentrics. But these guys would never entertain a creative eccentric in their midsts. Occasionally they will hire a Jack Welch or some up and comer of real quality. But that is the exception rather than the rule. And we really rely now on the occasional owner-manager like Steve Jobs or T Boone Pickens to drive things ahead.

  9. A whole class of managerial song and dance men have arisen within our midsts. Ruthless and dishonest because they exist on high leverage. And all of them thinking exactly the same. Speaking exactly the same.

    This book says exactly that. I think you’ll appreciate the thorough, methodical and deftly consistent work of the writer.

  10. Right. You may have noted that one of my first posts was whether or not Ralston Saul had a point. He’s frustrating to read because his observations are pretty good but he offers no solution. Giving one the impression that he’s a closet socialist with cures far worse than the disease.

    That quote above is highly exaggerated though. I’m talking more a slant than anything else. I’m not being absolutist about it. I was trying to get into the Quartermain spirit of things. So there is some hyperbole there.

  11. […] The Stock Options/Fractional Fiat LOOTING MACHINE.how about this stock options racket our CEO’s pull? If Gross Domestic Revenue was pretty static then you’d want to shower your CEO’s with stock options as part of the pay package. Since the stock options would be worthless unless he … […]


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