GREED

Greed

In the high-powered World of CEOs, avarice isn't necessarily a vice. But in the extreme, cupidity leads some execs to cook the books, take extra risks or simply refuse to pay their own way — and that has led more than a few to jail.

Still, excessive greed can mean big trouble if it leads to big offences — say, cooking the books to the tune of billions of dollars — or small, like refusing to take a stock loss.

The punishments can be harsh — lost wealth, fines, jail time — which might make you wonder why a CEO would risk a job that already pays millions. But greed isn't necessarily about the money. Experts say it's frequently driven by a need to keep score, delusions of grandeur and a sense of entitlement, or, at the other end, by an extreme need to compensate for a poor self-image, or even by boredom.

Greed is hard to define, so it's impossible to come up with a list of the "greediest" chief executives. But here's a look at some of the biggest and most notable examples in recent years of CEOs who earned a lot but were brought down by the desire for even more. And caught up and got focused under the law.

Fall of Enron (Utility Co), Jeffrey Skilling served with jail time, John Rigas of Adelphia (Cable Company) also served with jail time along with his son, Dennis Kozlowski of Tyco, Bernard Ebbers of WorldCom, Bruce Karatz of K B Home, Samuel Waksal of Imclone, Richard Scrushy of Health South, Michael Saylor of Microstrategy, Fine of 550 Million Dollars of Goldman Such for fraud Charges (a Financial Brokerage Company), Bear Stern (Financial Brokerage Company), and Jail time for Martha Stewart, and so on. Those and several other frauds, including Mortgage Companies (major was Ameriquest) all happened just before the crisis of 2008.

In recent times, financial crisis and frauds happened in all over the world; time and again. In Europe, particularly Germany happened some years ago. In India, the case of Mehta was a big one which involved big banks including some U.K. banks operating in India like Gridley etc.

In case of greed and Corporization, we have gone so far and are used to the unethical business practices of Corporate America (and elsewhere) as such that those business practices are common everywhere and we call those, as business tricks or the way business should be done. For example take the scenario of Life Insurance and other Sales Oriented Companies; sales practices. Life Insurance Companies hire sales agents on commission basis only. If the agent makes sale, he/she is paid, otherwise overhead expenses he/she would be paying from his own pocket, as most of the sales people do the same, who are involved in other sales oriented Companies too. Not only the sales person does not get any income, s/he should be paying License fee, transportation (to visit clients) and other over head expenses as well, from his/her pocket. That is beside the time and energy s/he has to put to study, take test and get the license. This is called that “sales person is developing his/her own business“. So s/he has no choice but to lie, in order to make sale. On top of that the employer pushes him/her hard to make the sale. This type of scenario happened in the year 1997. A sale’s agent of Sun Life Insurance Company had sold an Insurance policy of one million Dollars on fake promises and hand out the documents to the client. When the market was flat and the client received annual statement from the Company, after a few years later. Statement was different than that it was promised. Eventually, he turned to Court of Law, and the Judge ordered the Company to pay the client as were promised. Not only to one client, but to all the policy holders of the Company.

Look at the On-line Survey Companies; they pay participants in different ways i.e.: gifts, donation to charities (some participants donate their points rewards to charities) and cash, but the points and the reward system is low in value. At the time of recession some people do for small amount of cash anyway. I saw a friend of mine was registered with some of survey companies, and was taking surveys for the offer of 15 - 20 minutes of his time for reward of $ 0 .50 to $ 1.00 - $1.50. Some surveys offer 30 - 40 minutes time of survey for $2.00 - $3.00. Of course there are good companies too. As they promise, so that the rewards are reflected in the account. He showed me a couple of Companies tricking on so minute amount that you might wonder, how could it be possible that a company staff/manager sending you polite and formal e-mails every day inviting you to take the survey, with the promise of rewards, and at the end it turns out the other way. If you look at the web-sites, layout and features over the page of their web-site and the technology etc you think that every thing is in good order, but to my surprise manipulation and tricks. For example with the offer of 10 minutes of time, 50 points reward (equal to $ 0.50) is offered. It takes your time for more than 30 - 40 minutes and at the end there are no points. You will see on the screen like this: “thank you very much for your participation and opinion, you will be entered for monthly/quarterly sweepstake of prizes for a chance to win such and such amount (thousands of Dollars). How could you believe on sweepstakes that take place in your absence, for thousands of Dollars ($ 3,000.00 - 5,000.00 to $ 10,000.00) when you are desperate to accumulate enough points for eligibility to cash out some money? Minimum pay is $ 10.00 to $ 20.00 and with some Companies that minimum is $ 50.00. Some of your surveys are credited to your account, but most of them go for sweepstakes. You should be taking surveys for months and may be up to a year, in the hope of that that you will get some cash at the end. Some of those companies never pay even $ 10.00 but you had put hours of hours of your work for over months and months, and at the end you get nothing.

Individual is helpless most of the time, in this society of corporization rule. Most of the time, people avoid disputes, for which they are over charged on monthly bills of some of the service companies or over a dispute with a retailer or a service provider. If you have a tiny dispute with a big or small company, what are you going to do? Yes, there are agencies and authorities that take your concern and complain. Authorities take the problem in consideration, when at least there are a lot of complains or the problem has gotten very serious over the time. They take their time to look at the problem and investigate over the issue, for a very long time. If you are lucky, and you filed your complain or concern at or near to their decisive time, your complain is heard, otherwise you have to wait. If it takes too long, then you have no choice but to forget it. If the concern is big for you or serious at your particular situation; you suffer, and no body knows or cares about. Some people do fight for even a small amount or over a small issue (it may be big for the concerned person), but who cares. That is your problem. I agree that their voice is heard at last, but at what cost? The underline individual is exhausted of his/her resources (money, energy, stamina, time etc), much more than s/he gets in return for his/her legitimate right.

Cable, telephone, cell phones and other companies continue on over charging and over billing, customers regularly. Recently, there was a report on over billing of fitness and health clubs (Canadian TV Channel January 2011). Bills are set up in a complex formatting. Most of those are not simple (those could be simple), those are made complicated intentionally, that you and I, either don’t understand it or it takes a lot of time to read on and analyze it. “Fine Print”; that is the business language. That is another trick of business, which is more common.

We come across the situation every day during our needs for daily day to day life necessities, to buy a product or a service. You will realize or discover, that there is a trap every where you go. Of course there are honest and fair deals, but a few.

Sales people (as we mentioned above) either in Life Insurance or some other sales positions, mostly leave after some time (or forced to leave, as they can’t make enough sales to be eligible to be employed by the company any more). They leave the company with lots of complexes and tons of negative thoughts. Guess, how much s/he has promoted the underline company, during his/her employment over there. In corporate rule, real achievement performs an individual for the underline company, for instance make an innovation, invention or an idea that gets big returns, but the credit goes to the company and all the benefits remain with the company for ever. If you are a CEO or in some other high position, you are paid (or over paid) through high salaries and big bonuses but the ordinary employee is left at the bottom. Some of the times, lower position employee’s efforts are turned around to higher position people.

Odd Folks:

If corporations are really like that, we might wonder about the people who work in them. Tens of millions of regular folks work in corporations, of course, which give them the surface look of well fed average ness. But because of their aggressive business agenda, they also attract some odd personalities.

Global effects of Greed

As we discussed before (here and other blogs) about globalization and the greed factor of mankind, that was equally spread all over the world. At the same time period, crisis comes up in Spain and other European Countries too. More are coming. Meltdown of Dubai Real State and this type of sad news continued on. Greed factor has not only influenced individuals and Corporatist but also catch over to the Governments and big Public Institutions: Dubai Sheikh Mohammed implemented big and huge projects of Real Estates, including Theme Park Project, and was dreaming to turn Dubai into the world first and foremost center in almost every aspect, including turning it into the World Financial Center. The world tallest building (Burj Tower) is now in Dubai, The world largest and luxurious seven star hotel is in Dubai. Sheikh Mohammed spent 800 million dollars on Metro System of Dubai. Recently (as of October 2010) Dubai Authorities have finished the building of the world most advanced and largest Clock; that will be replaced by Greenwich Clock of England, and will run on Dubai’s Time. Sheikh Mohammed allowed public and foreign investors, individuals and everybody to invest and build/buy/sell commercial and residential real estate in Dubai. Dubai Real Estate Market was in boom and the prices were going up by leaps and bounds. Investors, Companies and individuals from almost all over the world; from Far East, East and Middle East of Asia to European and North American Companies and individuals bought real estates for intention to sell back for profit and never occupy. The result, hundreds and thousands of offices and residential apartments, buildings, bungalows and houses etc unoccupied and unfinished, remained on Dubai’s surroundings. And the bubble bust, prices got down steeply. A huge financial crisis emerged; people lost billion of billion dollars. Dubai Government fell into deep crisis, Sheikh Mohammed relative, Amir of some other Arab Country come to refuge Sheikh Mohammed. There is still a big trouble there.

In meanwhile, I would like to mention not to forget the big tycoon in financial markets play. Prince Walled of Saudi Arabia. He has big investments in The United States of America, all across the Stock Markets, in big companies and banks like Citi Bank and other investments like Fox TV Channel etc. He is one of the top richest men in the world. He has big personal private 747 jet. He has built a palace plated with silver for him.

Have a look at Morgan Brennan study:

When the U.S. economy was riding high for most of the 20th century, it would have been impossible to imagine a foreign city--especially one in a Communist country--with more of the planet's very richest than New York, home of old-money Wall Street. But that indeed is the case. Today Moscow is the city with the most billionaire residents in the world.

The Russian capital boasts 79 billionaires, a stunning increase of 21 in just one year. That more than edges out No. 2 New York, with 59 billionaires, and No. 3 London with 41. Other cities in the top 15 include such rising stars as Mumbai, Taipei, Sao Paolo and Istanbul. Los Angeles manages a tie for No. 8.

The combined fortunes of Moscow's billionaire population top $375 billion, more privately amassed wealth than in any other city in the world.

Despite New York's relegation to second place, the city remains a favored locale of billionaires, whose collective net worth is $221 billion. The Big Apple boasts some of the most expensive ZIP codes in the U.S., due in part to the real estate prices paid by billionaires in this city. Indeed, many Moscow residents own secondary homes in New York, including fertilizer and coal magnate Andrey Melnichenko, whose wife recently closed on a $12.2 million penthouse apartment. Even the world's richest man, Carlos Slim (home: Mexico City), snatched up a $44 million mansion on Central Park last year.

To compile our list, we tallied the primary residences of all 1,210 billionaires on the 2011 Forbes World's Billionaires list, our annual assessment of people sporting seven-figure or higher fortunes in U.S. dollars. We did not take secondary homes into account for this list.

In the U.S. we stuck strictly to city limits. For example, while a smattering of prominent media barons like Viacom founder Sumner Redstone and T.V. tycoon Haim Saban reside in Beverly Hills, they are not included in the pile of Los Angeles residents since Beverly Hills is its own city (although largely surrounded by Los Angeles).

Here are the the world's five top cities for billionaires:

Istanbul, Turkey scores No. 5.

Number of Billionaires: 36

Total combined wealth: $60.5 billion

Billionaires include: Turkey's richest person, Mehmet Emin Karamehmet, chairman of mobile phone company Turkcell; Turkey's former richest, finance and retail scion, Husnu Ozyegin; and Macedonian-born Sarik Tara, founder of construction giant, ENKA.

Hong Kong scores No. 4.

Number of Billionaires: 40

Total combined wealth: $176.8 billion

Billionaires include: Greater China's richest person, Hutchison Whampoa chairman Li Ka-shing; the Kwok family, the brothers behind Hong Kong's largest real estate developer, SHKP; and Angela Leong, the controversial heiress of Stanley Ho's casino empire.

London scores No. 3.

Number of Billionaires: 41

Total combined wealth: $164.3 billion

Billionaires include: Indian citizen Lakshmi Mittal, the world's sixth-richest man thanks to steel-maker ArcelorMittal; daredevil Virgin founder Richard Branson; and Philip & Christina Green, the married couple behind clothing company Topshop.

New York City scores No. 2.

Number of Billionaires: 59

Total combined wealth: $220.8 billion

Billionaires include: media mogul and current mayor Michael Bloomberg; fashion designer Ralph Lauren; and real estate developer-turned-reality T.V. celebrity Donald Trump.

Moscow scores No. 1.

No. 1: Moscow

Moscow scores number one. Compare to the time; when Red Army was there in Afghanistan (in 1980s), some Russian soldiers break open a shop in Kabul (Capital of Afghanistan) just for American Ci-garrets in Curfew time at night. There were some stores with expensive merchandise in the surroundings but they broke open the store with Ci-garrets and looted only the Ci-garrets, which were visible through the glass window of the store.

Look at China; China for the Olympic Games of past three four years back from now, constructed modern, big and huge projects along with other infrastructure and projects for modernization of Chinese Cities including Beijing, and built Olympic Village. The construction was started several years ago. Not only China was in full swing of construction and modernization but also the same activity was in full swing in the rest of the world too. From India, Indian sub-continent, Countries surrounded by China, Middle East, particularly (with surplus money of Oil; Crude oil was selling up to 147 dollars a barrel), Russia and former Soviet Block Countries like Check, Selvac (former Czechoslovakia), Hungry and Rumania etc which were in need of modernization of infrastructure, they all started constructions everywhere. South American Countries were busy in construction as well; which are rich in Minerals, Mines and other Resources, and they had also surplus money. That all caused a huge demand of Metals and infrastructure materials and other related products and services. There was a big boom of economic and business cycle as well as in other economic activities. Therefore the supply side was not enough to cope with such a big demand.

Boom and Bust

On the other side while there was boom time, demand for every thing was high and investors, companies, individuals and traders all jumped in (the greed factor) and bought every thing from Metals, Resources, Oil to Houses, Apartments, Lands, Cars, Jewellery, Furniture to unproductive items like Arts and Artworks. Oil touched $ 147.00 a barrel, two year back it was around 32-40 dollars, some time before it was as low as 18 dollars but for some years it remain around 20-22 dollars. The entire resource sector from oil to Copper, Steel, Iron and etc all prices got to the roof.

Competition emerged between the Stock Exchanges and Governments as we discussed over the Dubai case. Competition between New York and London Exchanges were also emerged. In United Kingdom (U.K.) England, power with the labour party and Tony Blair as Prime Minister, formed a Committee “Financial Services Authority” (FSA) to introduce and regulate innovative financial products. Here in Unite States, Allen Greenspan said “Its time to deregulate”. There were innovative, sophisticated, exotic products (derivatives) everywhere, spread all over the globe. United States of America and United Kingdom were also competing over acquiring or making partnership with the Hong Kong, Bombay and other major exchanges and getting themselves to the position toward the international financial supremacy and global investment attraction. Between 1997 unto 2010, there was an increase of 37% of entries of new Stocks/Institutions at London Stock Exchange. This also contributed to the recession along with other factors.

Though roller coaster rides in Stock markets are not uncommon. But the ride of NASDAQ that touched 5000 mark at the Christmas of 1999 was most probably caused by the Corporate America and were based on the factors discussed above (including frauds, lies, over inflated profits, and over inflated financial statements etc). Though there was some contribution of the so called Millennium Bug that the related technology stocks of those companies that benefited from, were gone too high but when the situation was forced to reality check, the NASDAQ was down as low as around 1000 mark, in a very short period of time. And subsequently, happening of the tragedy of 9/11 and thereafter unveiling of frauds, sub prime mortgage crisis and etc as we mentioned above, all those caused recession. And this recession is so severe and long and is still prolong due to Greek, Spain and other European Countries; recent (2010) financial crisis (as we discussed above) as well as due to other factors, that are in play at the current situation of the world. And who knows how long it will take to end the recession.

When the Olympic Games end in China, China was expecting that the Chinese public from urban, rural and suburban side of the country would come to visit the Olympic village and enjoy the theme park rides and luxurious facilities. Nevertheless, no body turned, as there was already recession started. Chinese public is conservative by nature and hard working too, especially rural China; where wages are too low.

In 2008 and 2009 the world economy suffered the deepest global financial crisis since World War II. Countries around the globe witnessed major declines in output, employment, and trade, and world trade volume plummeted by more than 40 percent in the second half of 2008.

China is also a big play in the financial markets of United States of America; invested heavily in the U.S. treasury bills. U.S. is in a huge deficit and if China sells its treasury bills, U.S. Government is in big trouble. Not only the Government but also public; U.S. may go into double recession to great depression and taking the whole world along with itself to great global depression. Canada may suffer the most because most of its export goes to U.S. If the United States of America is in recession to whom should they sell the products and resources?

China will not sell its treasury bills, because what China will do with that huge surplus amount of money, where to refuge that. China can not find such a secure place like U.S. Government to put their money. Plus China is getting millions of dollars of interest on its treasury bills. If the United States of America goes into recession, to whom should they sell their products and merchandise? If China does not export, China could not survive, will collapse immediately, because of mass population involved in the production of the products and merchandise they export to the U.S. What to do with those huge and big factories that already exist in China.