Donks intimidate CEO's over heal care debacle...

[danefan]

In this case probably just 1 quarter. But with charges are big as this in one quarter, a sneaky exec could make literally millions in stock option exercises after that correction occurs..........

I don't doubt your word on this stock manipulation idea, I just don't think it is the main point of either Waxman or the CEOs.

Perhaps not, but my point is there are questions about whether these huge charges are legit. Whether or not Waxman or Congress provides the appropriate forum to question them is an issue as the SEC should probably take the lead here.

[native]

It doesn't matter what the companies do. If they made a mistake in the charge offs, that mistake will be corrected in the normal tax cycle.

Waxman is way out of line. This is truly incitement to revolution and civil war.

Yeah, buddy, the country will rise up in support of the poor, oppressed, CEOs.

Jeezus, man, you need to get out a little more.....it isn't easy to be so out of touch.........

CEOs this week. Who is next week? Beware for whom the bell tolls.

[houndawg]

Yeah, buddy, the country will rise up in support of the poor, oppressed, CEOs.

Jeezus, man, you need to get out a little more.....it isn't easy to be so out of touch.........

CEOs this week. Who is next week? Beware for whom the bell tolls.

Oh I'm not disagreeing with that, nathan, but if you think anybody gives a fiddlers fart about the plight of the downtrodden CEOs, the guys who caused our system to collapse a mere 20 years after Soviet collectivism, and who became filthy rich in the process, you couldn't be more wrong. Well, at least not since you assured us that McCain's VP choice was a political master stroke which would swing the election in his favor. Any sympathy for those treasonous socktuckers can be found right where Drill Sgt. Cooper said it could be found: in the dictionary between shiit and syphillis.

[OL FU]

CEOs this week. Who is next week? Beware for whom the bell tolls.

Oh I'm not disagreeing with that, nathan, but if you think anybody gives a fiddlers fart about the plight of the downtrodden CEOs, the guys who caused our system to collapse a mere 20 years after Soviet collectivism, and who became filthy rich in the process, you couldn't be more wrong. Well, at least not since you assured us that McCain's VP choice was a political master stroke which would swing the election in his favor. Any sympathy for those treasonous socktuckers can be found right where Drill Sgt. Cooper said it could be found: in the dictionary between shiit and syphillis.

I don't think the issue is anybody giving a crap about the CEOs, but some people will give a crap that congress is trying to scare someone into giving a different answer purely for political reasons Regardless of the positions on health care, I would say so far this particular action stinks. Other facts may change my mind but I won't suppose like danefan is doing that the companies are overstating the charge in a material fashion (at least not yet). On the other hand if they are overstating the charge what is the likelihood that they are overstating enough to really make the conclusion different. If Caterpiller is saying the charge is $100M, then it is probably somewhere between $75M and $100M (these are estimates). Either way the point is the same. On this particular provision and just this particular provision, it cost money and possibly the loss of benefits.

[Baldy]

Yeah, buddy, the country will rise up in support of the poor, oppressed, CEOs.

Looks like you are falling in Waxman's trap. Its not about the CEO's, it's about the millions upon millions those people employ and take care of in their retirement.

[houndawg]

Yeah, buddy, the country will rise up in support of the poor, oppressed, CEOs.

Looks like you are falling in Waxman's trap. Its not about the CEO's, it's about the millions upon millions those people employ and take care of in their retirement.

Looks like you didin't read what I was responding to. Too busy rushing to the hatefest......

[Baldy]

Looks like you are falling in Waxman's trap. Its not about the CEO's, it's about the millions upon millions those people employ and take care of in their retirement.

Looks like you didin't read what I was responding to. Too busy rushing to the hatefest......

No, I clearly saw what you were referring to, but that doesn't matter when you have used lines like that or ones very similar in other threads. Seems that you love to dive into the hatefest head first usually...

[houndawg]

Looks like you didin't read what I was responding to. Too busy rushing to the hatefest......

No, I clearly saw what you were referring to, but that doesn't matter when you have used lines like that or ones very similar in other threads. Seems that you love to dive into the hatefest head first usually...

Oh baldy, baldy, baldy....ever the uncharitable one ....how sharper than a serpent's tooth........

[AZGrizFan]

I didn't mean to imply direct tax charge offs, df. ...or short term manipulations.

Whatever they are "charging off" for will self correct in the normal cycle of accounting, will it not? How many quarters can they successfully hide mistakes?

In this case probably just 1 quarter. But with charges are big as this in one quarter, a sneaky exec could make literally millions in stock option exercises after that correction occurs..........

Or, conversely, they assume the charges WON'T occur, they miss their mark, and they they're SOL, and looking for a new gig.

Pick your poison.

[danefan]

In this case probably just 1 quarter. But with charges are big as this in one quarter, a sneaky exec could make literally millions in stock option exercises after that correction occurs..........

Or, conversely, they assume the charges WON'T occur, they miss their mark, and they they're SOL, and looking for a new gig.

Pick your poison.

Or just estimate in good faith and let the market react in accordance with that. My feelings are totally unfounded in fact, and nothing more than a gut feeling, but this just smells rotten to me.

[AZGrizFan]

Or, conversely, they assume the charges WON'T occur, they miss their mark, and they they're SOL, and looking for a new gig.

Pick your poison.

Or just estimate in good faith and let the market react in accordance with that. My feelings are totally unfounded in fact, and nothing more than a gut feeling, but this just smells rotten to me.

So, they could very well be doing just that. Trust me, DF....from a CEO's perspective you'd much rather underpromise and over-deliver to your board and stockholders....

[danefan]

Or just estimate in good faith and let the market react in accordance with that. My feelings are totally unfounded in fact, and nothing more than a gut feeling, but this just smells rotten to me.

So, they could very well be doing just that. Trust me, DF....from a CEO's perspective you'd much rather underpromise and over-deliver to your board and stockholders....

I know, but there is a point where overestimating costs crosses into foul play, especially in a situation like this that is so speculative and easily manipulative.

[AZGrizFan]

So, they could very well be doing just that. Trust me, DF....from a CEO's perspective you'd much rather underpromise and over-deliver to your board and stockholders....

I know, but there is a point where overestimating costs crosses into foul play, especially in a situation like this that is so speculative and easily manipulative.

Agreed...but based on what's happened to the economy and many large players, better to by pessimistic than optomistic at this point. Many, many CEO's are runnin' scared at this point.

[native]

Or just estimate in good faith and let the market react in accordance with that. My feelings are totally unfounded in fact, and nothing more than a gut feeling, but this just smells rotten to me.

So, they could very well be doing just that. Trust me, DF....from a CEO's perspective you'd much rather underpromise and over-deliver to your board and stockholders....

Smells rotten? Jeez.

This is small potatoes for corporations of this size.

[danefan]

So, they could very well be doing just that. Trust me, DF....from a CEO's perspective you'd much rather underpromise and over-deliver to your board and stockholders....

Smells rotten? Jeez.

This is small potatoes for corporations of this size.

Small potatoes? CAT is taking a $100 million after tax charge in this quarter. That's ~10% of their annual profit.

[OL FU]

Smells rotten? Jeez.

This is small potatoes for corporations of this size.

Small potatoes? CAT is taking a $100 million after tax charge in this quarter. That's ~10% of their annual profit.

Curious, to what extent do you think they might be overstating? 10%, 25% 50%. As I said before, in my experience (which I will admit is limited to just a few companies) companies do take a conservative approach to items like this and to some extent for the reason that you are talking about. As I said before I would imagine the estimate for CAT is in the $75 to $100M range and they chose the higher and probably can substantiate based on conservatism. and it still wouldn't change Waxman's concern.

[danefan]

Small potatoes? CAT is taking a $100 million after tax charge in this quarter. That's ~10% of their annual profit.

Curious, to what extent do you think they might be overstating? 10%, 25% 50%. As I said before, in my experience (which I will admit is limited to just a few companies) companies do take a conservative approach to items like this and to some extent for the reason that you are talking about. As I said before I would imagine the estimate for CAT is in the $75 to $100M range and they chose the higher and probably can substantiate based on conservatism. and it still wouldn't change Waxman's concern.

I wouldn't at all be surprised to see them overstating by 50% or more. I've seen Big 4 firms do valuations for well-paying customers with a range of values from $0 to $1 billion (no joke). The customer gets what the customer wants. I don't see the outrage for asking them to substantiate their charge, even though I'm not necessarily sure it should be a member of Congress doing it. The SEC is probably the proper authority.

And BTW, while CAT was the first to announce the charge and the first that caught my eye, I'd be more concerned with AT&T's charge if I were looking at this. You know as well as I that when you start getting in the billion ranges, a few quick number massages can create huge differences.

[Baldy]

Curious, to what extent do you think they might be overstating? 10%, 25% 50%. As I said before, in my experience (which I will admit is limited to just a few companies) companies do take a conservative approach to items like this and to some extent for the reason that you are talking about. As I said before I would imagine the estimate for CAT is in the $75 to $100M range and they chose the higher and probably can substantiate based on conservatism. and it still wouldn't change Waxman's concern.

I wouldn't at all be surprised to see them overstating by 50% or more. I've seen Big 4 firms do valuations for well-paying customers with a range of values from $0 to $1 billion (no joke). The customer gets what the customer wants. I don't see the outrage for asking them to substantiate their charge, even though I'm not necessarily sure it should be a member of Congress doing it. The SEC is probably the proper authority.

And BTW, while CAT was the first to announce the charge and the first that caught my eye, I'd be more concerned with AT&T's charge if I were looking at this. You know as well as I that when you start getting in the billion ranges, a few quick number massages can create huge differences.

Plus I would bet that AT&T's retirement rolls are 10X the size of Caterpillar's, too.

[danefan]

I wouldn't at all be surprised to see them overstating by 50% or more. I've seen Big 4 firms do valuations for well-paying customers with a range of values from $0 to $1 billion (no joke). The customer gets what the customer wants. I don't see the outrage for asking them to substantiate their charge, even though I'm not necessarily sure it should be a member of Congress doing it. The SEC is probably the proper authority.

And BTW, while CAT was the first to announce the charge and the first that caught my eye, I'd be more concerned with AT&T's charge if I were looking at this. You know as well as I that when you start getting in the billion ranges, a few quick number massages can create huge differences.

Plus I would bet that AT&T's retirement rolls are 10X the size of Caterpillar's, too.

That is true but that doesn't necessarily mean AT&T is providing the same benefits to all of its retirees that CAT is providing.

All of these charges could very well be legit. But they could just as easily be BS too. They should be able to substantiate them with no problem.

[OL FU]

Plus I would bet that AT&T's retirement rolls are 10X the size of Caterpillar's, too.

That is true but that doesn't necessarily mean AT&T is providing the same benefits to all of its retirees that CAT is providing.

All of these charges could very well be legit. But they could just as easily be BS too. They should be able to substantiate them with no problem.

That's true

There are three things we know.
1) The law changed
2) Accounting rules require companies to ESTIMATE the impact and recognize it in the quarter the law changed
3) Companies tend to use the higher estimates for two reasons (a) they don't won't find out they low balled the number and have to increase their expenses in future years which is harder to explain than the one time charge and (b) their estimates are suppose to be conservative.

Everything else is supposition.

I will add one more thing we know.

Waxman wants these hearings because it is bad press.

[OL FU]

Curious, to what extent do you think they might be overstating? 10%, 25% 50%. As I said before, in my experience (which I will admit is limited to just a few companies) companies do take a conservative approach to items like this and to some extent for the reason that you are talking about. As I said before I would imagine the estimate for CAT is in the $75 to $100M range and they chose the higher and probably can substantiate based on conservatism. and it still wouldn't change Waxman's concern.

.

Valuation like beauty is in the eye of the beholder. I have been involved in many of them

We bought a large residential brokerage company in NYC (in fact at the time it was the largest). Outside appraisor valued the name at about 50% of the purchase price. Now the name was important but this wasn't Coca Cola. No way in hell That I could have turned around and sold just the name for $30M or I would have done it in a second

[Baldy]

That is true but that doesn't necessarily mean AT&T is providing the same benefits to all of its retirees that CAT is providing.

All of these charges could very well be legit. But they could just as easily be BS too. They should be able to substantiate them with no problem.

AT&T and CAT are only two of the companies reporting these projected losses. This Congressional subpoena also includes Verizon, 3M, John Deere, Valero, and AK Steel so far. If all these companies (and many many more) are reporting the same type of numbers, its a pretty good bet that these projections are legit.

Considering the average CEO of a big multinational corporation is about 10X smarter than an average Congressperson, Waxman has probably bit off more than he could ever chew.

[native]

Plus I would bet that AT&T's retirement rolls are 10X the size of Caterpillar's, too.

That is true but that doesn't necessarily mean AT&T is providing the same benefits to all of its retirees that CAT is providing.

All of these charges could very well be legit. But they could just as easily be BS too. They should be able to substantiate them with no problem.

Is your Beck tinfoil hat avatar some kind of bizzare "progressive" self loathing exercie?

A tin ear is what Obama and 85% of the Congressional demokrats have consistently shown to the 65% of the electrorate self-descibed as either Republican or independent. No matter what focus-group-tested populist crap you throw on the wall, and despite all your protestations, the vast majority of non-demokrats still understand that government is the problem, not the solution.

The more you talk, the less people believe you. Pretty soon there will be nothing left for the libs to scapegoat.

[kalm]

Of course there's also the argument that if you're a large corporation in the U.S. and you can't afford to provide healthcare, a living wage, and a dignified retirement for your full time workers, you probably should move to a country where you can...

[AZGrizFan]

Of course there's also the argument that if you're a large corporation in the U.S. and you can't afford to provide healthcare, a living wage, and a dignified retirement for your full time workers, you probably should move to a country where you can...

That's a stupid argument. What's your definition of a "large corporation in the US" that DOESN'T do those things?