Weekly round-up of business and idiocy news

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Goldman & Citi have Swine Flu vaccine, do you?

In the event of revolution I have some thoughts about who to put up against a wall.

Some of New York’s biggest companies, including Wall Street giants Goldman Sachs and Citigroup, received doses of swine flu vaccine for at-risk employees, drawing criticism that the hard-to-find vaccine is going first to the privileged. [emphasis added]

That’s not criticism, that’s a statement of fact.

New York city defended its actions by saying that distributing large doses of the vaccine to such businesses is "a great avenue for vaccinating people at risk." ASTERISK/FOOTNOTE: And by people at risk we mean those who are rich and have health insurance. I’m not sure what the risk is here, but I’d like to have some.

This event has revealed a previously unsuspected gift for irony at the Centers for Disease Control and Prevention. The CDC responded to this by saying any decisions that appear to send vaccine beyond high-priority groups "have the potential to undermine the credibility of the program." You think?

Goldman, Citi, et al, got the vaccine because they have their own doctors. Before getting the vaccine, doctors at these companies had to agree to only vaccinate high-risk employees. (wink, wink, nudge, nudge) And I am sure they are doing just that and ignoring any VIPs who ask for it and could have them fired.

It is nice to know that at least one of the firms who have received billions in tax dollars has spent some of that on competent PR people. While Goldman Sachs kept its 200 doses and Citigroup kept its 1,200, Morgan Stanley turned over its 1,000 doses to local hospitals after finding out they had not yet received any vaccine.

I realize our government is a corporate whorehouse, but would it mind at least pulling the shades down over the windows?

Related story:

CALGARY, Alberta (Reuters) – Senior health officials in the Canadian province of Alberta said on Wednesday they had fired an unidentified worker for giving National Hockey League players preferential access to the H1N1 flu vaccine. The controversy boiled over this week when it was revealed that players for the NHL’s Calgary Flames and their families received shots on an exclusive basis one day before the province closed public flu clinics due to a shortage of the vaccine.

Remember: Before getting the vaccine, doctors at these companies had to agree to only vaccinate high-risk employees. (wink, wink, nudge, nudge)

Even with funny money banks refuse to take California IOUs

The name of Disney’s California Adventure park seems to have taken on ironic overtones of late. The WSJ reports:

iou A group of the biggest U.S. banks said they would stop accepting California’s IOUs on Friday … if California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them. … The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others.

(Hat tip to the fine blog CalculatedRisk)

C’mon guys! It’s not like you’d be putting up your own cash. BofA, Citi and Wells Fargo have received $65 billion in fed funds. (JPMorgan has already paid back it’s $25B. It was either that or cut its CEO’s pay.)

You know things are bad when the banks won’t use their free money to buy something.

Here’s a fund raising idea: Maybe California should hold the mother of all Michael Jackson memorials and charge admission?

Why is Citi still in business?

Last week saw some quite impressive accomplishments, even by Citi’s august standards. In just a few days it tried to come up with a new way to overpay its investment bankers and traders, then it had to remind its staff NOT to accept undocumented mortgages and finally its Japan operations were shut down because of money laundering.

Woot!

Last Tuesday, Citigroup walked into a feces storm entirely of its own making by announcing it would raise salaries by 50% to offset cuts in bonuses.

To be fair to Citi, they are taking (well-deserved) crap for the entire industry on the salary issue. BofA, Morgan Stanley, UBS and others are also trying to dodge the bad PR when huge bonuses are awarded following huge losses. So now instead of bonuses for bad performance execs will just get a huge salary for bad performance. It’s all about retention – or so Citi would like us to believe. Quote from the NYT: “Citigroup executives are so eager to keep employees from fleeing, that in some cases, they are offering them guaranteed pay contracts.” Well, given that those contracts are being paid for with $45 billion of US taxpayer debt who can blame them. Citi is once again free to play with someone else’s money and are being just as responsible as they were the last time. BTW, the idea that these raises are going to the rank-and-file is absolute hogwash. As Alphaville notes, “the biggest increases will go to investment bankers and traders.”

Also on Tuesday, Citi temporarily stopped buying new loans after “discovering” it was missing property appraisals and documents showing borrowers’ incomes.

The discovery came in Citi’s correspondent division, which buys loans from banks and independent mortgage firms, and was responsible for about half of the bank’s $115 billion in mortgages last year. Two great quotes about this:

“There remain key areas that fall short of our quality- control process. We ask you to review your processes and join us in this effort to collectively address these areas of concern.”  — Brad Brunts, a managing director at the bank’s CitiMortgage division.

And this from an analyst

“It is better to pull people off the line, and have a thorough re-education of what goes into a loan, so they can come back and do this the right way.”

Not a good sign when you have to re-train people processing mortgages on the most basic elements of how to do their jobs. Are these some of the folks being offered those guaranteed contracts?

This really takes the idea of not verifying income to a new level.

RealityFrame’s comment about the raises could really be applied to pretty much everything the bank touches: Anybody want to dispute that those banksters aren’t indeed the "best and the brightest"?