A letter was posted on NYTimes.com (contents are included below).  Please read it.  It is a letter from an AIG employee (now former) Jake DeSantis to Edward Liddy.

I know I have had the opinion that bonuses to the employees at AIG are absurd, especially in the amount specified.  I hadn’t thought the whole thing out (like I’m sure the rest of us didn’t).  

Along with the author of the letter, I’m not arguing that the amount of the bonuses are fair, what I’m arguing is we are deciding who is guilty, without due process.

The employees that we have all been so pissed at, getting those huge bonuses, may not be responsible for the failures at AIG.  Yes, AIG did do a lot of damage to the United States and global economy.  AIG has (maybe had by now) 116,000 employees.  

The government, the public, and the media can’t judge whether the employees who are receiving bonuses deserve it.  For all we know, there could have been 5 people who lost all the money, and another 400 actually making ground in earning more money back for AIG.  

According to this letter, the employees who are responsible are no longer with AIG.  That makes sense, the writing is on the wall when you cause a company to ask the government to be bailed out. 

Now we have the public outraged at the actions of a subset of AIG employees, as they should be.  These people were gambling with the fortunes of the country, and the nation.  

Only AIG can decide who it should keep or fire.  AIG has to make money, and shouldn’t unilaterally be punished — as certain departments were probably making money and should be appropriately rewarded.

We are having another witch hunt.  

This is why we should be scared when the government gets involved in the very personal business of a corporation.  

Maybe just this one employee was earning his salary.  Still, we shouldn’t persecute him just because his colleagues caused problems.

Finally, these were contracts.  As the author points out, the employees knew the company was going down fast.  If they all left, the company would surely crumble (along with all of our taxpayer money).  AIG was trying to keep itself going, and also trying to appease it’s high earners. 

Enough of a rant, please read this letter:

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”

Sincerely,

Jake DeSantis

The 18th, 19th and 20th banks to fail this year are:

• TeamBank of Paola, KS (FDIC Bank closing information)
• Colorado National Bank of Colorado Springs, CO (FDIC Bank closing information)
• FirstCity Bank of Stockbridge, GA (FDIC Bank closing information)

TeamBank of Paola, KS
The FDIC estimates the cost to the Deposit Insurance Fund will be $98 million (I have seen incorrect reports of $9 million around the web).  All deposit accounts have been ransferred to Great Southern Bank of Springfield, MO.  

TeamBank had 17 offices, which have become offices of Great Southern Bank over the weekend.  TeamBank had total assets of $669.8 million and deposits of $492.8 million as of December 31, 2008.  

Great southern bank has assumed $474 million in deposits.  They have also agreed to purchase $656.5 million in assets, at a discount of $100 million (what a deal eh?) and pay a 1 percent premium on deposits.  

The last bank to fail in Kansas was The Columbian Bank and Trust Company, which happened less than a year ago on August 22, 2008.

Customers with questions can call the FDIC toll-free at 1-800-830-4697.  There don’t seem to be any losses according to the FDIC.

Colorado National Bank of Colorado Springs, CO
FDIC estimates the cost to the Deposit Insurance Fund will be $9 million.  Herring Bank of Amarillo, TX has acquired all deposit accounts.

Colorado National Bank had four offices, which are still open, but operating under the name of Herring Bank.  

CNB had total assets around $123.5 million, and total deposits of around $82.7 million.  At least this wasn’t as big of a failure as TeamBank.  Herring Bank agreed to purchase about $117.3 million in assets at a discount of $4.2 million.  

The last bank closed in Colorado was BestBank, Boulder on July 23, 1998.

This doesn’t sound like the deal that GSB got in the TeamBank failure.  Does anyone care to explain to us how GSB got a 15% discount, and HB only got 3.5%?  

Customers with questions can call the FDIC toll-free at 1-800-830-4698.  There don’t seem to be any losses according to the FDIC.

FirstCity Bank of Stockbridge, GA
FDIC says the Deposit Insurance Fund will take a hit of $100 million.  Deposit accounts will be paid out by the FDIC.  Direct Deposits from the federal government, such as Social Security and Veterans’ payments, will be transferred to SunTrust Bank.

No banks could be located to take over the accounts, so all accounts (up to the $250,000 FDIC limit) will be paid out.  Other accounts will have to verify if their account has been fully insured at Is My Account Fully Insured?.  In the past a large fraction of the balance over $250,000 has been paid out (if not all) to minimize deposit losses.  This depends on the assets of the bank at failure.

Payments will be mailed today, Monday.  

As of March 18, 2009 FirstCity assets totaled $297 million with total deposits at $278 million.  At closing, the bank had about $778,000 in deposits that exceeded insurance limits (thats not too bad, though for a few people I’m sure it will be an inconvenience).  

If you have an account, or questions, please call the FDIC at 1-877-367-2719.  

Lately we have been hearing a great deal of fuss made by financial companies who have received government bailout money, that their activities and trades are proprietary information. To release this information would put the banks at risk.

The primary problems with the banks argument are three fold:

First – the taxpayers are the owners, so if there is proprietary information it’s the tax payer who should know about it.

Second – If the taxpayers are expected to give money to one party, which is in turn going to then give that money to others, the taxpayer needs to know where the money is going.

Third –With stock, companies are expecting to file SEC documents when engaged in large purchase, or transactions. These types of transactions should be regulated and the large transactions should be booked or filed with the SEC, so that people can better gauge what the banking risks are.

“AIG caved in to political pressure Sunday and released a list of some of the financial counterparties that benefited from its $160bn US government rescue, including some of Europe’s largest banks.”

Breakdown: Amounts

• AIG paid $22.4bn of collateral related to credit default swaps
• $27.1bn to help cancel swaps
• $43.7bn to satisfy the obligations of its securities lending operation
• Payments made between September 16 and the end of last year

Breakdown: Payments

· Goldman Sachs received payments worth $12.9bn.

· Top European banks received payments worth – $31.6bn

· “European banks used AIG’s credit insurance to keep from having to hold capital against their long-term securities holdings.”

· “Wall Street banks also used swaps to hedge their sub prime mortgage-backed securities portfolios.”

Breakdown: Exposure Reductions

· Reduce exposure to credit default swaps and other derivatives

· Notional value of derivatives exposure at $ 1,600 billion

· $ 2,700 billion a year ago

· CDS exposure has been cut from $ 433 billion to $ 302 billion

Breakdown: Bonuses

· AIG to pay $165m in retention bonuses

· Employees of AIG Financial Products.

· Unit contributed most heavily to near-collapse

“The bonuses represented “legal, binding obligations”, but said AIG would make a range of compensation cuts in the unit this year.”

These are considered to be the most talented employees. AIG’s Chief Mr. Liddy is concerned that without these bonuses AIG will not be able to attract and retain talented employees who think that their compensation will be subject to rules by the US government.

Makes you wonder, is this the fault of the people that were in charge, or was it the fault of the market? Are these the smartest people who should be retained? For anyone wondering, markets are controlled by people.

These are the people that have failed us all. They are not the best, nor are they the brightest. Unless of course you consider them the smartest for enriching themselves as the rest of us fail.

Read Article: AIG publishes counterparty list

Our forums have been up for a while now.  Interest has been decent in terms of readers.  Unfortunately we have a lot of readers, and not enough contributors!

The Why Banks Fail forum is meant to provide an open, and interactive way to discuss money and finance.  

We actively manage it so spam will not be a problem.

Recently we’ve been working with Jefferson National, and providing a series of tips on annuities.  Larry Greenberg will be posting every Monday for the next few weeks, highlighting insider tips on annuities.  They will be happy to respond individually to questions about annuities.

As of this morning, we have announced a Forum Activity Contest!  To promote our readers into becoming interactive, we are giving away a $50 American Express Gift Check on May 1 to the user with the most posts (don’t get smart, we will be monitoring this actively — so real posts only).  

You are welcome to advertise your blogs in our forums, ask us questions, request an article, ask Jeffersion National about annuities, or just stop by and make suggestions.

Thanks for reading Why Banks Fail.

by Laurence Greenberg, CEO, Jefferson National

In today’s environment, “fee transparency” is the mantra for all kinds of financial products. Unfortunately, it’s been slow in coming to variable annuities. 

Some real progress has been made with simple, transparent, low-cost products. But until greater consumer value is widespread, here’s a primer on how to peel away the layers of an annuity’s fees so you can weigh the benefits of what you’re getting against what you’re paying. 

Generally, variable annuity owners are subject to two levels of fees: insurance-related fees from the issuing insurance company, and fees charged for the underlying investment options inside the VA. Most of these fees are asset-based—so the more you invest and the more your account value grows, the more you pay in fees. Other fees are driven by a transaction or time period, like annual service charges or additional trading fees. 

PEELING BACK INSURANCE CHARGES
Most variable annuities get criticized for the insurance-related fees that drive costs up and performance down. On the typical VA, these combined insurance charges average 1.35% per year according to Morningstar.¹ Here’s what to look for: 

Mortality and Expense (M&E): Most, but not all, annuity issuers assess M&E charges. According to Morningstar, this asset-based charge averages roughly 1.2%.1 For most annuities, this fee covers the basic death benefit guarantee, the promise that annual insurance charges won’t increase, and the ability to annuitize at a guaranteed lifetime payout option down the road at the rates specified in the contract. 

Because this is an asset-based fee, these costs increase as your investment grows.  For a $100,000 annuity, the owner may pay around $1,200 in M&E fees; for a $250,000 annuity, the owner pays around $3,000. 

With the growing popularity of ETFs in recent years, and with capital gains taxes at an all time low, to some investors this kind of M&E may seem like a high price to pay for a tax-deferred VA. So if tax-deferral is one of your objectives, it may benefit you to look for low-cost, or flat-insurance fee VAs.

Death Benefit Riders: All variable annuities have basic death benefit protection: a guaranteed return of the current account value or some portion of the initial premium if the annuity owner dies before payments begin. Now, though, more than 90% of all annuities offer an optional enhanced death benefit through the purchase of a death benefit rider.2 

So if you added this rider for an extra 50 basis points a year on a $500,000 annuity, it would cost an extra $2,500 a year on top of the $6,000 M&E. Now both of those annual fees are chipping away at the returns of the underlying funds. If you’re insurable, a term life policy may be more cost-effective. 

Living Benefit Riders: Many annuities also offer options that guarantee an enriched income stream in the future—but at a price. Annual fees for these riders typically cost an additional 1% to 3% per year or more.²

Here’s another thing to consider. While annuities grow tax-deferred, annuity income benefits are taxable. So that enhanced benefit has a bigger tax bite. If you are looking to lock in additional future income, tax-free bonds may be a better alternative—providing more tax-advantaged income in the future, without annual fees. 

Surrender Charges: Most typical VAs will pay a sales rep a commission of 5% to 7%, or more. Then to ensure that the issuing company can recoup their commission, these VAs impose a surrender charge. The surrender charge is an asset-based fee that may start as high as 7%, but will decrease to 0% over the course of the surrender period, which is typically the first 5 to 7 years of your contract. The surrender charge helps the issuing company to defray the commissions paid to its salesperson if the annuity does not stay on the books—and it can keep you  locked in for years, unless you are willing to pay this penalty. Be sure to check your contract to find out whether surrender charges apply. 

“No-Load” VAs do not pay a commission to a salesperson, so they do not have a surrender period or a surrender charge.

Annual Policy Fees: Many VAs charge a nominal policy fee, such as $25 a year. One more item that adds to your costs. 

EVALUATING INVESTMENT FEES
Inside your variable annuity, you will find a selection of underlying funds, also known as sub-accounts or investment options. These underlying funds will charge annual asset-based fees which may vary widely—averaging from 0.6% for basic money market funds to 2.3% for bear market domestic stock funds.2 

The annual fees charged for your underlying funds cover the cost of professional third-party money management—such as fundamental research, ongoing monitoring and allocation rebalancing. These annual fees may also include 12b-1 fees, which may pay for marketing and distribution. 

Some companies allow free, unlimited trading of funds. Some will limit the number of free trades in a year by assessing a transaction-based fee. While a transaction fee may not be an issue if you are practicing a buy and hold strategy, it may be very costly if your variable annuity assets are actively managed. So be sure to know the trading policies of your annuity carrier.

WHAT YOUR STATEMENT DOESN’T STATE
Here’s a little-known fact: Fees are not explicitly reported on variable annuity statements. All you will see is performance after fees have been deducted. So there’s no annual reminder of what you are paying for, or what it costs you in terms of performance. 

The best way to deconstruct the fees for any variable annuity is to read the prospectus. Then, ask yourself or your financial advisor these three key questions:

1. Does the annuity’s long-term tax deferral match your financial objective? 
2. Do death benefit and living benefit riders offer worthwhile guarantees–at a good value?
3. If a change is warranted, have your surrender charges expired? 

The Bottom Line: The right variable annuity can still offer an attractive value for many investors, and can maximize the power of tax-deferral to help you accumulate more and reach your retirement goals faster—but only if it’s not bogged down with excessive fees. 

Laurence P. Greenberg is President and CEO of Jefferson National, which developed Monument Advisor, the first flat insurance fee variable annuity. See the impact fees and charges may actually have on your savings by taking the challenge at www.AnnuityRescueCenter.com.  For more information or to receive a prospectus, visit www.jeffnat.com or call 1-866-WHY-FLAT (866-949-3528).

¹ Morningstar® data as of 12/31/07.�
²2007 Annuity Fact Book, National Association of Variable Annuities.

CNBC had an excellent program called “House of Cards” that has aired a few nights ago, and will continue to be aired on televeision a few more times (check out the schedule).  You can watch the entire program, thanks to Hulu.com.  

Let’s hope we are all wealth and retired by the time this house of cards falters.

Internal Email
Wall Street, 12/15/2006

Part 1:

Part 2:

Last week we wrote about the possible failure of Trump Entertainment Resorts in Companies Who Could Fail in 2009.  Confirmation reported by Wall Street Journal today that Donald Trumps casino is expected to file Chapter 11 of the Bankruptcy Code on Tuesday morning.

The move could affect 9500 employees.  This is expected after the stock has slumped 94% in recent years.

I cannot get a definitive date on this comic, but it’s circulating around the internet like wildfire.  Most people agree it’s at least a few years old.

The Calvin and Hobbes comic strip is written and illustrated by Bill Watterson.

Click to view full size

Something’s gotta give at Sirius XM.  

As of Sept 30th 2008 they had $360 million in cash and $2.8 billion of long-term debt.  On February 17, 2009 — Sirius has $300 million in debt due to mature.  

Echostar has stepped in and purchased part of that $300 million.  Echostar isn’t playing their cards too close, they want to buyout Sirius.  

A brave move given some of the issues plaguing Sirius XM Satellite Radio:

• Expensive Talent (Stern and crew cost $80 million a year)
• Recent merger pivoting on cost cutting which hasn’t been realized
• Expensive infrastructure
• Plummeting car sales (one of the main revenue streams for the satellite radio company)
• Lots of debt piling up

Sirius has already issued stock to replace some of it’s debt. At $0.11/share though, Sirius is in a downward spiral.

Sirius has hired advisors to explore the option of bankruptcy.  Whether this was a serious move, or meant to play with Echostar — we don’t know.  Sirius XM’s chief Mel Karmazin, optimistic a year earlier, is now fighting off both a takeover and bankruptcy.  

Bankruptcy seems like a nice option, as it allows renegotiation of certain contracts (bye bye Howard Stern), and restructuring.  However, that gives Echostar the option to pursue a takeover in court.  

Karmazin is taking this personally.  It will be interesting to see this play out in the coming days.

I read two articles today that pertain to General Motors and the fight going on between the US government (on behalf of taxpayers) and prior creditors.  

Everyone is fighting for first position in line when General Motors goes into bankruptcy.  

Read the articles:

The Huffington Post – Crysler, GM Bankruptcy Looming in Detroit
The government has known that the financial bailout wasn’t enough, and that the only way for taxpayers to get their money back would be to force a bankruptcy.  Congress was told in a report in December. 

BloggingStocks – GM and Chrysler could finally sink Ford
The failure of General Motors could result in a domino effect failure of Ford’s supply chain.  If GM and Chrysler were forced to file Chapter 11, they would take down much of the supply chain of vehicles as debt would not be paid back.

We think this speaks for itself.  Everyone knows the government, corporations, everyone manipulates numbers to make them seem better.  It’s scary when you look at the truth behind some of these numbers.  A very interesting image by mint, originally seen on Unemployment Rate: A Visual Guide to the Financial Crisis.

Yahoo posted an article on Friday — 15 Companies That Might Not Survive 2009.  It’s a list of many companies that we take for granted are around.  Not only do we take for granted having their products, but their jobs!  On this list are over 351,500 jobs on the line.  That’s scary.  

Not all of them are publically traded, but the ramifications are still huge.

We have posted some of our own notes where applicable:

Rite Aid - Retail
RAD
100,000 employees
Stock Price down 92% 

Claire’s Stores – Retail
Private
18,000 employees

Chrysler - Automative
Private
55,000 employees
Well, I doubt it will go under with it’s financial backing (It’s because they need the money… or so they say).  The most likely scenario is actually what the investors want — to sell Chrysler off.  Though I’m sure Cerberus would have preferred slightly better numbers.

Dollar Thrifty Automotive Group - Car Rental
DTG
7,000 employees
Stock down 95%
On the positive side, DTG will continue to be listed on the NYSE.   When that is good news, its bad news. 

Realogy Corp – Real Estate
Private
13,000 employees
 They’re in realty, enough said.  They’re also playing games with their debt. �
UPDATE:  Senior VP of Corporate Communications, Mark Panus, has responded to this post.  Please read his comments below, as well as our response.  A quote from his response:

We disagree completely with the inclusion of Realogy on such a ridiculous and subjective list that originated as a blog post but is now masquerading as a “news report” elsewhere on the Internet. As of January, there were 88 other companies with the identical Moody’s Speculative-Grade Liquidity rating as Realogy. Our company has the best brand networks and the most successful brokers and agents along with the most seasoned management team and the best employees in the industry. 

Station Casinos – Entertainment
Private
14,000 employees
Restructuring plan (prepackaged bankruptcy) will let the company emerge from pseudo-bankruptcy in the summer.  That should be a great time for business (heavy sarcasm).  Station Casinos is still dealing with the $2 billion in debt created when they went private in 2007.   

Loehmann’s Capital Corp - Importers / Department Stores
Private
1,500 employees
Maybe changes in valuation of the dollar can help? 

Sbarro - Pizza!
Private
5,500 employees
I would miss their pizza.   Sorely.  

Six Flags – Entertainment
SIX
30,000 employees
Stock down 84%
They just hired 2,400 seasonal workers in Atlanta.   Their only hope is a big summer season.  I’m worried “discretionary” spending may be down this summer. 

Blockbuster – Entertainment
BBI
60,000 employees
Stock down 57%
Who really thinks Blockbuster can win out over Netflix?  Blockbuster adjusts their model on a yearly basis now and still can’t make much headway.  

Krispy Kreme – Yum!
KKD
4,000 employees
Stock down 50%
This would be the biggest loss of all.  I know that I can’t get a Krispy Kreme anymore around Boston, but at least I could travel for one of their artery clogging pieces of art. 

Landry’s Restaurants – Food
LNY
17,000 employees
Stock down 66%�
Having trouble making ends meet.   

Sirius Satellite Radio - Entertainment
SIRI
1,000 employees
Stock down 96%
How can they avoid bankruptcy?  Their stock is almost worthless.  Apparently SIRI doesn’t think so (yes, I only linked “SIRI doesn’t think” — interpret).   

Trump Entertainment Resorts Holdings - Real Estate / Entertainment
TRMP
9,500 employees
Stock down 94%�
Along with Station Casinos, TRMP isn’t doing well either.  It seems throwing money away when you have no money, isn’t going so well nowadays.  We all know Trump is the king of bouncing back, is this just another bounce?

BearingPoint – Management / Technology
BGPT
16,000 employees
Stock down 21%
Who knows?