Baseball91's Weblog

April 8, 2010

Valuations and Devaluations

Nicholas Cage. Pak Nam-Ki. Citibank’s former CEO. Tom Petters. Theo Epstein.

U.S. District Judge Richard H. Kyle, the judge in the Tom Petters’ trial, on sentencing Tom Petters for orchestrating a $3.7-billion Ponzi scheme, said: “You had to know.” Petters apologized to his family, friends and former employees.

In North Korean, restricting the amount that could be exchanged, the redenomination of the won on November 30, 2009, forced people to swap old banknotes for new ones at a rate of one hundred to one. On March 19, 2010, it was reported that the finance minister in North Korea was executed over too much inflation. Pak Nam-Ki was charged “with ruining the national economy deliberately as the son of a big landlord who infiltrated the ranks of revolutionaries,” Yonhap News Agency said. Pak was 77 years old when he was shot dead in the last few weeks at a military range in Pyongyang, after earlier being sacked as chief of the ruling communist party’s planning and finance department. There had been public anger at the inflation following the currency revaluation. A lot of anger. South Korea’s National Intelligence Service’s Won Sei-Hoon said the revaluation aggravated hunger, wiped out savings, and sparked riots after prices soared.

That is what happens after tinkering with currency. Or with the manipulations of systems.

At the start of his testimony, Charles “Chuck” Prince, the former Citigroup Inc chief executive, told the Financial Crisis Inquiry Commission “I am sorry.” His sorrow was for the problems that led Citigroup to be rescued by the government, while absolving himself of any personal responsibility for the $30 billion which eventually had to be off in collateralized-debt obligations.

In a foreclosure action for auction yesterday, bidding opened at the county courthouse in Pomona, California at $10.4 million on the property with a total of $18 million in loans, far less than the asked for price of $35 million on a property lost to foreclosure by Nicholas Cage, and in less than a minute the auction closed with no takers in the courthouse sale. Cage, who had earnings of $40 million last year according to Forbes, could not be reached for comment. In October, Cage filed suit against his former business manager, Samuel J. Levin for allegedly having “lined his pockets with several million dollars in business management fees” leading Cage down a “path toward financial ruin,” per the complaint. Levin did file his own countersuit, describing a spending binge by Cage “of epic proportions,” where by July 2008 Cage owned an island in the Bahamas, 15 palatial homes around the world, 4 yachts, a private Gulfstream jet, and millions in art and jewelry.

The Baltimore Orioles will pay just the $400,000 minimum of Julio Lugo’s $9 million salary this year, after a trade that sent him from St. Louis to Baltimore for a player to be named later. Or for cash. Lugo had come to St. Louis last summer in a trade between the Cardinals and the Boston Red Sox. It had been the Red Sox who agreed to pay $8.6 million of Lugo’s $9 million salary this year. That Red Sox general manager had set a price for all baseball in the system of arbitration by paying this salary. As the world begins to deal with the economic fallout of pretend banks, of propped up collapsed banks, of balloons in real estate, a view into the affects of bubbles on baseball salaries is worth a longer look.

There is so much sweet sorrow around today as Tiger Woods steps up to the tee in Augusta. Where is the punishment in all of this?

Now no one is all over Theo Epstein in all of this. Yet. But when the day arrives when the ticket buying public, in times more reflective of the 1960s, realizes that baseball can be watched in person only by the wealthy, maybe the spotlight might be focused on why no one in the front offices were fighting the system. No one had been watching out for the blue collar fan for some time. As the bubble in valuations in New York and Boston slowly affected the franchises throughout the nation.

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1 Comment »

  1. Comment by baseball91 — January 19, 2017 @ 10:34 PM | Reply

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