Tag: Edward B. Rust Jr

US Long Term Debt Downgraded. It’s gone from bad to worse.

My predication: Monday is gonna be a rough one on the markets. The WaPo’s Ezra Klein Blog has some basic analysis but for bondholders when rates rise, bond pricing drops. Monday morning all eyes need to be on bonds, not the initial reaction of the equity markets. We all are likely pay higher rates on home mortgages go forward and those in variable rate mortgages may see their rates rise sooner than later.  From a broad view, the excesses in the economy that manifested themselves in the year 2000 stock market bubble with the 2007 real estate crash on its heels remain in the economy that must be worked out.  The end result of this is that the standard of living of all but the obscenely wealthy will take a hit and more Americans living on the financial razors edge will be thrown into poverty.

But there is also another story here IMHO folks.  I’ll begin it with this simple fact: One of those obscenely wealthy folks I mentioned above, namely one Edward B Rust Jr of State Farm infamy, is on the board of directors of Mcgraw Hill, the owner of Standard and Poors. Affectionately known as Snake Farm to those that have been bafukkied on the Farm, I think a very strong case can be made to throw several members of this robber baron’s family in the pokey for what they have done.

Folks back in the day it was called organized crime but since they bought most of the politicians beginning in the 1980s such corporate predators are actually respectable in official circles these days.  I bet ol’ Ed loved it when Barack Obama genuflected before him and opened up wide when he ran for the Illinois Senate and later President.  About 90% of the GOP is no better by my reckoning.

sop

Did I hear someone say they wanted to read Aaron Broussard’s depo in the pumps lawsuit?

Well then you’ve come to the right place.  I have read it and will update later with some analysis but I enjoyed researching the man behind this post about as much as I enjoyed reading the depo. (Yeah I know I’m weird that way). I won’t go into the specifics as Jefferson Parish residents well know the gory details but AB’s wiki entry is very enlightening as to the whoppers he told the national media after Katrina. Is it possible Mr Broussard does not know how to tell the truth? Frankly reading AB’s depo reminded me of the testimony of State Farm’s CEO Ed Rust in Watkins, a case out of Oklahoma City where the Farm screwed their policyholders after an F-5 tornado plowed through town. It took those poor souls 7 years to get State Farm to pay up. By comparison the developments with AB are moving at light speed.

Am I the only one that thinks Mr Broussard has a long lost relative in John Banner of Hogan’s Heroes fame? Below the fold I’ve embedded pictures of Mssrs. Banner and Broussard so our audience can decide for themselves. Continue reading “Did I hear someone say they wanted to read Aaron Broussard’s depo in the pumps lawsuit?”

Merlin pops the question: Should Rust family stay in State Farm’s power and ownership given the recent record of policyholder and corporate citizen ethics?

Like his grandfather and father before him, Edward B. Rust Jr. became the chairman and chief executive officer of State Farm Insurance Companies…Rust’s grandfather, Adlai H. Rust, was a young lawyer when he helped George Mecherle found State Farm and became his right-hand man. Mecherle’s son, Raymond, took over the presidency of the company in 1937, and when Raymond died in 1954, Adlai Rust took over as chief executive officer. His son, Edward B. Rust Sr., joined State Farm in 1941, succeeded him as CEO in 1967, and was named chairman in 1983…

In August 1985 Rust’s father died at the age of 66 and his namesake, only 35 years old, was promptly appointed the new chief executive officer.

With Rust’s family fortunes so intertwined with State Farm’s history, it was difficult clearly to distinguish the corporate culture from the CEO’s personal worldview… The company was so committed to controlling costs in the name of its policyholders that its corporate culture appeared to take on the zeal of religion, and to many it went too far….

In 1989 State Farm was accused in a policyholder lawsuit of being too conservative in maintaining reserves, with the effect of trimming dividend payments to policyholders… During the 1990s Rust would face a number of legal problems that critics said were an outgrowth of State Farm’s inbred culture and obsession with cost controls…

In 1998 State Farm was “rocked by a string of blistering punitive damage decisions,” as reported by BusinessWeek (“State Farm: What’s Happening to the Good Neighbor?” November 8, 1999).

[In Utah], the company was fined $25 million in punitive damages, in part for the “systematic destruction of documents” and “systematic manipulation of individual claim files to conceal claim mishandling.

With this background as reference, SLABBED turns to the Property Insurance Coverage Law Blog where policyholder attorney Chip Merlin pops the question: Should the Rust Family Stay in State Farm’s Power and Ownership Given the Recent Record of Policyholder and Corporate Citizen Ethics.

State Farm lost its most significant claims case Continue reading “Merlin pops the question: Should Rust family stay in State Farm’s power and ownership given the recent record of policyholder and corporate citizen ethics?”