March 20th, 2009Ex-CEO Ken Karpman Stops Paying Mortgage, Delivers Pizza
ABC News just profiled a story on Ken Karpman, the ex-CEO who is now delivering pizzas for $7.29 per hour and living off of taxpayer funded food stamps. After getting two degrees from the UCLA, he landed a job as an institutional equity sales trader. Apparently unimpressed with his $750,000 yearly salary, and his 4,000 square foot Tampa home on the golf course, he quit his job to start a hedge fund.
Karpman was so confident in his good fortune and the strong economy that he left his job in 2005 to start his own hedge fund. To pay for the new business and their standard of living, Karpman quickly burned through $500,000 in savings and, like so many Americans, took a line of credit against his house.
[Geldpress comment] Any guesses how that ended up? You guessed it, the hedge fund collapsed, like so many other hedge funds managed by gamblers ex-traders who believed in the power of easy money, and who had no concept of risk management, let alone the definition and proper implementation of a “hedge”.
The ABC News story continues…
Desperate for quick cash, Karpman tried to find a job bartending but came up empty. Finally, he drove his Mercedes to Mike’s Pizza & Deli Station in Clearwater and applied for a job.
[Geldpress comment] Apparently, it never crossed Ken’s mind to SELL the Mercedes and buy a used Chevy.
The ABC News story continues…
…The Karpmans are now on food stamps and a tight budget that doesn’t nearly cover their children’s $30,000 private school tuition.
The family’s jet skis now collect dust in the garage near the Mercedes, with its broken transmission they cannot fix.
Stephanie Karpman has closets full of clothes and handbags she likely won’t be able to take with her and is eyeing consignment shops as a place to unload them. She said she has found herself going through her closet and wearing clothes she hasn’t touched in years.
[Geldpress comment] – Does ABC News really expect to gain sympathy for the family forced to drive a Mercedes, with a garage full of jet skis and other toys, and kids in a $30,000 per year private school?
The ABC News video interview also mentions that the Karpman’s have not paid their mortgage in 2 years, and may lose their home in the next few months. It just begs the question of WHY a foreclosure would take over 2 years. It sucks for a family to lose “their” home, but I still firmly believe that the best medicine for a family struggling to pay (or not paying) their mortgage is a foreclosure, and apartment living within their means. The Karpman’s had their golden ticket but over-leveraged themselves on a hedge fund gamble, and now must pay the price.
Special message to ALL “black box of finance employees” – leverage is a bitch. It works great on the way up but does have a way of biting you in the ass on the way down. Did you really learn nothing from Enron? Did you really think that 30, 40 or 50 to 1 leverage was sustainable? Did you really think that starting and succeeding a hedge fund was easy? Did you really think over leveraging an obvious credit bubble would work?
Sorry Ken, you have no sympathy from me, but I am impressed with your humility in taking a REAL JOB, in an industry that produces a REAL, TANGIBLE, and UN-LEVERAGED products.
March 20th, 2009 at 1:10 pm
Your analysis is pretty cold and callous. But hey, that’s life. We eney those rising to the top and we celebrate when the fall from the top and on their ass.
March 20th, 2009 at 1:13 pm
I think there’s one lesson we can take away from this: Never leave yourself in a position where you don’t have something to fall back on. He blew through his savings to establish his hedge fund, leaving himself with no way out. I personally like to keep a nice rainy day fund in a good old fashioned savings account. And it’s a good thing, too, since my car broke down this weekend costing me a nice quadruple digit repair bill. If I was living off fumes, I’d be in a bad situation now, but I’ve been able to roll with the punches and take the hit immediately while making adjustments to my spending habits to recoup the costs in the long term.Andrew
March 20th, 2009 at 2:10 pm
[...] Ex-CEO Ken Karpman Stops Paying Mortgage, Delivers Pizza [...]
March 20th, 2009 at 3:25 pm
It takes a pretty petty and pathetic man to mock someone else’s misfortune. I suppose whatever you have to do in order to make yourself feel better “Geldpress”.
BTW…I bet you there are people out there who don’t think slamming others ona webpage is much of a “real job” either…
March 20th, 2009 at 3:33 pm
$750K a year and only $500K in savings? That’s pathetic! BTW, this does smell like a publicity stunt to aid in his job search:)
March 20th, 2009 at 4:47 pm
I would guess that he may have even gotten some residual income from ABC News for the story. Perhaps we may even see him on late night television talk shows as well.
March 20th, 2009 at 4:56 pm
Just presenting the other side of the story. The ABC News gives him way to much sympathy. Ken will eventually bounce back and probably land another multi-6 figure job in the next few years, after he rolls with a few economic hardship punches. But the more permanent members of the working poor, who don’t drive Mercedes or live in 4000 s.f. houses, are going to have trouble sympathizing with his temporary hardships.
March 20th, 2009 at 9:26 pm
I fail to believe why anyone can have sympathy for a careless and over zealous guy like Ken? Remember that he was a “hedge fund” manager and is in the business of taking risks and likes to live on the edge. His delivering pizza is totally a stunt and he is enjoying the sympathy-shower. I can totally understand what he is doing. Well poor people always have big heart to sympathize with people who they think are in poor state and then never bite back or retaliate…Ken knows that and he is just taking advantage of the situation…. what a stupid story really…. good for Ken… his wife got some TV time to brag to her friends….
March 21st, 2009 at 10:10 pm
it’s gotta take a truckload of humility for this guy to take on that pizza delivery gig
March 22nd, 2009 at 4:43 pm
You are definitely not being too hard on this guy, Geldpress. He’s doing this for the publicity and cash from TV show appearances. ABC should know better and spend more time focusing on the working poor who are struggling to make ends meet in a tough economy rather than on this jerk.
March 25th, 2009 at 5:13 am
TigerAl,
I was thinking the exact same thing as you. I totally believe this is just a publicity stunt to help him in his job search. I hate stuff like this.. this guy and his family isn’t getting any sympathy from me.. 750k/year salary and only saved 500k? and if 750k wasn’t enough, he wants to start up his own hedge fund? then when things got sour.. he continued to try and live his lavish lifestyle which ended up in him using all his savings.. boo-f’in hoo… i don’t feel sorry one bit.. they could’ve sold the house, mercedes, jet ski’s etc… and why isn’t the wife trying to find a job to help?
March 26th, 2009 at 9:10 am
Ken, Go from $750,000 to $7.50/hour. Nice. Have you thought about just selling the house and jet skis and cars and jewels. Move into a smaller house, less expensive. Taking your degrees and get a job worthy of you. You can have all of the degrees you want but with no common sense you are worthless. Ken you are worthless. Wife get rid of him, oh forgot, he has nothing to take now..so it would be worth it to you for a divorce yet.
August 13th, 2010 at 11:44 pm
Florida sales are at record lows, foreclosures, people simply walking away from properties, school enrollments going down, Realtor (r) going back to the shoe factory, oh wait we don’t have any industry. Realtor going back to picking fruit or driving trucks or taking tickets at Disney. It is no where near over.
March 31st, 2011 at 7:31 pm
Ken should consider himself lucky to have a job. Others wish they could deliver pizza, some wish they had the money to oder it!