Posted on 09/15/2009 7:25:49 AM PDT by SeekAndFind
Part of the charm of Wall Street, and what scares most reasonable people away, is that it is as close to a meritocracy as exists on this earth. It's dog eat dog. It's sink or swim. You do a trade and it makes money, then you're a hero (for a moment anyway) and deserve a bonus. You bring in a deal, you get paid. You lasso more clients' assets under your firm's roof, you're a hitter. I once discovered some good news on the stocks I followed before the rest of the Street, and mentioned it to the sales force at a morning meeting and moved markets in New York, Tokyo and London. I had the head of global equities pat my head on the elevator ride up the next morning. Pat my head! I was told he never does that.
The flip side, of course, is what makes Wall Street so dangerous. You lose money for the firm and you're a heel. Do it again and you don't get paid that year. Do it a third time and you're out of a job. Just like that. Gone. I've seen it happen to friends and acquaintances at just about every firm up and down Wall Street. There is no tenure on Wall Street, no job security, no long-term guarantees. Ten- and 20-year careers end in a flash. Happens all the time, and everybody who works in the business knows this.
That's one reason why everyone is paid so well. Think of it as combat pay.
(Excerpt) Read more at forbes.com ...
In the rest of the working world, the downside risk is still the same, just not the upside potential. That is why folks outside wall street have no sympathy for them.
Let’s summarize his reasons as to why Wall Street pays so well :
* Trading stocks, doing IPOs, merging companies, managing money is a very lucrative business. Not everyone can do it. It’s hard. Wall Street hires in that 99 percentile zone. And then they make your life miserable hoping you’ll quit before they break you. Or hoping they break you before you lose money for the firm.
* The score, like an SAT test, is kept with real money—how much your trading desk makes for the firm—how big a chunk of the bonus pool you command for your do-or-die heroics day in and day out.
* The job ain’t fun. ou have to one up on the Goldman Sachs of the world, generate as good a return on equity and earnings growth so that you could win the meritocracy game and get paid in spades. How dare Bear Stearns’ CEO make more than ours! Let’s lever this sucker up with mortgage-backeds and create a trillion-dollar balance sheet. If not us, who?
Every company I have ever heard of, has a ‘gating function’ to determine if any bonus is going to be paid to anyone.
Did the company make a profit?
If the company did not make a profit, no one gets a bonus. If the company made a profit, the bonus paid is a function of how much profit was made.
How can any company pay out billions of dollars in bonus, when the comapny lost money? Is it any wonder they went belly-up?
And then the well-paid take significant risks to stay that way, because the guy sitting next to them is doing just that, and damn the exposure next year to what made you the profits this year. I wouldn't care, except that the likes of GS and MS now expect Uncle Sugar will backstop their risk-taking. So I'm on the hook for their downsides.
If it’s such a meritocracy, then how did Corzine last so long?
I am sure all those who saw their 401k’s dive off the cliff will feel better now, knowing how dynamic the Wall Street guys are.
parsy, who says we should maybe make the work on Wall Street a whole lot easier for them, by banning hedge funds, most derivatives, and imposing the transaction tax
I really, really resent politicians, business folks, sports figures, etc. who have never spent day one in uniform talking about what "warriors" they are, and how they've "done battle" on Wall Street, or on the football field.
I suppose these people have an inferiority complex and really feel the need to portray themselves as soldiers for self-aggrandizement, but it really rings hollow with me, and lessens them in my eyes.
My brother worked on Wall Street for years, and then invested for companies after that. He was always pretty conservative regarding risks, but managed a solid 8-10 percent return per year anyway. But that wasn’t good enough for him to fly with the hotshots - the same hotshots who ended up taking the financial system to the edge of ruin, and who always ended up adversely impacting my brother because their risk ended up screwing up his division’s profits.
This current economic disaster was almost exclusively caused by the banksters (with Dim politician assistance). How many paid the price for their stupidity and greed? Not very many - they were bailed out by Bush, Paulson, Timmy the Tax Cheat, and the Dhimmocrats.
What your brother experienced is exactly what this guy is talking about.
I don’t know how high up the corporate ladder your brother is, but a lot of decisions made regarding risk taking is made very high up.
As the author states :
“And by the way, very few people at Lehman really understood how upper management was playing this meritocracy game with the rest of Wall Street with the rank and files’ careers.
When that trade went south, and their creditors pulled their short-term financing, (OK, Jamie Dimon at JP Morgan was particularly egregious pulling a $5 billion plug), the ugly side of meritocracy reared its head. You lose money, you’re out. Goodbye. It was nice knowing you. Every single person working at Lehman knew this personally, or should have known. That’s the giant sword hanging over everyone’s head, the stench of fear, that keeps the game going and going. I’ve got to use my 99 percentile smarts and win. If I don’t, I’m toast, so I’ll work harder, think harder, and of course play harder with my winnings that everyone else. The outside-meritocracy downside became the inside-meritocracy homicide.”
>>How can any company pay out billions of dollars in bonus, when the comapny lost money?
You’re thinking of these companies as monolithic entities. There’s been a lot of consolidation on Wall Street and when a smaller company gets acquired, their bonus pool is often kept separate based on their own performance rather than the company-wide performance. So, a company can be an overall loser, but the few REALLY profitable sub-units will still be paying out big bonuses.
By the way, there are lots of organizations with pathological problems that think of themselves as meritocracies (La Cosa Nostra).
This reminds me a lot of the movie in the 80’s — WALL STREET ( where we got the phrase “Greed is Good”). Has anyone out there ever stop to consider if what they’re doing has any real social or economic value ? Are they really creating anything ?
The Mafia believes that they are too.
He never made it that far up, mainly because he avoided the high-risk stuff - thought it was unsound for the long-term - he takes seriously the need to manage risk against reward.
One of the things I enjoyed about being a salesrep was the “I’ll cut you some slack because you are putting-up the numbers, or I’ll have security escort you from the building immediately” attitude that prevailed in the office. That being said, I didn’t consider myself a “warrior,” although our casualty-rate was high . . . and I didn’t have Uncle Sugar bailing me out for stupidity.
To a certain extent, I really don't care. However, I expect the line to be drawn at zero - once the company takes such risks that they can implode the system, it's time to look at how risk management should be monitored and regulated.
So when it’s “bonus time” the small companies are independant; but when the company fails, everyone goes bankrupt.
Sorry, the banking industry is no different from any other large industry. If the processor division of Intel makes big bucks, but the memory and motherboard and chipset divisions all lose money - then INTEL didn’t make money. At that point, no one gets a bonus - that is the way you keep a large company in business.
Now, frankly I wouldn’t cry at all of these big companies fold, inept managment is its own reward. A smaller and better ran company will simply assume a larger role. However, when Pres Bush and Pres. Zero put a gun to the head of the US Taxpayer and take money out of our pockets, and place a debt onto our children, so they can give it to poorly managed companies - I have a problem with that.
Especially, since after TARP 1 and TARP 2; they have not changed the way they conduct business. Why the heck should they? There have been ZERO consequences for playing fast and lose with our money. What are you going to do? Take away their birthday?
No, until they learn that there are consequences to their actions, there is no reason for them to change the way they run their business. Once again, the Gov’t has rushed in and screwed a completely viable business model.
Sorry, it is.
If the processor division of Intel makes big bucks, but the memory and motherboard and chipset divisions all lose money - then INTEL didn’t make money. At that point, no one gets a bonus -
If the head trader of a division has a contract that pays him 10% of his divisions profit and that division earns $1 billion, he's due $100 million, even if the rest of the firm loses $1 billion for a breakeven year.
- that is the way you keep a large company in business.
That is the way you lose the guy that made you $1 billion. The guy that kept your firm out of a $1 billion losing year.
He definitely was not your typical Wall Street type - he bought an Oldsmobile when he started work in 1979 and drove that car for 10 years while his co-workers were trading in their Beamers every couple of years.
His tenure wasn't really all that long.
The banking business is not magical. They should be treated like any other industry. No other industry has this sort of system, the mere existance of such a system boggles the mind.
The hard fact of the matter, is that these ‘gunslingers’ spend money they didn’t have; and put a gun to the heads of every American to make good on their poor decision. After a year and Billions of dollars, they are still doing business the same way.
What doctor, engineer, scientist, chemist or other professional has this sort of situation? If I design a time machine, it belongs to the company that hired me. If my division loses money, I get laid off. If my division makes money, AND the company makes money, I may get a bonus.
The present way the banking industry is working is a broken model. If it were not broken, we would not be in the recession we are all presently enjoying.
If any of those has a contract paying them a percentage of revenue, they should be paid, even if the earnings company wide are negative.
If I design a time machine, it belongs to the company that hired me.
And if your contract says you get 10% of the value of the time machine, that is what you are entitled to get.
The present way the banking industry is working is a broken model. If it were not broken, we would not be in the recession we are all presently enjoying.
Replace "banking industry" with "congressional leadership" and I'll agree with you.
One thing people still don’t realize is this — knowing that the government is going to bail them out anyway, Wall Street is going back to their old ways.
Something tells me that things are not right at this time.
Divorce rates in the United States are hovering above the 50% mark. Conversely, a recent study by Bain & Company came to the conclusion that 70% of corporate mergers actually destroyed shareholder value.
Gee, isn’t one of the main arguments for a merger that it will enhance shareholder value?
Oops!
And, of course, merger mania only seems to strike when markets don’t have any better reason to go up (AOL-Time Warner merger back in 2000, anyone?). No wonder there’s always consistent overpayment going on…
Merger mania is one facet of an overall speculative mania currently going on — and owning shares of the next buyout candidate is the hottest lottery ticket you can buy in your retirement account.
After all, we didn’t see Disney’s offer to buy Marvel six months ago – when they could have offered half the price they paid just a few days ago.
What value do they see now? Guess that’s part of the ole Disney “magic.”
The same logic applies to Kraft’s offer for Cadbury. If Cadbury is such a good buy, why didn’t Kraft make an offer at $40 six months ago? Or even at $35.
I’ll tell you why: the mood in the markets was so pessimistic then that any offer above the current price might have been considered overpaying.
Of course, Cadbury rejected Kraft’s offer for being too low. I can’t tell who the pot is and who the kettle is on this one.
Game over for this market, folks – greed is back!
There’s always a lesson from merger mania. I’ve had a couple of stocks get buyout offers over the years, and I’ve never regretted selling my shares, taking my cash, and moving on.
If you think about it, a merger is usually more like a divorce than a marriage – you end up poorer.
Part of the problem is that the banking industry has decided to reward their employees as you would a freelance investor; while still offering the benefits, security and fiscal obligation you would offer an employee.
Bottom line: This system is broken, we are in a recession, the banking industry has collapsed, we have quadrupled out national debt to make good on bad investments that were made based on an individual’s pursuit of greed coupled with no responsibity for their actions.
Sure, Congressional leadership is the stupid leading the blind - but the banking system is broken and arrogant. Are you telling me that only a select ‘few’ are capable to manage the billions of dollars that were lost? I’ll wager that I can lose billions of dollars too, and I don’t need a $20 Million dollar bonus to take a risky gamble with other people’s money - I’ll do it for $10 Million.
He probably simply liquidated his partnership interest, which was undoubtedly worth >$200 million.
All in all, Corzine made GS a giant bundle; he didn't 'louse up' their finances at all. The partners booted him because they REALLY didn't want to play in the LTCM affair, and he dragooned them into doing so, and they resented the hell out of it.
So, even after reading the article, you still don't get it? The risks are sooo much greater on Wall Street.
Moreover, the ability to withstand that risk and work long hours is a kind of talent, which is compensated accordingly --- like that of Michael Jordan, only less so. Otherwise, why do you think more people don't go to Wall Street? If the prospect is to make $750,000 on the 3rd year after MBA, why doesn't every UPS driver get an MBA and try for that job? In just 5 year he would break even.
He does not do that because of risk that he does not have on the present job.
"folks outside wall street have no sympathy for them."
No moral code requires sympathy for these folks, and they don ask for it.
What we witness, however, is not the lack of sympathy but demonization. Such demonization occurred only once in our history before: in 1930s, when "progressives," socialists and fasscism-sypmathizers were in power. Juas as now, they used envy and class warfare to demonize market-makers.
I am surprised you managed to overlook all of that and notices only "lack of sympathy." Modern-day conservatives are real liberals when it comes to ECONOMIC freedom.
Contracts of senior management are very complex (in part because of our ridiculous tax code), just like those of movie stars, basketball players, etc. They belong together for a reason: contrary to what socialists tell you, to lead a company requires talent.
Now, much of what CEOs get is not actually a bonus but a form of deferred (for tax reasons) compensation --- just as if you would agree to get half of your salary this year and half the next. Unfortunately, "bonus" is used in all these cases, which is misleading.
Further, managers are often hired and promised a bonus for a specific task: e.g., increase market share by 5%. If that objective is achieved, what does it matter whether the company as a whole is profitable or not?
There are also other issues. FOr instance, the brilliant turn-around specialist slows down the decline of a company --- a real achievement --- but the co is not yet profitable. Should (s)he not get a bonus for the job well done?
Finally and most importantly, their total compensation is determined by the market just like any other. If these talented people do not EXPECT to be compensated properly, they will go elsewhere.
That is not a direct comparison. Most people understand these words as "hazard pay," but "combat pay" is simply more familiar.
Exactly: he was good at what he did. Do you have any evidence to the contrary?
Sorry, I’ve met some great CEO”s like Bill Gates and Michael Dell; both gazillionares.
So much of it is pure luck, timing, right place at the right time - that gets your foot in the door. After that, it’s having the right people in the right places, making the right decisions.
No bank expert is worth tens of millions, chances are there are a plethora of people who can do the job just as well - to prove my point, if these ‘experts’ were so outstanding at their job, why are we in a depression and bailing their butts out?
Folks watching their 401Ks should notice what happened to those savings over the last 20 years --- and thank those dynamic guys that made it happened. I am not even talking about the alternatives: chronic unemployment in France and Spain (now 18%), etc. Hamper Wall Street and you will get the same "paradise" they have in Europe.
Most importantly, parsy, why do you assume that 401K decreased in value because of Wall Street rathet than government? It's actually the government that MANDATED to issue bad loans, at a specified and increasing rate from 1998 through 2007. Home ownership increased from 65%, where is had stayed for a long time, to 69%. These 4% of the entire American population (12M people) could not buy a house for decades, no matter what Wall Street and other markets did. Now, the government DECREED that these people should be able to get a house (bad loans).
Wall Street and other markets do not create demand --- they satisfy it. Government's demand for bad loans was accommodated, but it is that demand that decreased your 401K.
Bush's fault.
So, what surprises you here? One can be a wonderful son and a bad husband or father. A criminal organization can still be a meritocracy --- what's the surprise?
"This reminds me a lot of the movie in the 80’s — WALL STREET ( where we got the phrase “Greed is Good”).
No, we got that phrase from Adam Smith's "Wealth of Nations," which is as old as our country.
"Has anyone out there ever stop to consider if what they’re doing has any real social or economic value ? Are they really creating anything ?"
Yes, the answer is widely available. Wall Street is a collection of markets. Just like in any other marketplace, they FACILITATE trade. Imagine how costly it would be if apple growers could not sell their apples in the marketplace, and consumers could not buy them. Wall Street is a collection of such marketplaces, which allows the rest of the economy produce more wealth and make us more wealthy individually.
So, meeting them does not make you knowledgeable about what they are paid for. You can meet a mathematician --- will you understand, then, what his is paid for?
"So much of it is pure luck, timing, right place at the right time - that gets your foot in the door. "
So it is with every talent. The greatest mathematician ever, Karl Gauss, would not have been heard of where it not for great many mentors that supported his early development. If not for that "foot in the door," we would not know his name today. Does that contradict the fact that he was the greatest mathematician?
"ter that, it’s having the right people in the right places, making the right decisions."
Now you are talking. Substitute "Michael Jordan" for "Bill Gates" in your post. What do you get? Well, it was lucky for Jordan to get noticed. And after that, it's all about being in the right place on the court at the right time, making the right decisions as to when to move in, when to shoot....
Well, yes, it's called talent. That's why he was paid 45M/year --- much, much more than Bill Gates ever got.
[You mix apples and oranges here: Bill gates is a billionaire because of his investments, not his salary. You could've been at roughly the same level if you too invested in MS stock, as did hundreds and hundreds of secretaries that famously retired as millionaires.]
"No bank expert is worth tens of millions, chances are there are a plethora of people who can do the job just as well"
No you simply make a declaration, without even an attempt to justify it. They you hedge with "chances are." No room for chances: just study how labor and capital markets work. Even Marx and Engels acknowledge that when the (risk-adjusted) profit rate is greater in one sector, the capital flows into that sector to reduce that rate. If holding real estate is more profitable, for instance, people start selling stocks in GE and Alcoa, and buy real estate.
No room for chances: if more people could do the bankers' jobs, more of them would flow into that sector, and the salaries would fall. We have witnessed this recently in programming (IT): after decades of shortages, oversupply of programmers drastically reduced their salaries. " prove my point, if these ‘experts’ were so outstanding at their job, why are we in a depression and bailing their butts out?"
You are a victim of socialist propaganda perpetuate by the schools and the media. Why do you even connect our present situation with Wall Street? Only because Barney Frank and the NYTimes told you so. (See my earlier post on the real reasons).
The same happened with the FDR legend created by the Left: he saved us from the Wall Street greed. In fact, it's been proven and overproven (yet hardly mentioned in the media or schools) that it is FDR's socialist/fascist policies that turned a recession into a major depression. (To be completely truthful, Hoover started badly by imposing tariffs that led to a tariff war and reduced our economy -- car industry by 60% in a year or so. While Hoover made mistakes, however, FDR acted out his ideology.) If interested, read Friedman's classic analysis, but it is very long. If you want something short, read "FDR's Folly" and "New Deal or Raw Deal."
And stop unwittingly repeating socialist propaganda, Mr. Conservative.
Wall Street did not create risk of bad loans --- the modification of Community Reinvestment Act in 1998 did. It mandated a progressively increasing number of bad loans to be issued. As a result homeonwership rate increased from a stable 65% to 69% --- that's loans to 12M Americans we are dealing with. Wall Street is like a car --- it drives you as directed but it does not tell you were to go. It accommodated the government (with securitization, etc) but it did not create the problem.
Finally, you hold a typical socialist belief that the regulators KNOW and we only need to employ them. They do not, and have a lesser chance of knowing that a decentralized (free-market) management of the economy.
You are engaging in revisionist history, I believe unintentionally. The little “Gov’t made us do it” excuse is not supported by the facts. CRA loans were never more than about 3% of the loans. I can find cites again if you need them.
The blame is Wall Street’s. The gov’t’s blame is in not stopping them. Hopefully, future regulation will stop them.
For your reading pleasure:
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
High-risk mortgage loans and lending/borrowing practices
In the years before the crisis, the behavior of lenders changed dramatically. Lenders offered more and more loans to higher-risk borrowers.[70][71] Subprime mortgages amounted to $35 billion (5% of total originations) in 1994,[72] 9% in 1996,[73] $160 billion (13%) in 1999,[72] and $600 billion (20%) in 2006.[73][74][75] A study by the Federal Reserve found that the average difference between subprime and prime mortgage interest rates (the “subprime markup”) declined significantly between 2001 and 2007. The combination of declining risk premia and credit standards is common to boom and bust credit cycles.[76]
In addition to considering higher-risk borrowers, lenders have offered increasingly risky loan options and borrowing incentives. In 2005, the median down payment for first-time home buyers was 2%, with 43% of those buyers making no down payment whatsoever.[77] By comparison, China has down payment requirements that exceed 20%, with higher amounts for non-primary residences.[78]
Growth in mortgage loan fraud based upon US Department of the Treasury Suspicious Activity Report Analysis.
One high-risk option was the “No Income, No Job and no Assets” loans, sometimes referred to as Ninja loans. Another example is the interest-only adjustable-rate mortgage (ARM), which allows the homeowner to pay just the interest (not principal) during an initial period. Still another is a “payment option” loan, in which the homeowner can pay a variable amount, but any interest not paid is added to the principal. An estimated one-third of ARMs originated between 2004 and 2006 had “teaser” rates below 4%, which then increased significantly after some initial period, as much as doubling the monthly payment.[79]
The proportion of subprime ARM loans made to people with credit scores high enough to qualify for conventional mortgages with better terms increased from 41% in 2000 to 61% by 2006. However, there are many factors other than credit score that affect lending. In addition, mortgage brokers in some cases received incentives from lenders to offer subprime ARM’s even to those with credit ratings that merited a conforming (i.e., non-subprime) loan.[80]
Mortgage underwriting standards declined precipitously during the boom period. The use of automated loan approvals allowed loans to be made without appropriate review and documentation.[81] In 2007, 40% of all subprime loans resulted from automated underwriting.[82][83] The chairman of the Mortgage Bankers Association claimed that mortgage brokers, while profiting from the home loan boom, did not do enough to examine whether borrowers could repay.[84] Mortgage fraud by lenders and borrowers increased enormously. [85] In 2004, the Federal Bureau of Investigation warned of an “epidemic” in mortgage fraud, an important credit risk of nonprime mortgage lending, which, they said, could lead to “a problem that could have as much impact as the S&L crisis”.[86] [87][88][89]
So why did lending standards decline? In a Peabody Award winning program, NPR correspondents argued that a “Giant Pool of Money” (represented by $70 trillion in worldwide fixed income investments) sought higher yields than those offered by U.S. Treasury bonds early in the decade. Further, this pool of money had roughly doubled in size from 2000 to 2007, yet the supply of relatively safe, income generating investments had not grown as fast. Investment banks on Wall Street answered this demand with financial innovation such as the mortgage-backed security (MBS) and collateralized debt obligation (CDO), which were assigned safe ratings by the credit rating agencies. In effect, Wall Street connected this pool of money to the mortgage market in the U.S., with enormous fees accruing to those throughout the mortgage supply chain, from the mortgage broker selling the loans, to small banks that funded the brokers, to the giant investment banks behind them. By approximately 2003, the supply of mortgages originated at traditional lending standards had been exhausted. However, continued strong demand for MBS and CDO began to drive down lending standards, as long as mortgages could still be sold along the supply chain. Eventually, this speculative bubble proved unsustainable. NPR described it this way:[90]
The problem was that even though housing prices were going through the roof, people weren’t making any more money. From 2000 to 2007, the median household income stayed flat. And so the more prices rose, the more tenuous the whole thing became. No matter how lax lending standards got, no matter how many exotic mortgage products were created to shoehorn people into homes they couldn’t possibly afford, no matter what the mortgage machine tried, the people just couldn’t swing it. By late 2006, the average home cost nearly four times what the average family made. Historically it was between two and three times. And mortgage lenders noticed something that they’d almost never seen before. People would close on a house, sign all the mortgage papers, and then default on their very first payment. No loss of a job, no medical emergency, they were underwater before they even started. And although no one could really hear it, that was probably the moment when one of the biggest speculative bubbles in American history popped.
parsy, who says stop believing all the “free market” fables
Horsecrap. Wall Street lobbied to get credit default swaps exempted from regulation. Wall Street converted mortgages into bundled securities and sold them to be as safe as government bonds. The list goes on and on - but the point is, Wall Street played a leading role in this fiasco, and pretending otherwise does nothing in preventing a re-run.
Finally, you hold a typical socialist belief that the regulators KNOW and we only need to employ them.
The regulators relaxed long-standing regulations (such as reserve requirements and Glass-Steagal) at the urging of the institutions. You fail again.
They do not, and have a lesser chance of knowing that a decentralized (free-market) management of the economy.
Yeah, Greenspan's image of a self-regulating financial sector was such a brilliant success, eh?
Do you mind telling us the remote island where you have spent the last two years? It sounds like a swell vacation spot to get away from the world.
If all Wall Street did was facilitate stock/bond sales/trades/purchases, then that would be a full time job and a necessary one. What earthly good do hedge funds do? Or day trading? Or most of these derivatives?
What Wall Street is more like now, IMHO, is as if professional sports permitted the players and coaches to make bets on the games.
parsy, who will send you some more later
Sorry, I don’t subscribe to hero worship.
If these ‘Supermen’ were worth 1% of what they get paid, we wouldn’t be in a recession right now. When a BOD is stupid enough to sign off on a contract that says a person gets an outrageous salary, without regard to how a company performs, I take issue with that.
One of the things you learn is that people are expendable, workers are expendable and I can assure you that Senior Managment is even more expendable. A bad manager can kill a company - but when a company signs off on what we have seen here - and there is no one who is apparently accountable - I take issue with that.
As for the “Michael Jordans” in the banking world, how many of these are there? Based upon Leighman Brothers alone, they have to have boasted over 1,000 such superstars. If they were superstars, Leighman Brothers would still be around.
The banking industry needs Conggress to get out, to stop screwing with it; but it also needs a good dose of reality. Paying someone millions, when the bank is failing is ridiculous. No other industry acts this irresponsibly; and no other industry puts a gun to our head and takes our money due to their failure to run their business intelligently.
Here’s the link to congressional report. Gov’t is criticized for NOT properly overseeing Fannie and Freddie.
http://republicans.oversight.house.gov/media/pdfs/20090707HousingCrisisReport.pdf
parsy, who says quit blaming the poor folks.
If the banks were doing fabulously well - you might have a leg to stand on. But wait .... oh yeah, the banking industry collapsed didn’t it? And how many millions of people are out of work? How many millions of people have lost their life’s savings? Aren’t we in a recession?
So, please stop the hero worship. Ain’t drinking the cool aide. We all got sold down the river, and you are telling me that the “financial genius’s” whose personal greed is responsible for this mess, deserve the multi-million dollar salaries.
Before these ‘financial geniuses’ took over, how did America survive 2 world wars and 200 years? I like the Steve Jobs model - pay them $1/yr and if they make the company profitable, they get some money. If they don’t make the company profitable, they don’t get anything and stand a good chance of being fired. The idea of “I get $10 Million if I fail, and I get $11 Million if I succeed” is assinine. Yes, even in banking ... that money comes from somewhere.
If the banks were doing fabulously well - you might have a leg to stand on.
You're in good company saying government has to take over what the private sector's screwed up, that's what everyone says about banks --sample headline: 3 more down: Bank failure tally hits 92.
Let's forget what everyone says and just look at banks. They're fine now but during the Reagan/GHBush years we had 2,935 bank failures. Let's have less Marx and more Reagan.
Who said anything about gov’t take over?
As for more Reagan, I couldn’t agree more. All I’ve said is that the banking system is horribly broken. The bonus’s paid out are entirely unrealistic and unsustainable - and I resent having a gun placed against my head and my money taken from me, my life’s savings taken from me; and given to people in the form of a bonus.
Don’t care if the banker invented a cure for cancer; if the bank fails to make a profit, no bonus. It’s just that simple. That system works just fine in every other industry.
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