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Guest Post: The Banker Bonus Diversion
Submitted by Deadhead
I am so tired of the absolute nonsensical and foolish approach in regards to Banker Bonuses taken by both the Obama administration as well as the bankers themselves. Here's what is really going on and what should should be going on if we lived in a world that was dependent on telling the truth, prudent financial management, reduction of systemic risk, and if a cure to our banking system malady is genuinely being sought.
If one accepts the postulation that the primary core of our banking system problem is the fact that many our our banks, including the group of 19 tagged as “Too Big to Fail”, have severe capital shortfalls, then one is forced to accept the fact that the solution to the problem requires a rebuilding of capital on the balance sheet. Gee, that's fairly complex, isn't it?
Here's the deal in a nutshell:
1. Banks have significant capital shortfalls that are being masked by FASB FAS 157 modifications that allow marking of assets to bank “models” versus a mark to market. Got a pile of CDOs or RMBS paper worth 30 cents on the dollar? No problem, mark it at 90 cents and watch the profits roll in. The egregious matter here is that both banks and U.S. Regulators continue to tout the high capital ratios of the group of 19 yet conveniently fail to mention that FASB 157 is the primary reason for this illusion. Do you guys think that these assets are going to magically run back up to par in the future? Do you guys think that a lot of this garbage is going to cash flow?
2. While on the subject of capital shortfalls, FASB FAS 166/167 provisions became effective November 2009 (after being postponed from November 2008, interestingly) for Q1 2010. ZH readers are aware that this requires that banks bring off balance sheet assets back on to the balance sheet and it is unlikely that this tsunami of garbage paper is worth anywhere near 100 cents on the dollar. With bank profits quite handsome for Q4, and capital accounts woefully inadequate, it would be prudent to allocate this profit to capital accounts to reserve for losses on this incoming pile of fecal matter, but, no, let's just kick the can down the road further. The FDIC has decided to give a pass to the banks for one and one half years to begin the process of allocating capital in regards these assets. Read it yourself: http://www.fdic.gov/news/news/press/2009/pr09230.html
3. With multiple billions of profit earned (engineered?) in Q4 2009, the bankers have decided to abandon prudent balance sheet management and put the vast majority of these profits in their pockets. This is the ultimate in piggishness as well as a dereliction of fiduciary responsibility to properly manage a balance sheet on the behalf of the bank's owners and bondholders. Then again, I'm not so sure that bank equity owners and bondholders are the smartest group in the world, as their investment rests on the good “graces” of the Obama administration regulatory ineptness and the Federal Reserve Bank, an organization with a track record that leaves much to be desired. Caveat Emptor.
4. U.S. Regulators have decided that they simply are not going to require the profits to be allocated to capital accounts for loan loss provisioning either. The citizenry of the USA have loaned and given (via Fed balance sheet purchases and who else knows what) the banks trillions of assistance because of these capital shortfalls and now that some money from profits is available for balance sheet reconstruction, our regulators have simply put their fingers in their ears and started yelling “La, La, La, La, I can't hear you”. This is a total and epic failure of the banking regulatory authorities in the U.S.
5. The Obama administration, now that the bankers are going to pocket the money, has decided to tax some of this money to fund stimulus version X.0, “X” being a number somewhere between the current number of stimulus items and the eventual Minsky moment. The point of the matter is that Obama's wall street endeared team (it's not political kids, it's the same group that ran the show under Bush, Clinton and many other Presidents) has, once again, failed in its responsibility to ensure proper bank capital standards and, once again, has left the door open for systemic risk. Helluva job, guys and gals!
Here's the simple answer folks.
The bankers should have taken every nickel of profit and allocated it to capital accounts to provision for loan losses: past, present, and future. The regulators should force every nickel on to the balance sheet irrespective of the menagerie of FASB FAS 157. The government should not be taking this needed capital from the banking system. If we follow this path for a few years, maybe we'll have a chance to avoid a complete zombification of our banking system.
I cannot believe after what we have been through since the lessons of Bear Stearns and Lehman that we are simply not fixing a not so complex matter.
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Hear, hear, DH. I'll be tweeting this article out and hoping it finds an audience. (My 50 followers are sure to send it viral).
I, too, fail to see how they banksters were able to scrape so much money out of the taxpayer trough and pretend it was nothing more than their own hard work and great investing that earned that money.
Full disclosure, I work for US Bank, and I truly believe that of the 19 TBTFs, not only are we the most prudent, but we are also probably the only remaining TBTF that TPTB would let fail. It's pretty frustrating competing against ghosts. (Or, zombies, as the case may be). Our bonus pool ain't nothing compared to the Squid.
thanks for your disclosure Don. Over the years (i worked for one of the 19 for many years, a big regional) I had always respected the prudent approach taken by USB and admired what I would call an old fashioned, conservative approach to lending. I simply don't know enough about their current balance sheet and what they were up to when banks started getting out of hand in the early 2000 era.
by the way, TPTB won't let USB fail as long as Warren Buffett retains his enormous stake. Warren is simply part of the oligarchy and he is surely tied in tightly to Obama and his crew.
DH great job .....
does anyone have the computer firepower,
and knowhow to create a spreadsheet for these 19 .....
i.e., 2001, 2003, 2005, 2007, 2009 for the relevant balance sheets & accounts .....
so we know the total amount of de-crapifying that is needed .....
http://moveyourmoney.info/
Off topic, but I had a great idea for Obama Greenn jobs program. The creation of a whole new class of day traders. The government loans 10,000 dollars to every unemployed man who is willing to keep his eyes glues to the chart all day and become a day trader. Up, down sideways, which is it going? You decide, as a new day trader. The government will pay you $10 per hour to day trade. Any profits you make, you receive 20%. This program creates a green job, and helps keep the stock markewt up, so the gov. dosen't have too!
www.WallStOnio.blogspot.com
As a US Bank corporate customer, I will run it by my contacts to confirm. Thanks.
thanks, please keep in touch on this.
When your political aspirations depend on the amount of money you can generate, invariably, the best source of money is going to motivate your actions. If Obama really wanted change, he would have relegated himself to a single term and made difficult decisions knowing that his own aspirations needed to be forgotten so that he could make the needed change.
All this anger at the bankers is misdirected. Don't blame the player, blame the game. The real crime is that Obama hasn't changed the game and so he has done nothing to improve the financial environment for the average US citizens.
Until the average US citizen gives Obama a reason to enact change, he won't. This is the same for whomever is elected in 2010 and 2012 ad naseum.
If Obama went in there and done what needed to be done, I believe he would win a 2nd term as a write-in.
Ironic, don't you think.
I thinl it's time to scrape all derivative contractsand go back to the model of just stock and bonds. That's all we really need anyway. Derivatives no longer provide a social benifit that justifies the coist. It is like creating money out of thin air. The fact thaT THESE CONTRACTS WERE PAID 100 CENTS on the dollar, giving them full faith and credit of the US gov., no different thean the money comng of the printing press.
Dead nuts on.
Obama heckled off the stage:
http://www.huffingtonpost.com/2010/01/17/obama-coakley-speech-pres_n_426...
To follow up on your point Harbourcity... (IMO) one of the many needed changes required is a single six year term for President, removing the systemic barrier to change that requires second term campaign planning on day one.
Ban professional lobbying, and limit and cover presidential / congressional campaign costs with public funds, and maybe just maybe we set the stage for real change.
The current 4-year term is fine. Look at the history; Johnson didn't run in 68, Ford lost in 76, as did Bush I. Clinton changed the direction of his policies in order to face re-election.
It's great to have change, but it's also nice to alter mistakes made every 4 years instead of giving a blank check to someone for 6 years.
I agree about the lobbying as it supercedes the populace who do not organize as lobbyists. No public funds for elections as it takes a freedom away from those whose political voice is heard by not speaking. However, a limit on the total amount spent might be productive, particularly for incumbants who are playing with the house's money from the start. And what the hell is this thing called "bundling"? It's akin to lobbying and should be banned.
There is no 'game' without players, fer krissakes!
There you go again, acting like banks are run like real businesses...
amen, dh.
unfortunately, the administration, regulators, et al, suspended or bent the rules and made all decisions in the banks' favor assuming the banks would behave nicely to prepare for the rainy day (understatement) which is still imminent. instead, the banks are biting the hand that feeds and everyone is claiming to be powerless to prevent it. in a perfect world, the administration's reaction would be to enforce all fasb rules, pull the plug on all backstops and other forms of support and let the cards fall as they may. of course, this will never happen because the administration is bought and paid for. truly disgusting.
always enjoy your posts. regards.
How the SEC or some other government entity cannot see this is either utter incompetency or criminal behavior. The fact that they are willing to take that much bonus money shows they could not give a shit less whether the bank survives or not. They know the whole thing is a charade and they are trying to siphon as much cash out of us as they can before it all implodes. Guns, silver, gold and non-hybrid seeds, as much as it seems implausible, I can't see it continuing to go on. I think China is due for some kind of defiant action. They seem like they are sick of our all high and mighty bullshit. We may be a military superpower but we're like the guy at work that keeps bumming cigarettes but never brings any of his own, sooner or later he's told to go shit in his hat.
+. Catchy handle.
Catchy avatar! ;)
+. Catchy handle.
this Coakley person in Mass is a piece of work (right now she's bashing the bonuses the banksters got - what hypocrisy)
watch live now with Obama
http://www.c-span.org/flvPop.aspx?src=org1&s=637.114&e=-1&live=F&pop=Y&s...
(I junked myself by accident)
↓
(I junked myself by accident)
too funny anon. a little wake and bake today? hehe
coakley is done. put a fork in that nasty bitch. downtown scotty brown has the momentum. he's the real deal and deserves a seat at the table.
The analogy that comes to mind when I think of what Wall Street is doing to the American taxpayer is that of the Russian "oligarchs" who profited so enormously from the collapse of the Soviet Union. It is beyond belief what these people are getting away with.
One of my favorite quotes is David Hume's "Nothing is more surprising than the easiness with which the many are governed by the few". "Nothing", indeed.
It is also surprising how much abuse the many will take before they stand up to the few.
The few, have many guns.
While the aspect of the few having many guns will always be a major part of the story, the guns aren't primarily what keeps the many in line. It's the self policing (mentally and physically) of the many that keeps the many in line.
The few can not possibly rule without the consent of the many. This is true regardless of the force used by the few. They simply can't control the many without the cooperation of the vast majority of the many. This is done using many methods, such as propaganda, indoctrination and mind control as well as using portions of the many (police, military, bureaucracy etc) to corral the many.
Even though we may be many in numbers, we have effectively been isolated and marginalized one mind at a time through the control system's structures, beginning at home with our parents (who teach us to submit and conform just as they did) progressing through the schools (which teach us to submit and conform through repitition and indoctrination) then the corporate power structure and our social hierarchy.
Extremely complex and beautifully simple, these techniques have been honed through thousands of years of live on-the-run practice. Don't make the mistake of assuming we can topple the control system by toppling the government. We are the control system. This is why old governments are replaced with new governments that either already are or rapidly become just as oppressive as the old one was.
4 legs good. 2 legs bad. Still waiting for the sequel..was told it would be a year.
Good to see you on the byline DH.
Your comment backs up your name.... well done sir.
The few, have many guns.
I agree with your comparison (Wall St as Russian robber barrons).
So to which country will our Abramovichs flee?
I ran through that exercise long ago, and came up with two possibilities.
It's fairly easy to rule out China (likelyhood of Gov't hindrance, not help), Africa (too unstable), and the middle east (Unstable, and existing ruler/robber barons). I expect the EU to go down with the USA. I suspect that South America will succumb to another run of collapse if things get really bad, and some of the nations down there are already too left leaning for my liking, which could either spread, or result in conflict between neighbors.
This really only leaves India and Russia. Russia going full circle?? I don't know, I have no true intel with regards to Russia, but what little I've heard makes me guess that the cons outweigh the pros. That leaves India. Modern infrastructure and education in many places, a residual caste system to keep the plebes in their place, and a gov't system already fully fluent in 'supporting' the 'contributor'.
I'd love to hear anyone else's ideas.
a Deckhand
India? Really? I don't mean to be a smart ass or be condescending to you or any Indians frequenting this site, but that sounds like another hopium at its best. Sir/Ma'am, have you visited India for an extended period of time. You put forth four points that seems to suggest that they will be beneficial to the subcontinent.
Modern Infrastructure - Outside of the 10 large cities, where the infrastructure is less "sucking", infrastructure in most Indian cities just S-U-C-K-S. Most of those large cities are bursting at their seams. The most basic amenities- power and clean water - are in short supplies in most Indian cities. There are places, where even a dial up connection is extremely difficult to come by. No, I am not talking about villages, they are capitals of Indian states where this problem is encountered. And even if the dial up connection is available, because of power failures your plans are rendered useless.
Education in many place - Okay I give you this. http://timesofindia.indiatimes.com/india/Centre-to-derecognize-44-deemed...
And that is just the tip of the iceberg.
Caste System - You put forth the proposition that caste system is good for India's future? Nothign more to say there.
And, finally, Government - Of 159 countries surveyed, India secured a lowly spot at number 88 of the most corrupt places on the planet, along with unlikely companion countries such as Gabon, Mali, Moldova, Tanzania and Iran. (Times of India). I can name hundreds of politician who are milking the system, but I'll name just one. Mayawati.
http://www.countercurrents.org/darapuri040408.htm
http://timesofindia.indiatimes.com/Mayawatis_wealth_is_just_affection_/r...
Need I say more?
hear hear BSInc. to which you should add
"So long as men worship the Caesars and Napoleons, Caesars and Napoleons will duly arise and make them miserable" A.Huxley
The first thought that comes to my mind is that the proposed penalty tax will just be passed on to bank customers. I watched a White house spokeswoman completely ignore this question when it was posed to her and of course the MSM mouthpiece didn't press her on it.
This game of the financial companies and government pointing fingers at each other should elicit only one response, punishment for all of them. All of the game players should spend the rest of their lives in slave labor camps.
The first thought that comes to my mind is that the proposed penalty tax will just be passed on to bank customers.
Bank ALCO (asset, liability pricing committee) models being worked on already I am confident. Couple of bps drop in deposit rates, couple of bps increase in loan rates covers this stuff. Robo's infamous grandma vultures will be the only ones to notice that their bank money market accounts went from 0.30% to 0.26%. hey, another good reason to invest in US Treasury and start saving like Obama and Geithner have been promoting.
D.C. is controlled by NYC, who get their taxes from the farce of a banking system, that I understand. The funny thing is that CA and the rest are really getting hosed by their own corrupt reps otherwise they would demand bigger bailouts for the states.
Obama knows his future is tied to the bankers' bonuses. In his first (and only) Presidential electoral victory, he supposedly built his campaign warchest from millions of small contributors. Even if it is true that he got money from the masses, that spigot will be closed. The masses are disillusioned AND fearful for their jobs/wealth. Even two Domino's pizzas look better than ten bucks to an empty suit.
The bankers, on the other hand, flush with record bonuses, will be more than happy to fill Obama's coffers so long as he keeps their gravy train on track. He will.
Of those millions of small contributors, were thousands and thousands of wall street bankers who donated the maximum possible ($2400 I believe)
10,000 bankers contributing the maximum amount trumps a million people donating, say, $20 each.
In addition, the historical underpinnings of these compensation plan designs was formed back when the majority of the profit making arms of the banks were manned by partners who as individuals at the top of their profession made the difference in the levels of profits.
Not so these days. Millions of dollars in infrastructure and instutitonal advantages in information capture mean that a much higher percentage of the profit difference are institutional and infrastructure advantages...not a reflection of individual "talent"
For the same reason that selling a new kind of software is rewarded with a higher commission rate than the sales rep who sells an industry standard; or selling for a start up Soda Beverage should be paid a higher commission than selling for Coke or Pepsi, selling stuff for one of the five TBTF is not the individual struggle (I am not saying they do not work just as hard...just that the mix of institutional and Indivdual advantages that leads to success has changed) it used to be. imho.
Lastly, of course, is it talent or just the ability to spin "working for this moment in this best of all possible worlds packages of complexity and jargon" that separates the top earners from the average? Or the Institutions ability to cover elsewhere/other instruments what ever bets it makes for its clients?
Question for all of you reg. experts. Does the FASB 166/167 18 month delay mean JUST the money being set aside is delayed?
Do the banks still need to provide details on what they have been holding off balance sheet and what is now on balance sheet as of Q1 2010?
I'm assuming even when this stuff goes on book the details will be so vague nobody will still know what they are holding and what the exposure is. Much like nobody knows what type of MBS the banks hold now, what did they pay and what are they valued at currently.
I am by no means an expert on these areas but will take a stab and hope that more qualified folks (reggie would be a good one, certainly chris whalen, and I know Meredith hangs around here and we haven't forgotten about that lunch in july with sheila bair I might add) chirp in.
FASB 166/167 requires that the assets be shown on the balance sheet as of Q1 2010. As to the details (or vagueries as the case may be) I simply don't know. Certainly they can be marked according to the current FASB 157 paradigm, but there is also a requirement that a mark to market value be disclosed in the financial statement as I understand. I recall someone writing about RF's balance sheet and that when their book was marked to market per their own financial statement, they were pretty toasty.
It will be interesting to see the Q1 statements broken down by the analytic types (independent analysts, that is, not the sell side pumpers on bianco's bac/ml team that is more overweight the financials for 2010 than the entire cast of that "biggest loser" show).
I know you want the banks to feel pain, but the accounting principles behind 166/167 are absurd - it is bad accounting. The loans sold will never result in real liability to those who sold them (the economic pain is/will be borne by the owners of those loans -- CDOs, CLOs etc).
From Seeking Alpha:
When the banking system was being restructured under FDR, the top three execs of any firms receiving aid had to tender their resignations. Getting rid of Geithner and the bank chiefs might not fix anything, but "it’s hard to imagine the architects of our current misfortune suddenly metamorphosing" into leaders who can safeguard our financial system.
Obama knows his future is tied to the bankers' bonuses............ The bankers, on the other hand, flush with record bonuses, will be more than happy to fill Obama's coffers so long as he keeps their gravy train on track. He will.
I cannot say that I disagree with your statement as it certainly gone this way and if past history is a window to the future......
The other side of the coin, which is definitely and clearly in play, is that even among his most loyal base (he's already losing independents big time), there is an enormous disgust and dissatisfaction with Obama's actions in regards to the banks and wall street. It has become plainly obvious by perusing the main stream media that Obama's rather amateurish attempts to respond to the anti bank populism (the Federal Hall speech on credit cards was simply an embarrassment to the office of the Presidency, i.e. "hey, can you guys please cut it out? hey, how about if you guys volunteer to stop the credit card shenanigans before the new law?") is pretty weak sauce, lots of flowery words but no bite.
I read the lib blogs alot to see what his own say and spend most of that time on HuffPo, which I view as Obama worshipper central numero uno. That crew of his supporters and worshippers are becoming vicious against him due to the actions of geithner, summers, bernanke (they lose the "it's all bush's fault" argument big time on Obama's re-nomination of Bernanke).
Obama will likely play both sides of the fence, i.e. keep the status quo by being the Treserve puppet and avoid making the hard decisions to fix this mess because it will cause some pain as well as continuing to jawbone the banks publicly to give some raw meat to the base.
I gotta say (and I'll probably be wrong, I'll certainly get blasted by a number of ZHers for my "naivete") that I think we have hit a tipping point in the USA as far as Americans figuring out that they have gotten phucked by the Treserve/Banking/Wall street club and that the citizenry is not going to let this one go. Political victory in the mid terms and next Presidential election belongs to those candidates that will genuinely stand up to the Treserve/Wall Street complex and acknowledge to Americans that they have been screwed, explain how it has been done, promise to prosecute, and offer a course of action that returns banking to its former role in a glass steagall type of environment.
Obama is not stupid, he is a great politician. Like any politician, he also knows that crushing the banksters is THE trump card of all time. If you are a pol and have that kind of trump card, why would you play it now when you are so far from re-election? I think their current strategy of extend+pretend is just that. If things magically work out and we get growth, Obama becomes popular again right in time for re-election. If they don't, Obama comes down hard on the banksters and becomes popular again right in time for the re-election. Any top-grade politician would do the exact same thing.
Jesus
politicians rarely benefit by destroying their key supporting clique. they winnow them out over time. unfortunately the culture of corruption then infects new recruits and nothing changes.
to get a clear explanation from a man with an excellent track record of political forecasting i suggest you listen to bueno de mesquite, political scientist at (mp3)
http://www.econtalk.org/archives/2007/02/bruce_bueno_de.html
machiavelli suggests new rulers employ a hatchet-man to crush existing powers and then to gain popularity destroy the hatchet-man. this works if done quickly but for BO its too late to follow this path.
Great reply and great original post, deadhead.
The Obama Administration is trying to diffuse a much larger issue by thowing populist rhetoric for a very short term gain. Unfortunately for them, it appears that voter rage is buliding-- and the upcoming Massachusetts election will be very telling on what should be expected in November. If an incumbent Democrat loses this state, hoo-boy...
I'm hoping that those in the alternative media continue to focus on the massive cover-up taking place, especially with the players in the Treserve. Interestingly enough, even MSM is picking up a little bit on this massive theft that is being quietly endorsed by our political duopoly.
The key is keeping the eye on the ball-- and as deadhead correctly points out-- there will be many tricks up this administration's sleeves to divert attention from the real crimes.
Again, nice job.
J Dimon - bankster of the decade, CNBS golden boy went on record to say by MID-2010 banks will be OVER capitalized. How does that fit into your formula DH?
What if the banks continue to grow their curve/vol riding investments and "grow" out of the last 3 trillion in writedowns? More Treasuries, more short CDs, more short VOL in various packages, never to be marked to market but to where they want/need them. Bonus pool 2010 will make this yers a walk in the park...look for huge expansions in I swap derivatives this quarter....grow current net interest spread or die.
I agree with Jamie Dimon (and this guy?):
- banks are OVER capitalized
- they should be increasing leverage (i.e. lending!)
- its too bad for incompentent regulators, FDIC, bank mgmt
And the original posts makes a number of silly statements... like "mark them to 90 and let the profits roll in".. (so these bond have no cash flow problems, why mark them lower?). or "no one actually thinks this stuff will return to par":
- have you seen credit markets over the past year? mortgage and HY bonds are UP 50-300%... so it seems "m-t-m" was pretty silly 1-yr ago.
197110 said:
And the original posts makes a number of silly statements... like "mark them to 90 and let the profits roll in".. (so these bond have no cash flow problems, why mark them lower?). or "no one actually thinks this stuff will return to par":
Based on the entirety of your comment, I've decided not to spend time debating with you. Quickly, though, my "mark them to 90, etc" statement describes exactly what happened for Q1 2009 earnings for many banks. A magnificent example is the approach WFC took on this matter with their now infamous Q1 2009 earnings pre-announcement on a Friday afternoon and the subsequent information detailed in their quarterly statement.
Lastly, I suspect that a number of these impaired items are experiencing cash flow problems....
though you seem to be a real tool/troll, i do wish you the best and invite you to come back when you have something to offer that approaches the realm of sanity.
J Dimon - bankster of the decade, CNBS golden boy went on record to say by MID-2010 banks will be OVER capitalized. How does that fit into your formula DH?
Dimon did make a statement to that effect and i recall reading it last week.
As I and numerous others who are more adept at bank balance sheet analysis than me have already noted, these statements by the bankers (as well as the regulators, Treserve) are predicated on the current FASB FAS 157 mods that allow a mark to model, not market.
If you own a home in a development with similar structures and you purchased the home for 600k like your neighbors and the ones that are selling now go for 300k, it is probably not unreasonable to mark your personal balance sheet with a 300k residential real estate asset. If you seek a loan on that house, certainly an appraiser is going to use the comps in your development and come up very close to the current selling price. I'll bet you anything that James Dimon will not give you a loan for any more than 300k at the absolute max. The difference between the homeowner and JPM et. al. is that they CAN value the exact same home (actually the current mortgage on such) at the original mortgage value, which in most cases was probably in the 570-600k range.
I would be interested to see Mr. Dimon's answer if someone had asked if his overcapitalized statement was predicated on 157, but nobody has asked. Then again, they don't need to ask because the mark to model is now sanctioned by FASB as well as US regulatory authorities, which one could reasonably say is the current 'law of the land' so to speak. If one believes that marking bank assets in this fashion can go on forever without negative side effects, they are welcome to that opinion. I think there are and will be reactions to these actions, which goes to your question of:
What if the banks continue to grow their curve/vol riding investments and "grow" out of the last 3 trillion in writedowns?
If they are able to grow out of the 3 trillion, then ultimately things will be fine as the "grow out" phrase assumes the debt will either eventually be paid or written down. if the debt is paid, that's fantastic for the entire system and would be ideal in my view: I also think that it is foolish to believe in that scenario as some percentage will default, be written off. Certainly the Treserve complex and the banks have shown that this "grow out of the mess" strategy is clearly their plan. My question back to you is how are they going to grow out of the mess if the profits they make are NOT going back to the capital accounts but are removed from the bank as personal compensation to the bankers? or dividends for that matter? one must also take into consideration length of time (it will be long) and the conundrum of an economy highly dependend on credit expansion and a banking system that takes a blow to the balance sheet (reserving) every time they make a loan?
Deadhead:
Thank you. I have some additional ideas.
What could have fixed the problem: equity holders of these banks get wiped out and senior creditors take over shepherding these whores out of bankruptcy.
Here's another marvelous fix for today: the shareholders of these banks get a brain and vote every board member out. First action item: start with making a new management team.
Capitalism does work if you let it.
I would add that shareholders dumping their common equity might get some attention as well.
the "move your money" campaign has caught on, has some virality, and definitely pisses the banks off because losing core deposits and core depositors is the low fruit on the tree of profitability.
once people realize that most of their mutual funds and 401k funds own bank stocks, and if this is tied into the "move your money" campaign, it could be a real doozy.
"once people realize that most of their mutual funds and 401k funds own bank stocks, and if this is tied into the "move your money" campaign, it could be a real doozy."
Let's open our minds for a second and ponder what I'm about to lay out. It's just an idea and I could be way off base. But it's clear to me and many others that there is no banking/economic system fix being implemented, just extend and pretend. So what is the end game for the powers that be, the so called powers behind the throne?
Consider this. They understand they walk a fine line between panicking the public into doing their bidding and panicking the public into revolt. So if they understand that the system is not being fixed (because they aren't trying) and by extension is even more susceptible to collapse (after layer upon layer of public debit has been added to the stinking heap) then after "they" have made whatever moves they must be making to protect themselves, how will they let the system collapse in such a way that it does not show their manipulation, thus attracting the lynchings their way?
This is one way they could do it. By encouraging the citizens to collapse the system, or at least the appearance of the citizens collapsing the system. Then, once each citizen has blood on their hands, the powers that be rush in with a "new and improved" global financial system (which is their end goal all along) to help the citizens out of the mess the citizens created when they began boycotting the banks and then pulling their money out of the stock and bond markets in protest of the "bad" banker bonuses and general greed and corruption.
This is an old method of manipulation, used quite successfully for centuries, to get the mobs to destroy themselves (and any enemies the powers that be might have along the way) before swooping back in to save the citizens from themselves. I'm very suspicious of this "move your money" movement because of the people behind it. Governments have always infiltrated and/or precipitated populous movements. For example, look at the infiltrations into the Black Panthers and the Labor movements of the 60's and 70's as proof. How many "terrorist" attack arrests would have happened during the past 8 years without the authorities using "agent provocateurs" to fan the flames.
Let's keep our eyes wide open here folks and not assume any grass roots efforts are what they appear to be.
too true, at this stage of the collapse they must be steering it towards an "endgame" of some sort. what i would like to know is what. they hate gold and silver so it makes me think they will use it in some way, not just market manipulation, (etf's etc).
because the ponzi scheme was ' pulled ' with the drawdown of 550 billion on sept 2008 it is only logical that the end result is meticulously planned (they are far too control freakish to just 'wing it')
lets be honest , if it can be worked out, the people that contribute here have a head start. imho
"they hate gold and silver so it makes me think they will use it in some way, not just market manipulation, (etf's etc)."
I absolutely think they have a plan for Gold and Silver. Once the currencies have been collapsed, they will need to introduce a new currency. One of the methods they can use to get the population to buy into this new currency is to back it with some Gold and Silver.
It doesn't need to be fully back by the PM's, just enough to give the new currency more credibility than the old currency. Do you want that week old stinking rotten corpse over there or this fresh kill I have in the refrigerator?
Hmmmmmm........ let me think about it. I know, I'll take the fresh kill backed by some Gold and Silver.
CD - Why would anyone that subscribes to the notion of failed institutions suddenly subscribe to the notion that those who led these failed institutions are the answer? Conditioning? Desire for "safety and security" when it was the lack of safety & security that led to the loss of belief in various institutions and more importantly, the systems and those that manipulate them that led to their corruption?
I suspect that the classic formulas won't work as well this time around. After all, the evidence of these failures is all around us....
Miles,
You raise a good point. And in a rational and calm world, people might/should/may use their higher brain functions to think through what led to the failed institutions and why. I agree that classic formulas won't work as well this time around. So I suspect "they" might feel the need to push people closer to the brink in order to get what they want. And it's now clear to me they will do so with little, if any, remorse.
Alas, we have Haiti as an example of what happens to society when it's severely disrupted. I use Haiti only as an example of the worse case to illustrate how mechanisms, social order and logic break down under severe stress. And as the event plays out over days and weeks, it gets even worse before it incrementally gets better.
Stress the population enough with an economic collapse/breakdown and people revert back to lower level thinking and logic. Think Maslow's hierarchy of needs and then think about what happened during the market crash of Sept, Oct and Nov of 2008 and how people threw reason and logic out the door and panicked.
I often say that chaos and anarchy (even in America, especially in America) is only 6 missed meals away.
http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs
And you don't think the shareholders of JPM are pretty darn happy with the current management team?? Are you crazy? Have you seen their share price?? Did you see the deal the government GAVE them for Bear Stearns?
Try going after your elected representative while you are at it?
Just wait til the tax burden kicks in.
And no, I wouldn't be. If you invested in 2007 common stock, you are still at a loss even though the govt recapitalized your investment, handed them assets on a platter, and they don't even have to mark to market.
The only silver lining on this disgusting dark cloud is that maybe Obama inadvertently gave the bankers enough rope to hang themselves with.
The bankers and politicians are sociopaths who are empty inside. Over reacting? Perhaps, but then I ask myself if decent folk would behave in this manner. DH wouldn't. So they merely act the part they think the commoners want to see until their distorted view loses all contact with reality and they are morally adrift. The natural ability that you and I have to intuit the feelings of other people is lacking so the politicians and bankers are always behind the curve in that respect. Their responses are always too little and too late, and strikes normal people as more than a little false. Only by allowing their pathology to manifest itself without the natural checks and balances can it be easily observed.
So there it is in plain view for all who want to see it. Blatant acts of selfishness that defy the common sense solutions proposed in this humble post. The lack of a clear intent to fix the system is no longer shocking to us. It's getting old and tiresome. Rage and resignation now mingle with each other. I'm feeling that the only way there will be meaningful change is to let this sucker die, and perhaps a new attitude will be encouraged in the aftermath of the failed policies and fraud.
Excellent point. You eloquently put into words what many of us have been thinking. A massive fraud has been perpetrated out there for everyone to see and yet the perps have no fear of consequence. Everyday we learn that, as deep as the corruption runs, there's a new email exchange discovery,etc., etc., providing evidence that it's actually much worse than we had suspected. The complicity, fraud, moral hazard... is of epic proportions.
I'm not sure anything better will come out of the inevitable collapse though, unless new faces come to power that haven't been co-opted by big money. Unfortunately, I can only think of a couple in our Federal government of whom I believe that to be the case. I wouldn't be surprised if the end game is to force a global reset. Then out of the ashes the N W O will emerge to "save" us. Never let a crisis go to waste, right ?
Winisk,
You are speaking of an ancient and wise teaching handed down for thousands of years, something that is repeated again and again in ancient philosophical, religious and historical texts from every country, region and period of time.
Give evil wide berth. Do not directly oppose it for evil feeds upon your resistance, the energy expended in the resistance all good men and women feel is their duty to mount. Instead, allow evil to turn upon itself for nourishment once it's normal energy source, our resistance, is removed.
This is a path I'm beginning to understand is the only way out of this mess. In order to take it, we must first comes to terms with the idea that we will never go back to what we had and the way things were. We must concede defeat so that we may win, just as an alcoholic must concede that s/he is powerless over alcohol, that s/he can't control it. Only then does the force of alcohol loose it's control over the alcoholic.
S/he finds that their obsession, their huge will and desire to control, was energizing the force. By removing the will to control, there is nothing left that needed to be controlled. The effort expended in attempting to control was simply being turned back against the controller. Their huge effort to control, their action was creating an equal and opposite reaction.
Once this threshold is crossed, we learn that in order to see all the other open doors around us, we must first stop trying to force open the locked door directly in front of us. Only by giving up our attempt to control do we gain the understanding that to attempt to control an uncontrollable object means that we are controlled by that object. Letting go of our need to control allows us to do everything else except that which we obsessed over and tried to control.
We are supplying 100% of the energy being used against us.
Thank you for an interesting comment. Do you happen to have any pointers to reading more about "the ancient and wise teaching?"
You completely lost me on this one, CD: whut?
the death of 'this sucker' is gaurenteed , its the replacement they're going to offer is what im worried about.
So this change in FAS 166 does this mean the end to off balance sheet SIV?
I swore I read months ago, most likely here that JPM has 200 trillion of interest rate swaps. Does this mean we will finally have concrete evidence that this is true?
Thanks in advance.
166/167 makes it much more difficult for off-balance sheet transactions - particularly if you are the servicer of the loans sold and/or retain a residual interest.
While all the bank haters might enjoy some of the consolidation effects, it actually is a pretty bad accounting principle. Retaining a very small ownership sliver of an asset should not put it on your balance sheet.
FYI - SIVs are not directly related to CDS - so you will not see 550 quadrillion on anyone's balance sheet.....I love these big numbers.
No one can borrow their way to prosperity. With all states being flat broke, and then some, how is it that banks have any money at all? Frontrunning and HFT can not account for all the money the banks have earned. If I had to guess, I would say it came from more accounting tricks.
Eventually the states are going to have to let a lot of their employees (including teachers) go. These people will eat through their savings, IRAs, 401Ks, and lose their homes and cars. There are a lot of shoes to still fall.
"No one can borrow their way to prosperity."
Obviously not a supporter of the current administration. Hope you vote differently in November.
"I cannot believe after what we have been through since the lessons of Bear Stearns and Lehman that we are simply not fixing a not so complex matter."
Where have you been?
He's been dreaming the impossible dream.
From the President today in Boston, talking about Wall Street.
"Martha's opponent already is walking in lockstep with Washington Republicans," Obama said, criticizing Brown for opposing the president's proposed tax on banks that received federal bailout money. "She's got your back, her opponent's got Wall Street's back. Bankers don't need another vote in the United States Senate. They've got plenty. Where's yours?"
Ah, yes, frame the issue for the masses as one of Republicans versus Democrats, as opposed to the truth that Wall Street/Banking dominates and steers both parties.
I will say that President Obama is spot on truthful when he says: "Bankers don't need another vote in the United States Senate."
You absolutely, undoubtedly, and clearly are correct with this statement President Obama. Your team of Summers, Geithner, and your nominee as Fed Chair, Bernanke, ably abetted by Mary Schapiro of the SEC and a host of former Goldman Sachs employees now working (for) your team, do not need another vote in the US Senate because they have you.
And they really, really do have you Mr. Obama.
Well said.
BarriO, man of the people. LMAO!!!
Deadhead, thanks for your efforts, much appreciated. Keep'em coming please. Your a valuable asset to the ZH family.
DH, sigh, Amen!
I keep telling my teenagers, who are keen lovers of history, we might unfortunately be living in a period where you'll tell YOUR CHILDREN about YOUR experiences.
Great post DH. It's amazing how good the TPTB are at moving the discussion. Of course they own MSM so it's not that hard.
Warren Buffet = Gannett newspapers...oh and don't forget Comcast (anyone wondering why CNBS is being bought by them)..hehe..
Uncle Warren is the kindly uncle/molester no one wants to talk about.
BRK only owns 3.45MM shares of GCI. There are 236.24MM outstanding.
BRK owns 12MM CMCSA out of 2.85B.
I think your assertion, JohnKing, that those companies are influenced by Buffett is irrational.
A comment about GCI.
BRK ownership numbers as you have laid them out speak for themselves....i don't think that ~1.5% ownership is something to scoff at, particularly if it is Warren Buffett. Buffett's 1.5% share is leveraged due to the fact that he is Buffett and his words carry more weight than many other institutional investors in my view.
Interesting is the most dominant holder of GCI, the Ariel group (around 15%), which is Chicago big time and its CEO (among others) is tied in real tight with Obama. The CEO was a co chair of the Obama Inaugural and I can't be bothered to look it up, but I suspect one would find lots of Chicago fundraising activity had taken place prior to that Inauguration gig.
It's no surprise that Buffett is tied in pretty tight with the Obama administration and he has also become a full fledged squid to the tune of about 5 billion.
Just connecting a few more dots.
Most Excellent post DH---the bank regulators are on regulatory Fantasy Island waiting for "De Plane, Da Plane" full of $$$ to materialize out of thin air. Voila' everyone is solvent and the con job heads into double overtime. The best way to"create solvency" out of thin air is Phony Accounting. This scheme has now been elevated to an Art Form. The banksters are just well--pigs.
Kudos, DH. The number of FRNs from Goldman Sux directed at O pre-election spoke volumes then - I was frankly horrified, and dismayed when i first heard it, then he picked Timmah, Summers, etc. all horrendous decisions IMHO - and his lack of action now against the Wall Street corruption contagion is speaking volumes now. When I get solicitations from the O Man's voracious fundraisers these days, I simply reply "as soon as he fixes his Wall Street problem." But firing Timmah or Ben is not enough - it's who he replaces Timmah with and the policies he (or she, if Sheila or another) brings to the table. In the best of lights, O Man has unfortunately deferred to the "experts," but time to end that. Nuff said.
very cool chart from the Economist on global housing prices (interactive)
http://www.economist.com/media/houseprice2/Economist_HPI_July_09_Chart.swf
Where would all the 2010 and 2012 campaign contributions come from if they actually crammed down the bonus culture?
bring the trash back on balance sheets once we hit dow 2000
Bob Chapman basically said the same thing you have -- weeks ago. As I understand him, he said that the banksters have rigged the books for this year and thus have "earned" extraordinary profits. However, next year will be an entirely different matter.
this is all perfectly rational on the banks' part. wasn't this obvious when bondholders weren't required to take a hit and/or allow the banks to completely fail? The best thing to be is bigger than too big to fail and then do whatever you want.
I agree with this concept, but the author fails to provide the mechanism for the process. My guess is that it occured when the TARP legislation was contemplated. Of course since TARP was poorly conceived and drafted the opportunity for the government to limit the bonus process was lost. (By the way where was the brilliant and pontificating Barney Frank back then? Barney, with your incredible vision, vision reminecent of Al Gore years back, how come you didn't realize that TARP would generate huge revenues for bankers which would lead to these bonuses?)
Those who live inside the Beltway focus their attention on creating federal debt financed through Treasury securities; and then sheepishly vote to raise the US debt limit. Capitalists in New York focus on corporate debt and equity. We have endured the credit crisis in corporate America. The next crisis will be in US Treasury debt as the beltway denizons believe the ability to issue Treasury securities, and US dollars, is limitless.
I agree with this concept, but the author fails to provide the mechanism for the process. My guess is that it occurred when TARP was contemplated. Of course since TARP was poorly conceived and drafted, the opportunity for the government to limit the bonus process was lost. (By the way where was the brilliant and pontificating Barney Frank back then? Barney, with your incredible vision, vision reminiscent of Al Gore years back, how come you didn't realize TARP would generate huge revenues for bankers which would lead to these bonuses?)
Those who live inside the Beltway focus their attention on creating federal debt financed through Treasury securities; and then sheepishly vote to raise the US debt limit. Capitalists in New York focus on corporate debt and equity. We have endured the credit crisis in corporate America. The next crisis will be in US Treasury debt as the beltway denizens still believe the ability to issue Treasury securities, and US dollars, is limitless.
Don’t assume anything of the sort. President Acorn and his merry band have other plans, and plenty of tricks up their sleeves…
http://www.americanthinker.com/2010/01/what_the_dems_know_universal_v.html
This, as well as amnesty for illegals (system redundancy), will create tens of millions of new loyal Democrat voters out of thin air.
Everything the current Democrat rulership is doing is designed to cement their power for decades to come. Between the stimulus and TARP funds under their control, and their "win by any means necessary" mentality, don't underestimate them.
Even odds that Obama is still sitting in the Oval Office on 1 February 2017 ...
howling mad and not even the full moon yet.
Hey, don't bogart that J, Loup.... AmericanThinker LOL!
DH - Fact remains that we are working on "fixing" the situation.... and cannot but help to take up the sport that out elected representatives and governing systems provide. The nature of this beast will require certain measures to bring it to heel and either these measures will be adopted or ruin will ensue since the very nature of this beast is self destructive. As long as folks are busy talking about TARP, TARP tax and making everything "even" the rest of the trillions fade from view. Good read.
That is why they are called the masters of the universe - because they seem to make all the true decisions no matter what the President and Congress say to the public....
nice post. I'm glad you focused on FASB 157 and what a huge life preserver that was for the banks.
can't find my Timmy vid mash-up on YouTube (DukeofConDao channel) so here's something equally as entertaining...
http://www.youtube.com/watch?v=fvxOjCgOUlY
it's the clip from The International where Clive Owen is shooting up the Guggenheim. it's apropos because as the movie points out TBTF banks "makes us all slaves to debt"
The power still rests with mainstream media.
Until such times as they choose to change sides, none of this anger and thirst for reform exists.
Until they expose the greed right into your front room, every hour on the hour, all this remains merely foreplay.
Your congressman and senator will wait in the wings to see which way the wind blows, they are not agents for change.
The editorial committees on the major network news are the people to work on.
bought and paid for (with tax dollars)
FASB 157 achieves the ultimate objective: it allows both the small banks and the big banks to continue the illusion of solvency for a time.
However, while the small banks will ultimately fail (because accounting balance sheet strength can't hide deficient cashflow forever - hence why the numbers look so bad when FDIC has to take them over), the BIG banks have direct access to Fed and Treasury cash. So they can use FASB to hide and pretend until they're broke in cashflow terms...then get access to unlimited facilities via the government. So, they can get away with posting worthless crap at 100%, because they never have to suffer the cashflow consequences - the government (and thereby We, The Taxpayers) pick up the pieces and pay out the record bonuses.
Sweet deal, eh?
I agree with you about the bankers. HOWEVER, what about the collective greed of US the American people. How many millions took out mortgages they copuld not afford? How many hundreds of thousands LIED on the application? How many of us live on credit we can never repay? Stop the scapegoating. The real problem is US - all of US. If anyone deserves a penalty then everyone deserves one. And we have to keep our focus on the real evil - The Fed. Without their low rates none of this could have happened (regardlkess of what Bernanke says). Greenspan, Bernanke, Fran Dodd. Those are the responsioble parties. The Bankers and the American people then took advantage of their foolishness to go on a greed binge. Stop throwing stones...
There seems to be three types of people who post here.
The first group used to be big players on Wall Street, but are not anymore for reasons I'm sure are way over my head. This group is very, very bitter about how they were screwed. Maybe some have even left the US??
The second group are the ones who want to blame the Obama administration for this recession that has been in the making for many, many years. And for a site that is just loaded with intelligent people, they seem to miss this part of the narrative time and time again.
The third type is hard to put your finger on. One minute they hate the banksters on Wall Street with their fast computers having a half second trading edge on them. Then as soon as these very same complainers hear the government wants to reign in bonuses, or impose stricter regulations or tax their earnings made on taxpayers' dollars, they have a hissy fit about that too! Now government is interfering in their playpen too much.
I salute you all in your greed and negativity, but just remember you are all part of the problem in spite of how smart you all claim to be.
Also, being a Massachusetts voter I wouldn't get too excited about the Republican upset in the making because it's not happening. It's just your Main Stream Media lying to you again. Trust me, I know from where I speak :)
That must be some fine weed you're smoking Dude. Don't bogart that joint my friend. Pass it over to me.
http://www.youtube.com/watch?v=IeHeTm_Rv7Q
LMAO. This anonymous has a great sense of "Sherlock".
The second group are the ones who want to blame the Obama administration for this recession that has been in the making for many, many years. And for a site that is just loaded with intelligent people, they seem to miss this part of the narrative time and time again.
This statement of yours is simply incorrect.
Very, very few, if any, ZH community members are part of your group two. The vast majority at ZH recognize that it is not a dem vs repub issue and certainly anyone with even several brain cells recognizes that Barack Obama had nothing to do with the onsetting causes of the mess we are in: a couple of years ago he was a state senator in Illinois for pete's sake and you are correct that the mess has been in the making for many, many years.
Actually, Obama had a LOT to do with the mess we're in. He wasn't directly responsible but provided a tremendous amount of support via ACORN of the corrupt RE lending policies that have bankrupted this nation.
read and become enlightened: http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html
+1000! Amen, Anon#197074-
What we are witnessing is the global failure of a 40 year experiment with fiat currency along with no standard (ex. gold) and no limits on the ratio of lending (creating more debt) to holdings.
Nice work DH!
It is however, too bad that there is even a discussion of "whether or not" the bonuses are OK.
In my opinion, the big blackhole banks should have been blessed with congressional approval to nationalize temporarily--and all who want to work there get civil servant pay--then the Glass Act should have been reinstated urgently. And, instead of the lies we were fed about the need to avoid "nationalizing the banks" we might have been told the truth and that is that with all the fraud that ran rampant, the cheapest and most righteous way of trying to right this scenario is to temporarily nationalize the banks that "needed" to be saved.
We would have seen that it was GS, MS, MER, and C--i doubt that BAC would have been in the mix because they were just a big sacrificial lamb for the salvation of MER.
We definitely live in a banana republic and it is just sickening, but who knows what we can do about it--it is like being stuck with no boat in an ocean of lies and deceit( our government that is captured by the privately held federal reserve and their massive cartel.)
I have missed your voice agrotera. As far as what we can do please just keep on being yourself.
Thank you MK! I always take comfort in your words and always so glad to hear you too!
They are putting it in their pockets because they know this is likely the last payday. The mainstream backlash on Wall Street and their paid minions in Congress is going to make any future bailout much more problematic to pull off. In other words nobody is going to buy another Bernanke/Paulson money grab.
It is really funny .... The society as a whole has profited enormously from the developments in capital markets and I am sure that, if America had lived with a very timid , controlled and limited financial market, the country as a whole would be much smaller , much less important and income per capita would be at most half of what it is now ... Lots of inventions and patents would not had happen and thousands of brilliant brains would not be working in this country .. The main culprits behind this fallout are the politicians, who by the way are elected by the American people ....3/4 years ago they were turning a blind eye to the scams that were happening because it was politically interesting to “surf the wave” of home ownership .... How many times we saw politicians praising the high level of ownership ??? And EVERYBODY knew that something really wrong was going on ( given that illegal immigrants that worked as maids were getting $ 1 mio mortgages without any effort ...) but EVERYBODY was happy and enjoying the ride .. People were buying leisure boats with second mortgages and using the balance to visit the Eiffel Tower in Vegas .... I am not saying that the banks are innocent .. They had a considerable role in the problem , especially the very top management ... Lehman Brothers did not go down because its traders were wrong or taking an enormous amount of wrong risk ( actually the traders were super bearish on real estate and the legacy positions made money afterwards ) ... Lehman went down because the top management was buying condos, malls and so on ... BUT DO NOT FORGET THAT THE POWERS TO BE IN DC WERE WHISPERING ON THEIR EARS TO CONTINUE BUYING THAT EVERYTHING WOULD BE FINE AT THE END instead of regulating and checking WTF was going on with those crappy mortgage generators in California ... So , as I said the Politicians , i.e The People, were the main culprits on this debacle ... In brief , the society as a whole is to blame for this crisis ( that is why the society as a whole had to pay for it, but I can reasonably guarantee that net-net , even after the cost of the crisis the society is much better off in the last 20/30 years and big part of the living standards improvement happened because we had a very agile and efficient financial system ) and now we have the politicians DEFLECTING all the blame to the bankers ( actually , blame deflecting and finger pointing is a field of expertise where politicians really perform well ) and the society begging to have a more SOCIALIST guidance ... Let me tell you something .. This country ONLY became what it is because everybody believe that meritocracy was reigning here ...In theory , ANYONE could move upwards on the social ladder on the basis of its own effort and work ...And actually that was true for the most part .. And now we are flirting with a very dangerous love affair with socialism .. And if we go that path, this country is toast .. And believe me , I come from a country that lived under a huge, socialist government for decades and the end result is a income per capita that is 20 times lower than the US and a humungous amount of corruption , almost a cleptocracy ... The US do not know what misery and poverty is and its people keep playing with fire ... My mother used to say that who plays with fire ends up burnt .... In a society some people will always make more money and get richer faster than others .. The difference is that in a free capitalist society anyone can get there ( and in reality , the average moves up in tandem with the rich ) in a socialist the few continues making a fortune but ANYONE else has the less remote possibility of joining them and keep going lower ... Think about that and please do not forget , BE CAREFUL WITH WHAT YOU WISH FOR ... Do not kill the engine that moved us forward ... Do not kill the idea of meritocracy ...Otherwise this country will move really fast towards mediocrity and you do not have an idea how the life we live now will be missed ...
"The society as a whole has profited enormously from the developments in capital markets"
if so please explain
1 in 8 on foodstamps
1 in 6 no health insurance
1 in 6 unemployed
family income down since the 1950's (2 incomes now versus 1 then)
crumbling infrastructure
etc etc....
wow, enormous gains all round.
I have been casting around for reasons as to why this pay abomination is being allowed in the face of massive outcry. The only logical answer (other than they are sociopaths) is that this is a way for some significant income to leak into the economy so that it provides tax base for some troubled states such as NY and also supports consumer spending. The reality is that income distribution has always been highly unfair but the supposedly superior performance of the TBTF banks last year provided cover to pay gouging by this anointed group. But, the general public thanks to thoughtful alternate news media such as ZH is now much more aware of the daylight robbery that is being perpetrated by the banksters that would have eluded J6P understanding in the past. So, the ongoing noise.
DH - Excellent, powerful work. Thank you.