"How Did You Not Notice 24-Year-Olds Were Being Paid $2 Million A Year Who Clearly Didn’t Know Anything?”

Tyler Durden's picture

Michael Lewis' scathing, aphoristic, uber-sarcastic style need no introduction. As such we will leave this brief clip from Slate, in which The Big Short author is asked how to avoid a new financial crisis, without much commentary (the answer is that under the current status quo system it is impossible to guarantee no more financial collapses, even if Glass-Steagall were to be unwound, but that is the topic for another story), suffice to point out the punchline: "future generations will wonder, “How did you not notice 24-year-olds were being paid $2 million a year who clearly didn’t know anything?” That pretty much sums it up right there.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Ahmeexnal's picture

Hope and Change!

MillionDollarBonus_'s picture

2 million dollars may be a lot of money to doomer day traders on zerohedge but trust me, to the pros it's nothing. Sales and flow traders at top tier investment banks laugh in the faces of nerdy ZH day traders. They are the smartest, savviest traders out there and they honestly don't care what you think, losers.

Q.E.easy's picture

Your slipping, this comment lacks all of what typically make your posts great to read.

Time for a new top tier troll, their half lives are getting shorter then CB interventions.

American34's picture

This country needs change. This country needs to be forced to change by those who honestly know how to run a country. This country needs those who know how to run a country to stand together, stand up and force the current government to change. Without those with people showing that they have a pair and taking some risks standing together NOTHING will change. No leadership required, just honest patriots working together to accomplish a single goal. No bickering around. One goal, singular in interest backed by the few million patriots left can be accomplished.

spiral_eyes's picture

I'm 24. I know nothing. Where's my $2 million a year?

walküre's picture

I'm 2x your age BUT I know a bit more (Dang!).

Does that mean I get $1 million or $4 million?

Screw the Arabs and their math. How does this new Zimbabwe math work again?

Thomas's picture

Trillions of dollars are at stake if they cleave the industry as Michael suggests. Odds don't seem good (until we have yet another Death by Bongo, and then we will do some serious rehab on the system.)

Stax Edwards's picture

I find myself in the same camp as ML.  I think to myself how ridiculous the "official" story of the financial collapse is.  We the people are supposed to believe that after hundreds if not thousands of years of banking history by which to go on, that all of the sudden some physicist (forget his name someone help me out here) came up with a formula by which prudent underwriting of loans was no longer needed.  And that we should abandon prudent underwriting now as it is no longer necessary.  Yeah right.  What a line of bull.  Now we can lend to people with no job and poor credit virtually any amount, because this phycisist came up with a new formula that can somehow distribute this risk.  It could not possibly be that since the big banks were using Other Peoples Money and therefore had no stake in the outcome that they really could care less as long as they got their fee out of the deal.  It is such a crock of shit. 

The moral hazard here is .gov is afraid to come out and say our biggest financial institutions are run by crooks.  Furthermore, these crooks own the FED, so we are apparantly SOL.   Unfortunately for the citizens who suffer we now condone fraud to benefit these bankers because they just cannot secure sufficient wealth for themselves by running legitimate banking operations.  No, as is typical of our gubbermint they would rather lie, obfuscate, deny, and generally cover up the banks wrong doing. Oh, and give em a few hundred billion for their hard work, of taxpayer money no less.  What a sad state of affairs.  Or throw some fines on them and also provide taxpayer money to pay said fines.  Move money from the left pocket to the right pocket in a show of solidarity with the citizens.

BTW, I don't think the deadbeats were the victims here.  No they got the couple year free ride they are used to getting.  The victims IMO were the prudent that put big down payments and now find themselves not only without equity but deep underwater.  They find that not only that, Bernanke has decided to further financially repress said people by not allowing them to earn any interest on their savings.  They find that they have lost their jobs and must spend their retirement money to get by.  Thomas Jefferson called it when he said first by inflation then by deflation....The banks will inherit the earth.  For the deadbeats, we have .gov programs to relieve them of responsibility.  For the prudent, the banks have their assets to attack if they walk. 

I only wish Fisher were serious when he said he supports breaking up TBTF's.  I fear this was lip service since they are the shareholders he reports to.  Gotta go vomit now, I am getting physically ill.

Seer's picture

Got bad news for you, it's MUCH more systemic than your comments would suggest.

The ENTIRE system, sans all this BS even, is patently flawed.  It is based on perpetual growth on a finite planet.  No fiddling or other "massive overhaul" is going to correct a damn thing.

fnord88's picture

Exactly. Capitalism based around constant inflation is the biggest fucking scam in the history of the world. It forces everyone to become speculators. And the more i read and think, the more i become convicned that specualtion is the root of many of our problems. Not just because it forces people to gamble with money they should be able to save, but because speculation is based around two competing emotions: fear and greed. Spend long enough with those two emotions dominating your personality; you turn into a psychopath. Seriously. 

Cathartes Aura's picture

yours is an excellent post fnord88 - encapsulates a mindset that destroys with no regrets, only needs the feed of endorphins (gambling, etc.) to maintain existence.

that people are being shaped in this mold (financial reward for behaviours)is what needs to be acknowledged, before any changes can begin.

trav7777's picture

what 24 year olds were really getting $2M a year?

Mr Lennon Hendrix's picture

Exactly. 

This is a stupid interview.  The average age in the industry is 60.  So there were a few geeks straight out of college that wrote some algos; who hired them?  WHose idea was it to implement the algo devices?  Old dudes that spend half their week on the golf course smoking cigars like they have their whole lives.

So a few kids made a few million.  That is nothing compared to the take home of the VPs and Partners.  We will look back on history and wonder how for the last 40 years the economy was destroyed by the Greatest Generation and their kids, and at the end, the Emporer asked Vader to join the Dark Side and he said yes.

GoinFawr's picture

"Kiss ass while you bitch so you can get rich, but the boss gets richer off you."

Seriously though, I could do with a holiday in beautiful Cambodia right about now.

disabledvet's picture

I've been to Kampuchea. And guess what? NOW I'M LIVING IN IT!

economics1996's picture

Capitalism works great.  Crony capitalism sucks.

ChrisFromMorningside's picture

There were 24 year olds making high six figures though. And there were definitely people in their 30s making $2m.

The Alarmist's picture

Very few, but there were some 27 year-olds getting two million.  I once had an HR person say to me, "If I hear one more associate [that would be someone circa 24] tell me why they should be getting $200k I'm going to jump out that window."  Of course that was 1999 before the dot-com boom and the so-called "war for talent" which for some strange reason had I-Banks kissing the asses of un-proven analysts and associates for fear that all the talent would go there. This no doubt adjusted the analyst & associate pay levels up a bit, but I doubt the pay scale had jumped to $2m, and the current decline is merely a reversion to trend.

disabledvet's picture

all the girls have told me to ask you "who are these guys?" they want names...you know..."for the file"...

JPM Hater001's picture

"Sources close to the situation named the suspect as 31-year-old Kweku Adoboli , who was working as UBS director of exchange traded funds and so-called Delta 1 trading, according to his profile on LinkedIn ."

Ok, how about 31.  Make you feel any better?

He lost $2 Billion.

swissbene's picture

"""

Capitalism based around constant inflation is the biggest fucking scam in the history of the world. It forces everyone to become speculators. And the more i read and think, the more i become convicned that specualtion is the root of many of our problems.

"""

 

i disagree with this logic.  the problem as you state is not speculation, but rather the problem is that everyone is 'forced' to speculate.

this is an important distinction b/c the respective solutions are quite different.

fnord88's picture

agree 100%, i should have been more clear. For those of us the enjoy risk, speculation is fine, its a way of getting ahead using brain power rather enslaving oneself to some company that does not give a shit about you.

 

For people like my mum though, who just retired after 45 years teaching disabled kids, who have only self funded superannuation, it's fucking evil. Government in australia forces you to put money into super, which is then ripped of by money managers with ridiculous fees, and then invested in the stock market only to lose most of it. Instead of being able to retire and live comfortably after a life of putting others first, now she, and her family, have to stress and worry about money probably until the day she dies. Makes me want to shoot somebody in the fucking head. 

swissbene's picture

absolutely infuriating.  i see this current post at zh:

http://www.zerohedge.com/news/central-banks-assault-savers

 

aim carefully and godspeed.

economics1996's picture

In the past before central banks and governments ripped off the people silver and gold protected peoples savings.

mushi's picture

"Spend long enough with those two emotions dominating your personality; you turn into a psychopath. Seriously. "

 

I seriously love you

economics1996's picture

fnord88 Great observation.

Marla And Me's picture

Alright, this is when I miss the old timers around here.  You are missing the final and crucial step in your analysis fnord88.  You talk about "constant inflation" like it is a given.  Why is there inflation in the first place?  Interest.  There is a very specific reason every single monotheistic religion rails against interest; the reality that is the exponential function in a finite universe.  Once you understand that, everything else becomes crystal clear, including the fact that complaining about it is completely useless.  What do you think is going to happen when the CBs destroy the sovereigns by offloading their liabilities onto them?  Where are Mako and B9K9 when you need them...

Xkwisetly Paneful's picture

Even worse news the sun is obviously immature and well the rest is obvious.

Nothing new or novel but don't let that get in the way.

Problem Is's picture

That physicist wrote a mathematical model based on the theories an economist or financial "expert" told him...

ChrisFromMorningside's picture

Don't "break up" the TBTFs. That is far too conciliatory and would prolong the time that Americans spend throwing their money into a financial black hole by keeping zombie banks on life support. Just let the TBTFs collapse entirely as should have been done on Day 1 and as will inevitably happen again without government intervention. Let that whole monstrous debt structure liquidate itself entirely.

The faster this is allowed to happen the more of America's "Main Street" (what is left of productive, non-subsidized, non-FIRE, industry) we save. America's "Main Street" is currently being asset-stripped by vulture financiers on a daily basis.

Don't worry about our foreign creditors. Most of them will find it hard to service their debt at one point or another too, as this whole fiat bubble deflates. The U.S. economy is currently a net destroyer of wealth. The enormous task that lies before us is to transform it into a net producer of wealth (once again). Once we solve that, most of the other problems we face (economic AND political) will seem relatively minor.

economics1996's picture

Stax can I use this for a blog?

economics1996's picture

There is a shit load of talent on the ZH board.

Xkwisetly Paneful's picture

No doubt just ask around. Can hit the search engines better than any other place in the history of mankind, cannot discern fact from fiction if given the f,c & t but that is immaterial.

GMAFBA never seen a place in real or cyber life with so many insecure know nothings who feel it necessary to cyber blow each other on a regular basis.

Think for yourself's picture

"GMAFBA never seen a place in real or cyber life with so many insecure know nothings who feel it necessary to cyber blow each other on a regular basis."

Yep, you being a prime example of this. Hell, Trav, Hamy and AnAnon are more consistently useful, rhetorically sound and less noxious than your posts. I don't think I ever saw one of your "contributions", if we could call them that, bring anything to the table.

I have one tool that will be vital to your training, young Padawan. It's called a mirror. Come back once you've mastered its use, or don't come back at all - nobody could care less. 

Stax Edwards's picture

Absolutely, glad you liked my comment. 

I am debating about writing a white paper entitled "How to utilize the finance industry to rid a country of its middle class".  You know I just cannot think of a better way to do it than they did.  If that was the end goal, they are damn good at their jobs.  It has proved devastatingly effective.

 

Xkwisetly Paneful's picture

I find myself asking why people who bought the worthless paper yielding points higher than treasury paper yet somehow and mysteriously containing the same government guarantee were refunded losses after the fact.

I wonder at what point will the grown consenting adult aged supposed professional money manager responsible for chasing the extra return investing in crap he didn't undertsand also known as the buyer of the debt and therefore the creator of the market will be held responsible and not be considered a victim.

Not only could have Glass Seagull been in place flying over the banks and not have mattered-think it would have curtailed the activities of 2-3 banks at most- but the bankers could have worked for free and as long as they had dupes to offload the paper to it would not have mattered either.

But I get it, those damn evil banksters!

WhatCouldGoWrong's picture

Stax--- the name you're looking for is David Li. A Chinese national now back in China and "not available" for comment about his "Gaussian Copula Function". The formula had the effect of eliminating prudent underwriting by providing a formula that "proved" all risk was equally correlated. Here's a good article about it...

 

http://www.wired.com/techbiz/it/magazine/17-03/wp_quant?currentPage=all

Stax Edwards's picture

Yes, that was the guy I was thinking of.

BTW, I don't blame him for the mess, he created the formula they paid him to create. 

I have to think from the banks perspective it was more like "Hmmmm.  There is a pile of money available out there for home loans.  Unfortunately there are not enough credit worthy borrowers, so we need a way on paper to show that giving these loans to deadbeats is a good idea.  Can we bring in someone from outside of the finance industry, because finance people know giving money to deadbeats is a losing proposition for someone, they might not go for it.  Lets find someone with a more abstract math background, physics maybe.  No one will ever understand the formula and we can just pay the ratings agencies whatever they need to rate the stuff AAA.  And IBGYBG (I'll be gone, you'll be gone) became the new IB mantra.  Loot as much as possible as fast as possible because this bitch is gonna blow sky high."

WhatCouldGoWrong's picture

Stax... if one is of a conspiritorial mind, it may seem odd that a Chinese national comes into the NY hive of finance and presents this wonderfully hard to resist and permissive risk package. Its the bomb that will go off if touched.... The package is irresistable for touching, holding, and stroking. It's perhaps better than Stuxnet. Now, the presenter of the gift is back in the forbidden city and cannot be asked about his gift and its frightening and realized results. While we in the West think in terms of quarterly profits, China thinks in terms of decades and centuries. I fear we are playing checkers while they are playing chess.

Matt's picture

The good news is you have $100 Trillion. The bad news is that a loaf of bread is now $200 Trillion, a Big Mac is $500 Trillion, and a 40 pound bag of rice is $2 Quadrillion.

Jorgen's picture

This is a photo of a sign at a supermarket checkout in post-Apartheid South Africa: http://goo.gl/eLrao

Now, try to fit 20 trillion palm ideograms on the $100 trillion banknote...

spiral_eyes's picture

But I don't have 3 hands...

Dr. Acula's picture

From http://www.chaosmatrix.org/library/humor/equation.html,

"Knowledge is Power
Time is Money
and as every engineer knows, Power is Work over Time.

So, substituting algebraic equations for these time worn bits of wisdom, we get:

  • K = P
  • T = M
  • P = W/T

... Solving for Money, we get:

 

  • M = W/K

Money equals Work Over Knowledge... we see that Money approaches infinity as Knowledge approaches 0, regardless of the Work done."

Problem Is's picture

Nice...

Stupidity would be indeterminate then... 0/0...

SoCalBusted's picture

Everything counts in large amounts

Chuck Walla's picture

I'll do it for half and if you press me, a 1/4.