Bailing out the people who don't need it?

[general_kill]

Cry me a river. I lived in Manhattan with 2 kids and 2 workers making less than 100K total for a bit. Not great but there is a whole lot of people doing it. You know I work really hard. I have a PhD with a long apprenticeship to make now just a little over 100K and have a lot of stress. ie if I don;t get my grants renewed I don;t get paid, sort of. I live in an expensive part of the country and my kids tell me our house is the worst and everyone else has this and that. You know what I tell them. Let's go to Tijuana and see what a bad house is. Man, have some perspective. I am one of the luckiest people on this planet and so is the struggling 400K only executive.

He is very thankful for his position. And just like you, being privileged doesn't mean it's a stress free life. I don't know why you are telling him to cry a river when both of you are going through essentially the same thing.

My post was in response to an individual implying that people in his position are partying it up while the rest of us suffer.

 

[Gary Childress]

We are being bailed out. It's called the stimulus package.

Yeah. And I'm eagerly waiting to see how much of it really goes into perks for the already rich.

 

[Mark1031]

We should have a convention in Vegas, cause I'd love to shoot the . .. .. .. . and shoot some craps with ya.

Sounds like fun. Craps and "investing", very similar except the banks/brokers are the house.

 

[Gary Childress]

My post was in response to an individual implying that people in his position are partying it up while the rest of us suffer.

Where may I donate on behalf of this poor fellow? Only $400,000 eh? And I hear the price of caviar is going up too!

 

[Mark1031]

He is very thankful for his position. And just like you, being privileged doesn't mean it's a stress free life. I don't know why you are telling him to cry a river when both of you are going through essentially the same thing.

My post was in response to an individual implying that people in his position are partying it up while the rest of us suffer.

Look nothing against him personally. I'm sure he's a nice guy esp if he reads math books in his spare time. Seriously though one needs some perspective. That kind of income gives one lots more options than most people in this country where the average salary is 50K. I seriously do not see what the average guy with this kind of job does to deserve that income other than just being in a field where massive streams of money move through so it is much easier to justifying a small skim that is in fact a massive amount.

 

[mrt144]

Sounds like fun. Craps and "investing", very similar except the banks/brokers are the house.

The trick is to become the house without the degrees, certs and annoying people.

 

[general_kill]

Where may I donate on behalf of this poor fellow? Only $400,000 eh? And I hear the price of caviar is going up too!

Oh stop all the hating already it's getting old. Look, he worked his way up there and SO CAN YOU. Why aren't YOU an executive at some major corporation? If you think it's so easy being them, WHY DON'T YOU become one of them? In fact, why doesn't everyone become an executive?

You wanna know why they get paid so much? It's supply and demand. They have talents that you and I don't. Or they are willing to commit to a job that you and I won't. No one is stopping you from become an executive. So go be one.

The guy I'm talking about personally worked his way up the ladder. He started with very little. He went to very good schools because he spent a lot of time studying and he got to where he is because he is an excellent and dependable employee. You know what he didn't do when he was young? He didn't spend his time going to internet forums complaining about rich people. He saw people who are rich and he emulated their paths. And now, he's pretty well off.

(And yes, they did have internet forums 30 years ago.)

 

[Formaldehyde]

10% of Goldmann Sachs didn't make "nearly all their revenue" unless you discount the 90% of the rest who work for the organization.

You don't know a much about brokerage firms and what they do for a living, do you?

In most of them 90% are retail brokers and clerks. The retail brokers don't generate all that much revenue so they don't get paid all that well. The clerks make even less because just about anybody with a high school education can do their jobs.

The traders and the decision makers are the people who really make the profits. Most of the time they all work in one floor of one building in Wall Street so they can easily communicate with each other.

In the case of Goldmann Sachs, it's even more lopsided because they have a very small retail brokerage arm catering mostly to the super rich.

 

[Gary Childress]

Oh stop all the hating already it's getting old. Look, he worked his way up there and SO CAN YOU. Why aren't YOU an executive at some major corporation? If you think it's so easy being them, WHY DON'T YOU become one of them? In fact, why doesn't everyone become an executive?

Why doesn't everyone become a janitor or garbage collector if they are such easy jobs? Why don't executives who are stressed out about their jobs simply take up garbage collecting? I'm sure their applications would be considered fairly. They may not have much experience but everyone needs to start somewhere to break into an industry. I don't understand what the appeal is then for being an executive? Why do people go through years of school just to avoid menial careers? Don't they realize what a paradise working fast food is?

 

[Whomp]

Yeah. I'm sure they'll pull a John Gault and just refuse to work rather than for the benefit of the rest of us poor saps, spend the rest of their lives in poverty. So the economy is going down the tubes and the answer is to shower the rich with money.

Their incomes will come down if risk continues to be shunned and the economy gets worse.

How do we know they are the best? For example, after fees and compensation for an investment fund does anyone consistently beat the S&P. I have heard not but maybe I'm wrong. I have no problem with people getting rich off of some new idea or real skill. I do have a problem whth people in a very needed industry moving around trillions of $$ and just deciding well ther is so much money in this field I guess I can skim 1% for my trouble and get rich. If that 10% left and you moved up the 10% below them would you see a substantive difference?

You're confusing money management with what banks and investment banks do. Asset management is just one piece of that equation.

If you're talking about asset management those that get paid a fee can be hired or fired. Performance is actually secondary to service for high net worth people. Firms like Goldman Sachs don't work with anyone unless they begin at $10 million. Serving the masses is not their intent. Though they are now a bank they have no interest in retail banking but instead on wholesale banking.

I want to call this bluff. Lets see what happens. AFAIK the ransom has been paid time and again.

Time will tell. My guess is more of these investment banks will consider a private solution going forward anyhow. Just look at how many investment banks have been acquired through the years by commercial banks and the outcome. The conservative nature of commercial banks does not mesh very well with the high risk taking investment banks.

In 1997, bought Montgomery Securities for $1.2bn. They cashed Montgomery’s partners out, including its leader Tom Weisel. He promptly used the money to start a competing firm.

When NationsBank merged with BofA in 1998, the latter had just bought Montgomery rival Robertson, Stephens - which it sold for $800m to Bank of Boston. That bank, which Lewis later bought, eventually liquidated the firm.

Hambrecht & Quist took Apple and Amazon public, sold out to Chase Manhattan Bank for $1.4bn. Bill Hambrecht later went on to open his own boutique co-managed Google’s public offering.

Alex Brown, sold out to Bankers Trust - which promptly sold itself to Deutsche Bank. The German bank handed a $100m severance check to Bankers Trust’s chief Frank Newman just three weeks after the deal closed.

In 2000, Wasserstein sold Wasserstein, Perella to Germany’s Dresdner Bank, which had earlier acquired the UK merchant bank Kleinwort Benson. A year after paying $1.4bn for the firm and sprinkling its staff with $190m of retention bonuses, Wasserstein left to run Lazard. Today Dresdner is nowhere to be seen in New York.

Perhaps the mother of all bad Wall Street takeovers was the purchase of Donaldson Lufkin & Jenrette by Credit Suisse. In addition to paying $11.5bn to buy the firm, Credit Suisse forked over another $2bn for stock options and $1.2bn in retention bonuses. In no time flat, the top business-getters at DLJ left – one to run Credit Suisse arch rival UBS in the US.

http://www.telegraph.co.uk/finance/...ve-a-way-of-snookering-commercial-rivals.html

Does this kind of reverence for the Masters of the Universe exist in any other industry? These people, through decisions they made, ran their firms into the ground while collecting obscene bonuses. Now the government is handing them taxpayer money to keep their firms running, and not only do we get to pay them to keep the jobs at which they failed utterly, but we're supposed to feel sorry for them because they can't make more than a half-million dollars per year?

Listen, I'm a good liberal -- I think they should all have a nice safety net with healthcare and unemployment benefits until they can get back on their feet, just like the people who carry the garbage from their offices. But handing them billions of taxpayer dollars because it's hard to live in Manhattan on $400k/year? (With all due respect -- just stay on the subway for a few more stops. Now you're in an affordable neighborhood.) Now I'm beginning to understand when people get angry at children's sports leagues that give prizes to both the winning and losing teams. Maybe bankers are just little kids?

Cleo

Yep. Most any law firm I know.

 

[Formaldehyde]

Does this kind of reverence for the Masters of the Universe exist in any other industry? These people, through decisions they made, ran their firms into the ground while collecting obscene bonuses.

Um, once again, no they didn't. You are blaming everybody in the company for the mistakes of a few in a completely different business arm of the company.

But handing them billions of taxpayer dollars because it's hard to live in Manhattan on $400k/year?

Once again, nobody is paying their divisions one red cent of taxpayer money, so you have no right to complain about what they do or how they do it other than to try to claim that "capitalism is evil".

 

[I'm Cleo!]

I posted a thread a few days ago with a documentary and a rather lengthy discussion of what exactly caused the the financial problems today. It has more to do with globalization than corruption on Wall Street. The title of the thread was something along the lines of "Explanation for the current financial crisis".

Watch the documentary and read over some of the posts to get a broader perspective. The reason I posted the thread was precisely to prevent uninformed ranting and scapegoating like so many threads are doing these days. It's okay to be mad, but be mad for the right reason at the right cause.

I haven't watched the whole video, but I promise you I will. But from the thread, you seem to argue that the crisis was caused by the banks engaging in riskier and riskier maneuvers in order to keep the geniuses who were being lured away by hedge funds? So in order to keep those people, they leveraged tons and tons of crap built on a bubble?

I don't know. Even if it was that, aren't the people who made the decisions to leverage tons and tons of crap against a bubble still precisely the people we don't want running banks going forward?

Cleo

 

[general_kill]

Why doesn't everyone become a janitor or garbage collector if they are such easy jobs? Why don't executives who are stressed out about their jobs simply take up garbage collecting? I'm sure their applications would be considered fairly. They may not have much experience but everyone needs to start somewhere to break into an industry. I don't understand what the appeal is then for being an executive? Why do people go through years of school just to avoid menial careers? Don't they realize what a paradise working fast food is?

What a break down in logic. It is precisely because so many people qualify for low-skill level jobs that those jobs get paid less. And no one is claiming being a janitor is not demanding, but the position has relatively low requirements compared to those of high level executives.

The point here isn't who works harder or has the more stressful job. Most jobs are stressful and demanding. The point is that not many people have the skills, commitment, or interest required to be an executive. Again, if you think it's easy, feel free to become one. If you know any janitors who don't like their job, tell them to become a CEO or something.

 

[mrt144]

What a break down in logic. It is precisely because so many people qualify for low-skill level jobs that those jobs get paid less. And no one is claiming being a janitor is not demanding, but the position has relatively low requirements compared to those of high level executives.

The point here isn't who works harder or has the more stressful job. Most jobs are stressful and demanding. The point is that not many people have the skills, commitment, or interest required to be an executive. Again, if you think it's easy, feel free to become one. If you know any janitors who don't like their job, tell them to become a CEO or something.

This is what pisses people off the most; it is the idea that having unique and in demand skills pays more than something that is hard work. Because apparently people buy the line about working hard paying off.

 

[Gary Childress]

You don't know a much about brokerage firms and what they do for a living, do you?

In most of them 90% are retail brokers and clerks. The retail brokers don't generate all that much revenue so they don't get paid all that well. The clerks make even less because just about anybody with a high school education can do their jobs.

The traders and the decision makers are the people who really make the profits. Most of the time they all work in one floor of one building in Wall Street so they can easily communicate with each other.

In the case of Goldmann Sachs, it's even more lopsided because they have a very small retail brokerage arm catering mostly to the super rich.

Then why do they hire clerks? Surely they aren't needed since they contribute nothing to the company.

 

[general_kill]

I haven't watched the whole video, but I promise you I will. But from the thread, you seem to argue that the crisis was caused by the banks engaging in riskier and riskier maneuvers in order to keep the geniuses who were being lured away by hedge funds? So in order to keep those people, they leveraged tons and tons of crap built on a bubble?

I don't know. Even if it was that, aren't the people who made the decisions to leverage tons and tons of crap against a bubble still precisely the people we don't want running banks going forward?

Cleo

Well it's rather complex, you can trace the causes back for hundreds of years if you feel like it. I mean if no one discovered a use for oil, then Saudi Arabia wouldn't have so much cash to throw our way. And if imperialism never ended in China or if Nixon never opened our borders to China, then they wouldn't have the trade surplus they do today.

But here's the deal:
For whatever reason, certain countries saw tremendous trade surpluses and economic growth in this decade. Since they have so much money, they needed a place to hold it so they can earn interest and figure out how to spend it all. This led to the massive influx of capital in our investing and financing sectors.

Fast forward a few years, you have these super hedge funds making extraordinary profits during the bull market. The hedge fund managers made a killing off of commissions. When they expanded their portfolios, they needed more people to manage the fund so they started competing for the same people banks hire. Since banks want the best and brightest as much as the hedge funds do, they had to pay out comparable bonuses. However, since people do not save as much during bull markets, they had to find new ways of earning commission to pay those bonuses.

This is a brief overview of what happened, there's a lot more to it than that. But you get the gist of the story.

This is what pisses people off the most; it is the idea that having unique and in demand skills pays more than something that is hard work. Because apparently people buy the line about working hard paying off.

It's the nature of supply and demand unfortunately. It's like why do Lamborghinis cost so much more than water even though water is essential to living? It's all about supply and demand.

 

[mrt144]

Yeah, but most people don't want to admit that they probably earn what they deserve based on their skillset.

 

[Gary Childress]

The point here isn't who works harder or has the more stressful job. Most jobs are stressful and demanding. The point is that not many people have the skills, commitment, or interest required to be an executive. Again, if you think it's easy, feel free to become one. If you know any janitors who don't like their job, tell them to become a CEO or something.

Wait a minute. Now you're back tracking. You just talked about how stressful your friend's job is and now you're saying most jobs are stressful and demanding which was my point to begin with. So you are agreeing with the point I was making and now you're trying to play it off like it's your own point? You're right! Most jobs are stressfull. I was wrong to say that your friend's job is more stressful.

It's the nature of supply and demand unfortunately. It's like why do Lamborghinis cost so much more than water even though water is essential to living? It's all about supply and demand.

Yeah. Being bailed out by taxpayers is all about "supply and demand".

 

[Mark1031]

Um, once again, no they didn't. You are blaming everybody in the company for the mistakes of a few in a completely different business arm of the company.

kinda like blaming the union assembly line workers for the failure of the auto industry.

 

[amadeus]

Who needs a bailout? Nobody. There, problem solved.