Needful Things
Even after the intense focus on Wall Street recently, I think the public still has very little idea of the people behind names like Goldman Sachs, Merrill Lynch, etc. Wall Street likes it that way. There are strict rules at most firms about employees speaking to the press. This helps cultivate the public perception that, instead of places where well-paid individuals work, these firms are august, bedrock institutions important to the community and the country. Almost like they make things, or educate your children, or do housecalls in blizzards when you've got a temperature.
But Wall Street is the ultimate example of a business that goes up and down in the elevator every day. The taxpayer money that's now sustaining it, of course, also sustains the lifestyles of those who work there. So it's more important than ever to limit the public's opportunities to look behind the curtain. Sometimes, though, it's unavoidable.
But Wall Street is the ultimate example of a business that goes up and down in the elevator every day. The taxpayer money that's now sustaining it, of course, also sustains the lifestyles of those who work there. So it's more important than ever to limit the public's opportunities to look behind the curtain. Sometimes, though, it's unavoidable.
posted by The Cunning Realist at Sunday, October 12, 2008
16 Comments:
I'm a Canadian working in the investment and insurance industry who has followed your blog since the first one about Social Security reform. For some time I have been aware from the periphery, of the excesses in parts of the investment businsess particularly where there was no real "skin" involved. The classic use of "OPM" Other People's Money to enrich the few. The news of what was likely a sales conference from a division of AIG that was probably properly capitalized made front pages everywhere this week. In my opinion the real front page news should be the huge salaries and bonuses paid to excecutives based on paper profits from the alphabet soup products their firms sold. Entrepreneurial risk is entitled to reward. "Gaming" the system is not, and I hope that more stories like this will make the news.
Guys like me in the trenches work hard to try and do the right balance of things for our clients, and our careers and integrity are jeopardized by what many of us believe were close to criminal actions by many of the players in the investment system, particularly when it came to products based on mortgage finance.
A few weeks ago you said that you might start to reveal more of what you have witnessed. I, for one, would be happy to see that kind of information out in the open.
The rhetoric in the election blaming the working poor for overextending themselves and causing this crisis is so far off base that it is hard to believe that anyone with half a brain would fall for it.
I've always been suspicious of Goldman's reputation as the undeniable pinnacle of wisdom, competence and success. (See the collected articles in the NYT.) The only person I know personally who worked there engaged in petty thievery with his wife. I assume these guys are the standard Ivy League overachievers I went to school with. They're smarter than most, but the success also comes from the willingness--and sometimes the compulsion--to do things moral people just won't do. And Paulson's performance leading up to and during the current financial crisis hasn't changed my opinion. As reported in Forbes (9/23/08), the bailout figure was initially set at $700 billion because, a Treasure spokeswoman told Forbes, "We just wanted to choose a really large number"? The outrageous, clumsy requirement that there be no oversight or review? The ham-handed way he tried to rush the measure to a vote in 3 days? The pleading to Pelosi on bended-knee? Heckuva job, Paulson. Who is this clown?
Not sure what's crazier to me (or further out from my solar system of experience), $55 million for property, or reading that amount more or less matched his 2006 compensation.
ALOHA !!
My first question is why is he selling now in such a crappy market? Is he moving to a non-extraditing country like Paraguay?
After reading about what happened to Dick Faud, being beat up at a gym, I would bet these Wall Street tycoons are extra careful about walking through an airport or a mall or getting on a crowded elevator!
ALL YOUR BEST THINKING GOT YOU HERE!!
Sounds similar: "CNBC was on another television set, where the hosts were complaining that too few chief executives were willing to come on their channel these days.", Floyd Norris, "Don't Open the Envelope".
Have you read George Soros's book, he New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. I just picked it up at the library.
Why do we need a Wall Street today anyway? Can't they be replaced with technology? Or, why do they have to be all centered in the NE. Again, with technology there is no reason they can't be located anywhere?
Remember that movie, "The Pursuit of Happyness", with Will Smith. I couldn't get excited about the movie, because the profession that made him "rich". All I could imagine was him cold calling people and aggressively selling the Dean Witter's financial products with high fees that they didn't need. And I was disappointed that he couldn't "make it" in any other profession (i.e., school teacher, nurse, doctor, etc). He got ahead, that's a good thing, but did his "financial" cold calls put someone else in the poor house or make them less rich.
When the economic is unstable, our life is also changes.
Where's Robin Leach when you need him?
"Where's Robin Leach when you need him?"
Or Hunter S. Thompson? One imagines Fear and Loathing on Nantucket to be a compelling read.
Good news :-(
"Military Recruiters Benefit from Economic Crisis"
With this arrogance of Wall Street as a factor to the world financial crisis, it seems people around the world could be in a similar situation ...but worse. So did WS just do some recruiting for the other side, in the war on terror.
From the linked article:
"Winkelried, Goldman Sachs’ COO and co-president since 2006, earned $53.1 million in 2006 and is listed eighth out of the 25 highest paid men in the country by Fortune Magazine in its 2007 25 Highest Paid Men listing."
Well, he was paid $53.1 million, but I'm not sure he earned it. I'm sorry, but I don't think anyone deserves that much money in one year. How can he possibly justify that?
I think that the wealth disparity we have in our society is corrosive. It engenders resentment and envy in the lower and middle classes and greed and entitlement in the upper and over classes. I have known and worked with some very rich people. While some of them retained their perspective, most completely lost it. They had little appreciation for how privileged they were and were indifferent to the plight of those less fortunate. It is those attitudes that have brought us to where we are.
It makes me sick to hear about layoffs at large companies. It is unconscionable to lay people off when top managers retain their inflated salaries. They say they have to do it to cut costs. But they don't have to do it, the choose to do it.
At base, I don't have a problem with some people making more than others. Intelligent risk taking should be rewarded, and there should be a premium put on highly skilled or talented labor. But there comes a point where paying one person more means paying someone else less. We are way past that point now, and something's go to give.
This is completely off topic, but who here ever thought that Joe Biden would be the least controversial part of a Presidential election he was part of?
You have to wonder why Goldman Sachs needed Warren Buffet's $5 billion investment to prop up the value of the GS stock. I also wonder why the top GS execs had to sign an agreement to hold on to their GS stock for ten years.
Didn't Paulson have to sell his stock to take the Bush appointement? Wasn't it tax free since he was forced to sell? Didn't he get out at a great time(stock price near an all time high)? Wasn't he a part of the problem with all these packaged securities that wound up being worthless? Didn't this man just make several hundred million dollars selling this garbage...and just happened to get out at the peak...tax free? Now he is bailing out the mess he helped create and has the entire country counting on him for the solution to the crisis? WOW! It is all a bit too much to take in. I have to stand back in a bit of awe that someone could so easily get away with this...nobody even questions it. He is the most skilled thief of all time. He is the messiah of thieves. I am in awe.
Imagine...getting out of GS stock and putting them into government securities...just before the crash. WOW. This man is clearly an evil genius. Everybody was saying how great it was for Paulson to take a pay cut to come work for the government...little did we know the fast one he was pulling over on us...he got out of GS at the peak and sold his stock tax free!!!!
http://www.forbes.com/2006/06/01/paulson-tax-loophole-cx_jh_0602paultax.html
By accepting the Treasury post, Paulson is poised to take advantage of a tax loophole that allows government officials to defer capital gains taxes on assets they have to sell to avoid a conflict of interest, as long as the proceeds are reinvested in government securities or a broad array of mutual funds approved by the government within 60 days.
On Nightline, Exclusive: WaMu Insiders Claim Execs Ignored Warnings, Encouraged Reckless Lending
How'd that "ignore the man behind the curtain" thing work out for the Wizard of Oz? Of course now that the market was up over 900 points yesterday and looks to have another good day, a lot of people are going to develop temporary amnesia and forget about what and who got us into this mess. Maybe I'm wrong, but I don't think so. Will be interesting (or not) to hear what McCain and Obama have to say about the economy tomorrow night.
employees from there are not recieiving what they really deserve. I have heard worker's rights don't exist in Wall Street, or maybe they do, but nobody does any to valid them.
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