The Brain Drain

[EagleKeeper]

The financial sector is made up of multiple sectors.

Think of it equivalent to the United States.
Because California is having problems with their budget; should Texas and Alaska have to cut their budgets (which are balanced) to support CA.

The bad boys are gone and the sector that they destroyed is also.

 

[Special K]

Originally posted by: ebaycj

Originally posted by: WhipperSnapper
Aren't some of these people the very same people who put the banks into the position they are in today?

NO. That's the whole fucking point of this thread.

I'm sure the ones who cooked up the financial products that led to our current mess were hailed as geniuses and top talent back during the housing boom. Who's to say that the current crop of top talent won't create products that will lead to yet another bust? I don't have much faith in regulators. I have a feeling the banks will always be one step ahead of any regulations that are put in place.

I think bonuses should be restructured to reward long-term progress rather than short-term risk taking that can threaten the entire economy when the bets go wrong.

Is it even possible for our economy to grow at a slow but steady pace, or are we doomed to move in huge boom/bust cycles? Is greed always going to result in huge amounts of capital being misallocated, which leads to painful corrections like the one we're in now?

I just have a feeling that in 10 or so years, we will be having this same discussion, only instead of housing the catalyst will be <insert next bubble here>.

 

[nullzero]

This has to be one of the dumbest LegendKiller rants I have heard in a long time. Truly epic fail post, from a guy who thinks he knows how the financial system works.


---------------------------
YHPM

Senior Anandtech Moderator
Common Courtesy

 

[seemingly random]

Originally posted by: Special K

Originally posted by: ebaycj

Originally posted by: WhipperSnapper
Aren't some of these people the very same people who put the banks into the position they are in today?

NO. That's the whole fucking point of this thread.

I'm sure the ones who cooked up the financial products that led to our current mess were hailed as geniuses and top talent back during the housing boom. Who's to say that the current crop of top talent won't create products that will lead to yet another bust? I don't have much faith in regulators. I have a feeling the banks will always be one step ahead of any regulations that are put in place.

I think bonuses should be restructured to reward long-term progress rather than short-term risk taking that can threaten the entire economy when the bets go wrong.

Is it even possible for our economy to grow at a slow but steady pace, or are we doomed to move in huge boom/bust cycles? Is greed always going to result in huge amounts of capital being misallocated, which leads to painful corrections like the one we're in now?

I just have a feeling that in 10 or so years, we will be having this same discussion, only instead of housing the catalyst will be insert next bubble here.

I agree.

Something smells when a person not involved in the industry can't get even a hint of the nature of a financial "product" from its name.

And, yes, a lot of people will be fucked yet again in 20 years by a new crop of squeezers in some sector. The debunkers will be out in full force attributing the rape to "normal" market swings. It'll be hard to debunk the debunkers since a small fraction of what they say will be true.

 

[ZeGermans]

if the investment industry is dismantled maybe trickle down economics will actually work


heh just kidding

 

[brandonbull]

The financial industry could use a good "dumbing down". It's one big Ponzy scheme and we all could benefit from a lower number of smart people trying to cheat the system.

 

[LegendKiller]

Originally posted by: nullzero
This has to be one of the dumbest LegendKiller rants I have heard in a long time. Truly epic fail post, from a guy who thinks he knows how the financial system works.

LOL, like you do know how it works?

Seriously, if you don't have anything important to add, don't add anything at all.

 

[LegendKiller]

Originally posted by: brandonbull
The financial industry could use a good "dumbing down". It's one big Ponzy scheme and we all could benefit from a lower number of smart people trying to cheat the system.

How is it a ponzi scheme?

 

[nullzero]

Originally posted by: LegendKiller

Originally posted by: nullzero
This has to be one of the dumbest LegendKiller rants I have heard in a long time. Truly epic fail post, from a guy who thinks he knows how the financial system works.

LOL, like you do know how it works?

Seriously, if you don't have anything important to add, don't add anything at all.

I know its frustrating believing in a false hope and living in a dream. Almost everything you have posted since the financial crisis started has been totally wrong or contradicting. You talked about all those misc. Federal Reserve programs and Treasury ones as being extremely positive to the U.S. and world economy.... Then on the other hand you rant off about free markets and how the top talent is leaving because of government pay caps.

Well guess what buddy you supported the bailouts and the programs in the first place so you just contradicted yourself and your free market views. The banks now have a new major share holder called uncle sam.

I am sick and tired of hearing fake free market pumpers on CNBC and other places.

 

[her209]

Originally posted by: Common Courtesy
The financial sector is made up of multiple sectors.

Think of it equivalent to the United States.
Because California is having problems with their budget; should Texas and Alaska have to cut their budgets (which are balanced) to support CA.

The bad boys are gone and the sector that they destroyed is also.

Your crew mates are drunk and light a keg of dynamite which blows a huge whole in the hull of your ship. Water is rushing in faster than what everyone can bail out. The captain is furious and orders those responsible to walk the plank to Davey Jones' locker. But it doesn't fix the problem that the whole damn ship is going to sink even if you had nothing to do with the explosion.

 

[EagleKeeper]

The example of yours; the ship is going down. All is lost anyhow no matter whare the crew is

A better analogy would be to have the pumps able to keep up if everyone lends a hand.
Getting rid of the shipmates will cause the ship to flood and all will be lost.

 

[Special K]

Originally posted by: nullzero

Originally posted by: LegendKiller

Originally posted by: nullzero
This has to be one of the dumbest LegendKiller rants I have heard in a long time. Truly epic fail post, from a guy who thinks he knows how the financial system works.

LOL, like you do know how it works?

Seriously, if you don't have anything important to add, don't add anything at all.

I know its frustrating believing in a false hope and living in a dream. Almost everything you have posted since the financial crisis started has been totally wrong or contradicting. You talked about all those misc. Federal Reserve programs and Treasury ones as being extremely positive to the U.S. and world economy.... Then on the other hand you rant off about free markets and how the top talent is leaving because of government pay caps.

Well guess what buddy you supported the bailouts and the programs in the first place so you just contradicted yourself and your free market views. The banks now have a new major share holder called uncle sam.

I am sick and tired of hearing fake free market pumpers on CNBC and other places.

The issue here is regulation of pay. The government may have been a stakeholder in these corporations through TARP, but that doesn't mean they had to impose pay restrictions on these bank's top employees.

For the record I'm not saying I support these huge paychecks, but your statement is incorrect - there is no contradiction between supporting TARP and being against the government imposing pay restrictions on banks that accepted TARP funds.

 

[nullzero]

Originally posted by: Special K

Originally posted by: nullzero

Originally posted by: LegendKiller

Originally posted by: nullzero
This has to be one of the dumbest LegendKiller rants I have heard in a long time. Truly epic fail post, from a guy who thinks he knows how the financial system works.

LOL, like you do know how it works?

Seriously, if you don't have anything important to add, don't add anything at all.

I know its frustrating believing in a false hope and living in a dream. Almost everything you have posted since the financial crisis started has been totally wrong or contradicting. You talked about all those misc. Federal Reserve programs and Treasury ones as being extremely positive to the U.S. and world economy.... Then on the other hand you rant off about free markets and how the top talent is leaving because of government pay caps.

Well guess what buddy you supported the bailouts and the programs in the first place so you just contradicted yourself and your free market views. The banks now have a new major share holder called uncle sam.

I am sick and tired of hearing fake free market pumpers on CNBC and other places.

The issue here is regulation of pay. The government may have been a stakeholder in these corporations through TARP, but that doesn't mean they had to impose pay restrictions on these bank's top employees.

For the record I'm not saying I support these huge paychecks, but your statement is incorrect - there is no contradiction between supporting TARP and being against the government imposing pay restrictions on banks that accepted TARP funds.

For a person like LegendKiller that keeps ranting on about free market and letting it decide it is a contradiction. If it was up to me I would let all the banks that cannot stay alive on their own fail. A lot of people are extremely pissed off about what these idiot banks have done (federal reserve being one of them).

If the banks don't like the pay caps they can pay the tax payer money back. Funny thing is a lot of these banks would not be here today if it was not for all the bailouts and bend the rule programs (no bank no one to pay anymore, problem would be solved with the pay cap ).

I laugh my ass off, when I hear we will loose top talent because of pay caps. Most of the people running the show in the financial sector, are just a bunch of scam artist running banks which are in effect big ponzi schemes.

I like to know what idiots would hire these rejects to run their company or give consultation. We are the laughing stalks of the world. Our banks over here would be better off hiring Chinese students to run them.

 

[LegendKiller]

Originally posted by: nullzero

Originally posted by: Special K

Originally posted by: nullzero

Originally posted by: LegendKiller

Originally posted by: nullzero
This has to be one of the dumbest LegendKiller rants I have heard in a long time. Truly epic fail post, from a guy who thinks he knows how the financial system works.

LOL, like you do know how it works?

Seriously, if you don't have anything important to add, don't add anything at all.

I know its frustrating believing in a false hope and living in a dream. Almost everything you have posted since the financial crisis started has been totally wrong or contradicting. You talked about all those misc. Federal Reserve programs and Treasury ones as being extremely positive to the U.S. and world economy.... Then on the other hand you rant off about free markets and how the top talent is leaving because of government pay caps.

Well guess what buddy you supported the bailouts and the programs in the first place so you just contradicted yourself and your free market views. The banks now have a new major share holder called uncle sam.

I am sick and tired of hearing fake free market pumpers on CNBC and other places.

The issue here is regulation of pay. The government may have been a stakeholder in these corporations through TARP, but that doesn't mean they had to impose pay restrictions on these bank's top employees.

For the record I'm not saying I support these huge paychecks, but your statement is incorrect - there is no contradiction between supporting TARP and being against the government imposing pay restrictions on banks that accepted TARP funds.

For a person like LegendKiller that keeps ranting on about free market and letting it decide it is a contradiction. If it was up to me I would let all the banks that cannot stay alive on their own fail. A lot of people are extremely pissed off about what these idiot banks have done (federal reserve being one of them).

If the banks don't like the pay caps they can pay the tax payer money back. Funny thing is a lot of these banks would not be here today if it was not for all the bailouts and bend the rule programs (no bank no one to pay anymore, problem would be solved with the pay cap ).

I laugh my ass off, when I hear we will loose top talent because of pay caps. Most of the people running the show in the financial sector, are just a bunch of scam artist running banks which are in effect big ponzi schemes.

I like to know what idiots would hire these rejects to run their company or give consultation. We are the laughing stalks of the world. Our banks over here would be better off hiring Chinese students to run them.

It basically comes down to this. If you're good and make money, you get paid for what you bring in. The people at that level are not C-level people, they aren't the ones who should be thinking long-term. They should be tactical thinkers at their level finding ways of making money in the longer-term strategy set by the C-level people. C-level people need to be compensated for longer-term performance because they are supposed to see the risks, mitigate them through changing tactical allocations, and move around problems.

I have no problems with changing the way execs are compensated, I personally think C-level bonuses for 1-year performance is bullshit. I think the same thing for many MD levels (which are pretty far from C-level), since they are product-line managers and need to also think strategically. Perhaps C-level needs to be compensated on 5-year performance, MDs on 3 year performance.

As far as anybody at a director level and below, it should either be 2-year performance or 1-year performance.

Ideally that's the way it should work.


As far as your "ponzi" scheme, explain to me why it is one? I see this bandied about but people don't understand what it means. Nor, when the make the accusation, can explain why they think it is one.


Finally, getting back to my original point. This problem isn't one of "bonus" or no "bonus", it is one of deferred compensation. Since the compensation scheme for i-bankers is one of 3 levels, simply eliminating the middle level (deferred comp) results in huge pay cuts. Since the latter two parts of compensation are known as "bonus", the populist bullshit going on results in a 40% paycut for the same level of hours.

 

[LegendKiller]

Originally posted by: nullzero

Originally posted by: LegendKiller

Originally posted by: nullzero
This has to be one of the dumbest LegendKiller rants I have heard in a long time. Truly epic fail post, from a guy who thinks he knows how the financial system works.

LOL, like you do know how it works?

Seriously, if you don't have anything important to add, don't add anything at all.

I know its frustrating believing in a false hope and living in a dream. Almost everything you have posted since the financial crisis started has been totally wrong or contradicting. You talked about all those misc. Federal Reserve programs and Treasury ones as being extremely positive to the U.S. and world economy.... Then on the other hand you rant off about free markets and how the top talent is leaving because of government pay caps.

Well guess what buddy you supported the bailouts and the programs in the first place so you just contradicted yourself and your free market views. The banks now have a new major share holder called uncle sam.

I am sick and tired of hearing fake free market pumpers on CNBC and other places.

Everything I have said being contradictory or wrong? Please post how? I posted 2 years before this thing went down, how it would go down and I got the gist of it correct.

As far as the FRB and Treasury programs. TARP did shore up the banks through the trough. TALF is getting the ABS market back to rational levels. If you knew even a shred of the other capital markets than the DJIA, you'd know that. Spreads for ABS securities have come down to at least tolerable levels and lending has begun again outside of TALF.

We aren't out of this, not by a long shot, but we aren't falling as fast either.

You take the "free market" ideology and thinking that it has to be an all-or-none game. Sorry, but that is just simply wrong. You don't have to have a 100% "free market" to have a good market, even Adam Smith acknowledged that. This is what libertopians will never realize.

 

[Robor]

Originally posted by: spidey07

Originally posted by: Robor

Originally posted by: spidey07
Obama's goal was to prevent any recovery so he can use this economic crisis to grab and control your life, your money, your health, your liberty, your property and any chance at prosperity. That is the only conclusion, force out the people that could actually help.

Further proof you are officially a tinfoil hat loon.

So why would obama do this if anybody with an ounce of common sense knew and could easily predict the outcome? Seriously, it didn't take much intelligence to know what would happen and I remember many threads where I and others told you this was what was going to happen.

I stand by my statement.

 

[Fear No Evil]

If Bush could orchestrate 9/11, surely Obama could manipulate the banks. He is the smartest man to ever live afterall.

 

[brandonbull]

Originally posted by: LegendKiller

Originally posted by: brandonbull
The financial industry could use a good "dumbing down". It's one big Ponzy scheme and we all could benefit from a lower number of smart people trying to cheat the system.

How is it a ponzi scheme?

What the US taxpayers were lead to believe about needing additional money to pay off the other investors. The current system couldn't support itself

Expanded credit taking the place of an expanded pool of investors.

 

[LegendKiller]

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull
The financial industry could use a good "dumbing down". It's one big Ponzy scheme and we all could benefit from a lower number of smart people trying to cheat the system.

How is it a ponzi scheme?

What the US taxpayers were lead to believe about needing additional money to pay off the other investors.

What specific situation are you talking about?

 

[brandonbull]

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull
The financial industry could use a good "dumbing down". It's one big Ponzy scheme and we all could benefit from a lower number of smart people trying to cheat the system.

How is it a ponzi scheme?

What the US taxpayers were lead to believe about needing additional money to pay off the other investors.

What specific situation are you talking about?

Expanded credit taking the place of an expanded pool of investors.

 

[LegendKiller]

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull
The financial industry could use a good "dumbing down". It's one big Ponzy scheme and we all could benefit from a lower number of smart people trying to cheat the system.

How is it a ponzi scheme?

What the US taxpayers were lead to believe about needing additional money to pay off the other investors.

What specific situation are you talking about?

Expanded credit taking the place of an expanded pool of investors.

Again, what are you *SPECIFICALLY* talking about. You talk in all of these shifty statements. Give me what program, what company, what investors, because all of these one-liner bullshit statements get nowhere.

It's like asking somebody why the sky is blue and having the following conversation.

Me: Why is the sky blue?
You: Because of light.
Me: What light?
You: The sun.
Me: What sun light?
You: Purple.
Me: Purple sun light?
You: No, purple drink.
Me: Purple drink sun light makes the sky blue?
You: No, Dave Chapelle.
Me: Purple drink sun light talked about by Dave Chapelle makes the sky blue.
You: Yes.


Really, state your case in a logical manner.

 

[TheSkinsFan]

Originally posted by: Harvey

Originally posted by: TheSkinsFan

All we're doing, by artificially limiting the salaries for our best American analysts at these banks, is pushing ALL SUCCESSFUL BANKING OFFSHORE. Period

When our most talented financial analysts leave, these bailed out banks won't stand a fucking chance in the global financial industry wherein foreign banks realize that they still need to pay their BEST employees very well. Period..

Right! Where are they going to go? I'm sure the Cayman Islands have thousands of well paying jobs just waiting. :roll:

The only thing far too many of these bozos are good at is ripping off the public to line their own pockets, furnish their summer chateaus and rig their golden parachutes.

What are they worth? Ever hear of fair market forces?

Apparently you didn't read the OP or the linked article in the OP -- I'm not suprised.

These employees are leaving for FOREIGN banks and/or non-TARP banks where they are still getting paid their actual "fair market" value -- which happens to be significantly higher than the Federal Government is allowing for at the TARP banks -- hence the term "brain drain."

These bailouts by the Feds will NOT alter what is actually the real fair market value for the employees; and competing banks, both foreign and domestic, will be the winners here -- NOT the TARP banks themselves.

The TARP banks are being left to the devices of second-rate community college grads who have no fucking clue how to do their jobs to begin with, let alone in times of financial peril.

In other words, if you support this as part of a real "plan" to save these banks, we should really be questioning your judgment.

 

[brandonbull]

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull
The financial industry could use a good "dumbing down". It's one big Ponzy scheme and we all could benefit from a lower number of smart people trying to cheat the system.

How is it a ponzi scheme?

What the US taxpayers were lead to believe about needing additional money to pay off the other investors.

What specific situation are you talking about?

Expanded credit taking the place of an expanded pool of investors.

Again, what are you *SPECIFICALLY* talking about. You talk in all of these shifty statements. Give me what program, what company, what investors, because all of these one-liner bullshit statements get nowhere.

It's like asking somebody why the sky is blue and having the following conversation.

Me: Why is the sky blue?
You: Because of light.
Me: What light?
You: The sun.
Me: What sun light?
You: Purple.
Me: Purple sun light?
You: No, purple drink.
Me: Purple drink sun light makes the sky blue?
You: No, Dave Chapelle.
Me: Purple drink sun light talked about by Dave Chapelle makes the sky blue.
You: Yes.


Really, state your case in a logical manner.

How about this. Clowns like yourself think it's ok to cheat people out of billions and then cry because you don't get enough of the bonus on the taxpayers dime.

I just did state my case. Credit was substituted for an investor pool. The taxpayers had to kick in a bunch of money to keep The Financial industry going because they used the new credit to fund returns. This defines a Ponzi scheme.

I don't care if you want to face the facts or get your panties in a wad. Credit was used to fund loans which backed bonds which was sold to people and then when the credit dried up so did the returns.

 

[TheSkinsFan]

Originally posted by: senseamp
On average, the highly compensated employees lost these companies hundreds of billions over the long term. Granted some of them turned a profit, but so what, some gamblers end up beating the house too. But on average, high compensation was not just a huge waste of money, it encouraged excessive risk taking in the name of short term profits. Unless you can reliably predict who is going to turn a huge profit going forward, and who is simply gambling, I'd rather the government save me money and hire boring second tier bankers, the types who did not get huge bonuses, but stayed at regional banks, played it safe and avoided this mess entirely. Wall street hot shots who think they are entitled to a bonus no matter what can take a hike.

I don't think you understand how these banks are structured. The employees being discussed here were NOT randopmly scattered amongst the "gamblers" who lost billions. Instead, these good employees were in completely seperate divisions where risk and short-term gains were not involved.

Repeat this to yourself until it sinks in: These employees had absolutely NOTHING to do with the financial collapse of these banks... These employees had absolutely NOTHING to do with the financial collapse of these banks... These employees had absolutely NOTHING to do with the financial collapse of these banks...

Or, perhaps you need to start with a variation of the mantra I tried to teach you the other day: Not everything my own political party does is a good idea... Not everything my own political party does is a good idea... Not everything my own political party does is a good idea...

 

[LegendKiller]

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: LegendKiller

Originally posted by: brandonbull
The financial industry could use a good "dumbing down". It's one big Ponzy scheme and we all could benefit from a lower number of smart people trying to cheat the system.

How is it a ponzi scheme?

What the US taxpayers were lead to believe about needing additional money to pay off the other investors.

What specific situation are you talking about?

Expanded credit taking the place of an expanded pool of investors.

Again, what are you *SPECIFICALLY* talking about. You talk in all of these shifty statements. Give me what program, what company, what investors, because all of these one-liner bullshit statements get nowhere.

It's like asking somebody why the sky is blue and having the following conversation.

Me: Why is the sky blue?
You: Because of light.
Me: What light?
You: The sun.
Me: What sun light?
You: Purple.
Me: Purple sun light?
You: No, purple drink.
Me: Purple drink sun light makes the sky blue?
You: No, Dave Chapelle.
Me: Purple drink sun light talked about by Dave Chapelle makes the sky blue.
You: Yes.


Really, state your case in a logical manner.

How about this. Clowns like yourself think it's ok to cheat people out of billions and then cry because you don't get enough of the bonus on the taxpayers dime.

I just did state my case. Credit was substituted for an investor pool. The taxpayers had to kick in a bunch of money to keep The Financial industry going because they used the new credit to fund returns. This defines a Ponzi scheme.

I don't care if you want to face the facts or get your panties in a wad. Credit was used to fund loans which backed bonds which was sold to people and then when the credit dried up so did the returns.

What "credit"?