Wall street ontrack to reward record pay

[Ozoned]

Heh. Heh. A billion dollars just doesn't buy that much anymore.

 

[TheSkinsFan]

Originally posted by: miketheidiot

Originally posted by: TheSkinsFan
People who say things like that are usually the ones who are without.

banks are earning economic profits, a common symptom of broken markets particularly cronyism and monopolistic behavior.

profits are a symptom of something that's broken?

And what exactly is an "economic profit"? Is there any other kind?

LOL... you obviously do not understand finance or business in general -- risk is everything, and always has been. It's when the risks pass a certain ethical threshold that regulation should stop them from going further -- which happens to be exactly what Congress has failed to enact during this entire debacle.

finance is about analyzing, mitigating and spreading risk, not pursuing it

Pursuing it? I'd say that you'd have to pursue it in order to "analyze, mitigate, and spread" the same.

Please define "excess profits," and explain to me who/what should determine such.

excess profits would be determined by the going rate of risk vs return on capital of a given investment.

How would such a thing be determined artificially, and by whom?

banks have one of the highest returns on capital around, only monopolist industries (ie pharma) have better returns.

Banks do very well, yes. How is that a bad thing if they're doing so within the confines of the law?

Employees clearly aren't earning market wages, people in other more stressful industries requiring greater skill and training earn less money, in spite of an enormous influx of people into the finance industry. Its very difficult to get into high finance, and there is a huge pay difference between those in and those that aren't, and a huge gap in pay.

Fair wages are determined by the markets in each individual industry, not between entirely different industries. What you are suggesting there is the very socialist concept of equal distribution of wealth, to which I would respond "HA! Fuck that!"

There is no correlation between entirely different job markets, nor should there be.

Generally this strongly suggests that there are false impediments to free movement of labor, and the culture of the industry as well as our cultural view of the industry reflects that. Hence not free market wages.

A buddy of mine grew up in five different foster homes. We were roommates in college, and both of us attended the same undergraduate business program. He eventually ended up graduating at the top of his class at the Warton School of Business grad program, and he did so entirely on his own dime and effort. He is now a gazillionaire investor working international finance for a global firm based out of London (he did lose roughly 60% of his holding last year though... ouch!) Neither one of us came from a wealthy family, we had no connections to speak of, but we BOTH had the same chance to go down the finance road. He chose to take that path, while I chose to join the military.

I do not regret my decision, nor do I hold his choice against him. He has earned every penny and every job that he has ever had.

IOW, you're full of shit. There are no "impediments" beyond those you impose upon yourself. Do some others have it much easier? Of course they do! But, that doesn't mean you and I can't get there as well.

Your attitude, and those who share it, makes me fucking sick.

VERY few finance people are essential to their particular job, there are many qualified people who can't get a job in the industry, the place is a known good-ol-boys network with next to no accountability, and you take these sorts of wages to be the outcome of a free markets?

Yes, I do. Every bank and investment firm in the world has similar packages for each level position. That is called a job market, and those packages are market-driven. The fact that you feel like the kid who didn't get picked for the team in gym doesn't bother me in the least.

I do blame banks for obfuscating the debate, but that's not a criminal offense, nor is it a viable excuse for a lack of action by Congress.

not criminal, but its certainly part of the problem. Congress is a mess and they are exploiting it; it might be legal but its certainly bad ethics and certainly not good for either the shareholders or the country.

OK, but since you admit that it's not criminal, what exactly do you hope to do about it?

 

[TheSkinsFan]

Originally posted by: miketheidiot

Originally posted by: TheSkinsFan

Originally posted by: ebaycj

Originally posted by: spidey07
They made the banks money. They deserve a cut of the revenue they brought in. Stop the jealousy and think logically.

Really. So they're ENTITLED to recieve a cut?

I've made my company a lot of money. Does that mean I'm ENTITLED to a cut of the money I've made for my company (above and beyond my salary)?

Sounds like ENTITLEMENT MENTALITY to me, something the 'pubs love to rip on the dems for.

But it's ok to feel entitled if you're a banker. Right.

It's not that the individual employees are "entitled" to the bonuses, it's that nobody outside the company itself should have the power to make that decision. It's up to the private company to determine what it does with its own wages and profit sharing.

Then again, do you feel "entitled" to a fair wage for your particular profession based on your experience, education, and performance? Well, for bankers, these types of bonuses are a globally determined fair form of compensation for their chosen profession. Would you deny them wages that are equal to that of their global peers?

again, the employees of the company are not accountable to their shareholders, the people that own the company.

The companies do need to answer to their shareholders, you're right. So, good luck at the next meeting!

What, exactly, do you plan to ask them for?

 

[Nebor]

Originally posted by: TheSkinsFan

Originally posted by: miketheidiot

Originally posted by: TheSkinsFan
People who say things like that are usually the ones who are without.

banks are earning economic profits, a common symptom of broken markets particularly cronyism and monopolistic behavior.

profits are a symptom of something that's broken?

And what exactly is an "economic profit"? Is there any other kind?

I dare say you just took yourself out of this discussion.

 

[jackace]

Originally posted by: Nebor

Originally posted by: TheSkinsFan

Originally posted by: miketheidiot

Originally posted by: TheSkinsFan
People who say things like that are usually the ones who are without.

banks are earning economic profits, a common symptom of broken markets particularly cronyism and monopolistic behavior.

profits are a symptom of something that's broken?

And what exactly is an "economic profit"? Is there any other kind?

I dare say you just took yourself out of this discussion.

LOL that was funny. I give you a :thumbsup:

 

[miniMUNCH]

Originally posted by: GuitarDaddy
Text

How is this justified? After billions of bailout money and 7mil+ people losing their jobs in the last 18mos these guys are reporting record setting compensation even higher than the markets peak in 2007:|

Great system we have!

1. Gamble stupidly and wildly with other peoples money
2. Lose other peoples money and wreck the economy causing millions of job losses
3. Get billions in taxpayer bailout
4. Make billions on the bubble, bust and rebound that you created
5. Profit $140bil

I'm late to the party... so I'll quote the OP.

This isn't the first time the banking system has done this and it won't be the last.

I have said it before and I'll say again... folks should read The Creature of Jekyll Island. The book is a little sensational and theatrical in parts but, for most the part, it is accurate.

The Banking Cartel's are in place to maximize their profit via economic and political manipulation of markets and shovel whatever loses they incur onto the taxpayer.

 

[TheSkinsFan]

Originally posted by: jackace

Originally posted by: Nebor

Originally posted by: TheSkinsFan

Originally posted by: miketheidiot

Originally posted by: TheSkinsFan
People who say things like that are usually the ones who are without.

banks are earning economic profits, a common symptom of broken markets particularly cronyism and monopolistic behavior.

profits are a symptom of something that's broken?

And what exactly is an "economic profit"? Is there any other kind?

I dare say you just took yourself out of this discussion.

LOL that was funny. I give you a :thumbsup:

For banks...lol... What I meant was, in banking, nearly ALL profits are of the "economic" variety, so I meant to ask him what other kind of profits banks are supposed to generate. My bad.

 

[jackace]

Originally posted by: TheSkinsFan

Originally posted by: jackace

Originally posted by: Nebor

Originally posted by: TheSkinsFan

Originally posted by: miketheidiot

Originally posted by: TheSkinsFan
People who say things like that are usually the ones who are without.

banks are earning economic profits, a common symptom of broken markets particularly cronyism and monopolistic behavior.

profits are a symptom of something that's broken?

And what exactly is an "economic profit"? Is there any other kind?

I dare say you just took yourself out of this discussion.

LOL that was funny. I give you a :thumbsup:

For banks...lol... What I meant was, in banking, nearly ALL profits are of the "economic" variety, so I meant to ask him what other kind of profits banks are supposed to generate. My bad.

I don't think you understand the term "economic profits," that's what made his comment so funny. Not trying to rag on you, but you should probably google it.

Hint - it doesn't mean normal profits.

 

[TheSkinsFan]

Originally posted by: jackace

Originally posted by: TheSkinsFan

Originally posted by: jackace

Originally posted by: Nebor

Originally posted by: TheSkinsFan

Originally posted by: miketheidiot

Originally posted by: TheSkinsFan
People who say things like that are usually the ones who are without.

banks are earning economic profits, a common symptom of broken markets particularly cronyism and monopolistic behavior.

profits are a symptom of something that's broken?

And what exactly is an "economic profit"? Is there any other kind?

I dare say you just took yourself out of this discussion.

LOL that was funny. I give you a :thumbsup:

For banks...lol... What I meant was, in banking, nearly ALL profits are of the "economic" variety, so I meant to ask him what other kind of profits banks are supposed to generate. My bad.

I don't think you understand the term "economic profits," that's what made his comment so funny. Not trying to rag on you, but you should probably google it.

Hint - it doesn't mean normal profits.

I know that it doesn't mean "normal" profits, which is why I clarified my question to deal with banks, which is the topic we're discussing specifically. And we're not talking about ATM fees here, so why would we be discussing any other type of profits?

If banks were to give up their "economic" profits, they'd cease to exist. Such profits, at a bank or investment house, are the foundation of those businesses, and they are the result of an intentional and acceptable monopoly (unless you're an advocate of competing private currencies?). It would make no sense to limit them to only normal profits, which is what he implied when he made the statement that their economic profits are the result of a broken system. Economic profits are not always the result of something being broken. The very nature of a business that deals with investments and the movement of such means that normal profitability rules don't apply.

So I asked him "is there any other kind?" when what I meant was "Is there any other kind for banks and investment firms?"

make sense? I guess my original question wasn't clear enough, but it certainly didn't take me out of this discussion.

 

[heyheybooboo]

I'm as mad as Hell and I'm not going to take this anymore.

It's too bad, really. Too big to fail is too big to exist. Privatizing profits while sucking the life out of the taxpayer, huh? If the bonuses continue all TARP funds are to be immediately repaid with interest (and I would prefer additional special assessments and penalties) and the Fed Window shall close. The higher your leverage, Fed exposure and bonus outlay, the higher your assessments and penalties.

If they don't want to play fair it's time to bust 'em up. I don't want to hear any whinning; they've brought it on themselves. They ain't untouchable.

 

[jackace]

Originally posted by: TheSkinsFan

Originally posted by: jackace

Originally posted by: TheSkinsFan

Originally posted by: jackace

Originally posted by: Nebor

Originally posted by: TheSkinsFan

Originally posted by: miketheidiot

Originally posted by: TheSkinsFan
People who say things like that are usually the ones who are without.

banks are earning economic profits, a common symptom of broken markets particularly cronyism and monopolistic behavior.

profits are a symptom of something that's broken?

And what exactly is an "economic profit"? Is there any other kind?

I dare say you just took yourself out of this discussion.

LOL that was funny. I give you a :thumbsup:

For banks...lol... What I meant was, in banking, nearly ALL profits are of the "economic" variety, so I meant to ask him what other kind of profits banks are supposed to generate. My bad.

I don't think you understand the term "economic profits," that's what made his comment so funny. Not trying to rag on you, but you should probably google it.

Hint - it doesn't mean normal profits.

I know that it doesn't mean "normal" profits, which is why I clarified my question to deal with banks, which is the topic we're discussing specifically. And we're not talking about ATM fees here, so why would we be discussing any other type of profits?

If banks were to give up their "economic" profits, they'd cease to exist. Such profits, at a bank or investment house, are the foundation of those businesses, and they are the result of an intentional and acceptable monopoly (unless you're an advocate of competing private currencies?). It would make no sense to limit them to only normal profits, which is what he implied when he made the statement that their economic profits are the result of a broken system. Economic profits are not always the result of something being broken. The very nature of a business that deals with investments and the movement of such means that normal profitability rules don't apply.

So I asked him "is there any other kind?" when what I meant was "Is there any other kind for banks and investment firms?"

make sense? I guess my original question wasn't clear enough, but it certainly didn't take me out of this discussion.

I stand by my last post. You really need to google the term "economic profit" because you clearly don't know what it means. Check out Wikipedia even they have a pretty decent explanation of what it means.

edit- here is a quote from Wikipedia that will help you understand where the guy you quoted was going.

"Economic profit does not occur in perfect competition in long run equilibrium."

 

[spidey07]

You can easily spot those that understand business and those that don't in this thread. So far there's about 4 people that actually understand it in the thread. Everybody else is just jealous.

 

[BigDH01]

Originally posted by: spidey07
You can easily spot those that understand business and those that don't in this thread. So far there's about 4 people that actually understand it in the thread. Everybody else is just jealous.

You can easily spot those that speak as though they are in a position of intellectual and moral superiority in this thread. So far, there's about every person that exhibits this behavior in this thread. Everybody else is just an idiot.

 

[TheSkinsFan]

Originally posted by: jackace
"Economic profit does not occur in perfect competition in long run equilibrium."

You're under the mistaken impression that this definition applies to every industry or circumstance. You're also under the mistaken impression that the financial industry resembles any/every other.

Ever taken a finance class?

 

[TheSkinsFan]

Originally posted by: heyheybooboo
I'm as mad as Hell and I'm not going to take this anymore.

It's too bad, really. Too big to fail is too big to exist. Privatizing profits while sucking the life out of the taxpayer, huh? If the bonuses continue all TARP funds are to be immediately repaid with interest (and I would prefer additional special assessments and penalties) and the Fed Window shall close. The higher your leverage, Fed exposure and bonus outlay, the higher your assessments and penalties.

If they don't want to play fair it's time to bust 'em up. I don't want to hear any whinning; they've brought it on themselves. They ain't untouchable.

As long as those institutions continue to pay back the loans in accordance with the all agreed upon terms, how can you fault them for anything they're doing now? Hell, there even some firms that are paying it back 10x faster than expected!

None of them wish to remain under the Government thumb for very long, so they're doing everything in their power to get the Fed monkey off their backs as fast as possible -- the bonus issue being one of the reasons why they're doing so. They're dying to become as competitive with their foreign counterparts as they once were, and the monkey is definitely holding them back.

 

[BigDH01]

Originally posted by: TheSkinsFan

Originally posted by: jackace
"Economic profit does not occur in perfect competition in long run equilibrium."

You're under the mistaken impression that this definition applies to every industry or circumstance. You're also under the mistaken impression that the financial industry resembles any/every other.

Ever taken a finance class?

It should apply in any perfect market situation. Of course, we never have perfect markets and every real world market is inefficient. Profit can be used as a measure of this inefficiency.

 

[LTC8K6]

http://blogs.reuters.com/rolfe.../10/08/tarp-deadbeats/

Woo hoo!

 

[Jaskalas]

Originally posted by: GuitarDaddy
Text

How is this justified? After billions of bailout money and 7mil+ people losing their jobs in the last 18mos these guys are reporting record setting compensation even higher than the markets peak in 2007:|

Great system we have!

1. Gamble stupidly and wildly with other peoples money
2. Lose other peoples money and wreck the economy causing millions of job losses
3. Get billions in taxpayer bailout
4. Make billions on the bubble, bust and rebound that you created
5. Profit $140bil

That we allowed #3 to happen is the greatest crime. When people came out against bailouts, it was for a very good reason.

 

[Special K]

Originally posted by: miniMUNCH

Originally posted by: GuitarDaddy
Text

How is this justified? After billions of bailout money and 7mil+ people losing their jobs in the last 18mos these guys are reporting record setting compensation even higher than the markets peak in 2007:|

Great system we have!

1. Gamble stupidly and wildly with other peoples money
2. Lose other peoples money and wreck the economy causing millions of job losses
3. Get billions in taxpayer bailout
4. Make billions on the bubble, bust and rebound that you created
5. Profit $140bil

I'm late to the party... so I'll quote the OP.

This isn't the first time the banking system has done this and it won't be the last.

I have said it before and I'll say again... folks should read The Creature of Jekyll Island. The book is a little sensational and theatrical in parts but, for most the part, it is accurate.

The Banking Cartel's are in place to maximize their profit via economic and political manipulation of markets and shovel whatever loses they incur onto the taxpayer.

Wow, $20+ for a used copy? My local library doesn't seem to carry this book either.

 

[jackace]

Originally posted by: BigDH01

Originally posted by: TheSkinsFan

Originally posted by: jackace
"Economic profit does not occur in perfect competition in long run equilibrium."

You're under the mistaken impression that this definition applies to every industry or circumstance. You're also under the mistaken impression that the financial industry resembles any/every other.

Ever taken a finance class?

It should apply in any perfect market situation. Of course, we never have perfect markets and every real world market is inefficient. Profit can be used as a measure of this inefficiency.

I was trying to just give him hints, but you pretty much explained how the term was used in this thread. Thank you.

 

[TheSkinsFan]

Originally posted by: BigDH01

Originally posted by: TheSkinsFan

Originally posted by: jackace
"Economic profit does not occur in perfect competition in long run equilibrium."

You're under the mistaken impression that this definition applies to every industry or circumstance. You're also under the mistaken impression that the financial industry resembles any/every other.

Ever taken a finance class?

It should apply in any perfect market situation. Of course, we never have perfect markets and every real world market is inefficient. Profit can be used as a measure of this inefficiency.

It is very difficult, if not impossible, to use profit as an accurate measure of efficiency in financial markets. You could argue that it should be possible, and that changes could/should be made to the financial industries to make that so, but it's not.

 

[BigDH01]

Originally posted by: TheSkinsFan

Originally posted by: BigDH01

Originally posted by: TheSkinsFan

Originally posted by: jackace
"Economic profit does not occur in perfect competition in long run equilibrium."

You're under the mistaken impression that this definition applies to every industry or circumstance. You're also under the mistaken impression that the financial industry resembles any/every other.

Ever taken a finance class?

It should apply in any perfect market situation. Of course, we never have perfect markets and every real world market is inefficient. Profit can be used as a measure of this inefficiency.

It is very difficult, if not impossible, to use profit as an accurate measure of efficiency in financial markets. You could argue that it should be possible, and that changes could/should be made to the financial industries to make that so, but it's not.

Do you think this is an argument that would be juxtaposed to someone arguing that it is?

Explain to me why profits in the financial sector can't be used as a measure of inefficiency without resorting to those prerequisites that have been enumerated when describing a perfectly efficient market.

 

[TheSkinsFan]

Originally posted by: BigDH01

Originally posted by: TheSkinsFan

Originally posted by: BigDH01

Originally posted by: TheSkinsFan

Originally posted by: jackace
"Economic profit does not occur in perfect competition in long run equilibrium."

You're under the mistaken impression that this definition applies to every industry or circumstance. You're also under the mistaken impression that the financial industry resembles any/every other.

Ever taken a finance class?

It should apply in any perfect market situation. Of course, we never have perfect markets and every real world market is inefficient. Profit can be used as a measure of this inefficiency.

It is very difficult, if not impossible, to use profit as an accurate measure of efficiency in financial markets. You could argue that it should be possible, and that changes could/should be made to the financial industries to make that so, but it's not.

Do you think this is an argument that would be juxtaposed to someone arguing that it is?

Explain to me why profits in the financial sector can't be used as a measure of inefficiency without resorting to those prerequisites that have been enumerated when describing a perfectly efficient market.

One word might be enough: futures.

 

[spidey07]

So nobody wants to address that this big number really only means an average TOTAL compensation of 146k including retirement, health/dental/life insurance, disability and other fringe benefits?

 

[BigDH01]

Originally posted by: TheSkinsFan

Originally posted by: BigDH01

Originally posted by: TheSkinsFan

Originally posted by: BigDH01

Originally posted by: TheSkinsFan

Originally posted by: jackace
"Economic profit does not occur in perfect competition in long run equilibrium."

You're under the mistaken impression that this definition applies to every industry or circumstance. You're also under the mistaken impression that the financial industry resembles any/every other.

Ever taken a finance class?

It should apply in any perfect market situation. Of course, we never have perfect markets and every real world market is inefficient. Profit can be used as a measure of this inefficiency.

It is very difficult, if not impossible, to use profit as an accurate measure of efficiency in financial markets. You could argue that it should be possible, and that changes could/should be made to the financial industries to make that so, but it's not.

Do you think this is an argument that would be juxtaposed to someone arguing that it is?

Explain to me why profits in the financial sector can't be used as a measure of inefficiency without resorting to those prerequisites that have been enumerated when describing a perfectly efficient market.

One word might be enough: futures.

What about them?