ETFnerd

5 Things the Treasury Should Clarify Now

Well it was going well until we get to the last exec pay paragraph.

Spoken like a true investment banker protecting his bonus.

I don't believe that exec pay be should be limited, but it should be fair. Today, the pay of financial execs and associates on trading floors is based on a if we win we reap huge bonuses and if we lose taxpayers, investors or some other bag holders reap big losses. But certainly, the IB creators and distributors never want to take responsibility nor want to be accountable for the losses by returning some of the obscene bonuses paid out for failed deals.

There is a huge agency problem at IBs where the investment horizon of any deal is the bankers' bonus pay out date. Using CDS you can insure the garbage that comes out of their shops for a couple of years. They receive their bonus, watch it trade with protection, and subsequently laugh all the way to the bank when the bagholders are hit with huge losses.

I was impressed with the article until in the end, when the author shows his true colors as another weasel with valuable interests to protect.