pacalis

Volcker's Wake Up Call: Spread the Word

1. “[Financial engineering] moves around the rents in the financial system, but not only this, as it seems to have vastly increased them.”
2. “I have found very little evidence that vast amounts of innovation in financial markets in recent years have had a visible effect on the productivity of the economy”

I agree with the moving around rents and lack of productivity, the main points. But if rents have vastly increased, by definition productivity must also have increased, everything else (outputs/inputs) being equal. Otherwise there is an argument that financial engineering has increased the scales of inputs and outputs (productivity fixed) thus leading to rent increases, but this is not what I think he was saying, is it?

Or does he mean the variability of rents has increased?

The Secret Paulson-Goldman Meeting

John,
While the media, except PBS, celebrates the story of the Lehman failure, GS would have been concerned about the Bear Sterns failure. So as I read it, there was speculation by GS that Lehman might collapse like Bear Sterns. Given the rest of the book this also makes sense, Lehman was shopping for a buyer for months and there's even a story in there where Paulson ask Lehman to share their book with GS.


On Oct 21 10:11 AM John Lounsbury wrote:

> Felix - - -
>
> Good post. The Sorkin book is being added to my must read list.<br/>
>
> I found the following quote you gave problematic:
>
> For the next hour, Paulson regaled his old friends with stories about
> his time in Treasury and his prognostications about the economy.
> They questioned him about the possibility of another bank blowing
> up, like Lehman, and he talked about the need for the government
> to have the power to wind down troubled firms, offering a preview
> of his upcoming speech.
>
> This doesn't make sense. The meeting was in June and Lehman blew
> up in September. The entire meaning would be changed and become consistent
> with history if the wording was changed as follows: "... the possibility
> of a major bank blowing up, like Lehman would later,..."

The Secret Paulson-Goldman Meeting

On Oct 21 12:51 PM James Lewis wrote:
> The Marriott in Moscow is not bugged. Well not all of it.
At least it's not bugged by the FBI, so no worries.

> This has nothing to do with dis-information and everything to do
> with painting a clear picture to the Russians that Paulson was meeting with Goldman.

Agree. Douchebag carry trade - Paulson was borrowed in June 2008 by GS right before his social capital eroded.

>A little later Paulson stopped off in Shanghai as well to have a little chat.

Updating "Chinese wall" technology?

Hands Off Goldman Bonuses

Let's say these are all great ideas... Should Obama appoint a Presidential "Titanic Deck Chair" Czar to implement them?

On Oct 21 03:16 PM gato wrote:

> My second comment:
> The bonus packages should remain, but with a "slight" modification
> as follows:
> 1- Any bonus payment above $10,000 would be payed in U.S. coins preferably
> in nickles, recipients would have to personally pick up the funds
> at a local post office passport ID required(They need the business)
>
> 2- If the bonus recipient prefers the bonus money could be placed
> in a gov. run fund for 5 years minimum for 3% p.a. interest to build
> low income housing or to rebuild bankrupt auto firms maintaining
> jobs for the working class.
> 3- All wages would be set off the Presidents pay, which would be
> the highest in the country $500K max. However, the first year the
> Pres. is in office is usually "on the job training" so, the President
> his salary would be adjusted for that say $150K and rising to $500K
> if the he/she manages to prevent(s) war.
> 4- Inflation would be indexed as follows: Inflation up 2% p.a.
>
> Congress and appointees pay would be indexed "down" 2% p.a.
> 5- Elections and electioneering would be have to be completed in
> 3 months max.

Hands Off Goldman Bonuses

Practically, if and when the public finds a way to curtail or restrict these large windfalls, these profiteers will be long gone and these restrictions won't matter. The US is in an end game and the powerful are grabbing and securing all they can while the public bitches and moans. There's not much skim out there left, particularly as transactions dry up and productive capital declines. So the good news in that wall street bonuses will soon solve themselves. The bad news is that we don't have enough Charlie J's, and worse that there are more in China every day.

The Secret Paulson-Goldman Meeting

Hmmm, June 2008... Obviously the Russian's were engaged in a douchebag carry trade.


On Oct 20 03:08 PM Alan Young wrote:

> On top of all that, why would the entire board of GS travel from
> NY to Moscow to meet with Gorbachev? If it were just about getting
> advice for their Russian investments, a manager or two would have
> sufficed. Are they getting advice about how to loot the USA, the
> way Russia was looted of all public property when the Soviet government
> collapsed?

Five Reasons the Market Could Crash This Fall

All this doom and gloom.... My view is that recent bullish trends are grounded in the simple recognition that boomers are simply getting way more productive. Profits are down because of fantastic wage increases and incentive-based profit sharing. And unemployment figures just represent the number of loafers on longer term holidays. No worries! :)