M-P

Ritholtz, Ratigan Take on the 'Giant Vampire Squid'

The GS/Govt relationship is clear for all to see ... per Barry, GS has a nice quid pro quo going ... they are getting exactly what they paid for. The size of their latest bonuses is basically ridiculous, given the taxpayer backstops and the way the bankruptcy rules are applied differently for GS.

The real shame would be if no one speaks up ... I have written my senators and congressman - I may be delusional, but if enough people speak up, it could become politically unfavorable for GS to pay out what they are looking to ... think John Thain and his 10m payout ...

Unintended Consequences of Four Government Policies

Many of these consequences have been debated ad nauseum ... the salary cap piece is political symbolism - most have been grandfathered and the main part of total comp has not been salary ... the best and the brightest comment is amusing, if not inane. If the salaries over the last few years at GS, Countrywide, BAC, ML, etc., etc., are directly related to the "talent" that was/is there, please define talent for me - get real specific. A talent for malfeasance and literally mortgaging one's future on specious bets and vegas-style risks is not "talent" in my mind. The best and brightest and the comp correlation is weak at best - think politics, business, sports, etc. Also, the bottom line on the mark to market is the underlying asset - it was often too risky, too opaque, and too hard to value. The mark is part of the issue in illiquid, hard to value markets (mark to model markets), but the other issue is the asset itself. Risky decisions have consequences - in the mark case, it's more immediate - hopefully, the bank's, etc. decisions are within a portfolio of decisions that balance risk and prudence. The mark issue seems like a false dilemma.

Banking's Ins and Outs: $188 Billion from Bailout, $1.6 Billion to Execs

I believe in capitalism and the implied pay for performance contract, but I have trouble with the bank execs receiving this kind of $ when they are being subsidized by the taxpayer because they took undue risk. Why don't we look at a clawback provision whereby we take back $ that was ill-gotten via reckless leverage and risk. Unfortunately, the seeds of failure were planted a number of years ago and we are now cleaning up the mess. Why do we reward malfeasance? Why do we subsidize recklessness? Why do we pay for incompetence?