NY Investment Bank Salaries = Vietnam's GDP

Includes: BSC, GS, LEH, MER, MS
by: David Jackson

I found the discusson in this year's Barron's Roundtable somewhat unsatisfying and unfocused. But one comment by Marc Faber leapt off the page (or rather the screen):

Marc Faber: I'm less worried about that [an asset bubble] than this: The five brokerage firms in New York -- Merrill Lynch, Morgan Stanley, Lehman Brothers, Bear Stearns and Goldman Sachs -- paid out $36 billion in 2006 bonuses. Compensation and bonuses together roughly are equal to Vietnam's GDP.

Marc's interpretation of this remarkable statistic was as follows:

I see a bipolar world in which there's the typical household in the U.S. or Western Europe, and then this huge wealth concentration. It will lead to a political backlash one day.

But what about the wider implications for the relationship between the developed and developing world? I'm still processing this.

Interested to hear readers' thoughts -- please leave a comment below.