First Collective Quarterly Loss in Recorded History for S&P 500

[KRonn]

I love the entire witch-hunt vibe of this entire thing. It is so refreshingly medieval!

Yes, like a tonic...or a salve upon the wounds.

So much fail, by so few, decimating so many!  Almost Churchillian!    :-\


Even as annoyed as I am with all this damage done to the economy, people, businesses, I still don't want to see Socialism, or govt taking over, or that kind of thing. Regulations and such, yes, but not the extremes in changes to business.

[Berkut]

DOW is up over 1% today. Clearly the worst is over.

[Malthus]

I love the entire witch-hunt vibe of this entire thing. It is so refreshingly medieval!

It is hardly surprising that corporate welfare cases awarding huge bonuses after accepting public bail-out money should attract political heat, and even buffoonery.

[Malthus]

I love the entire witch-hunt vibe of this entire thing. It is so refreshingly medieval!

Yes, like a tonic...or a salve upon the wounds.

So much fail, by so few, decimating so many!  Almost Churchillian!    :-\


Even as annoyed as I am with all this damage done to the economy, people, businesses, I still don't want to see Socialism, or govt taking over, or that kind of thing. Regulations and such, yes, but not the extremes in changes to business.

Thing is, what we have here is in a way the worst of both worlds - socialism in the form of a massive gov't bailout, complete with positively libertarian lack of oversight.

[The Minsky Moment]

[What are the chances that masses of disgruntled financial types from insolvent companies would find alternative lucrative jobs in this economy? Is there someone out there just dying to hire them?

You might be surprised about this.

There are still a lot of funds out there with investible cash.  And there are these multi-billion or trillion dollar securities portfolios that the government and the banks are going to want to liquidate.  The next stage is going to be vulture funds and the like buying pieces of these positions at a discount. The ones that will make the most money will be the ones that have the most insight and knowledge about these complex securities portfolios.  And what better way to gain such insight then to hire the people who put them together in the first place.

This is exactly the process of what happened in the "junk bond" crash of the late 80s/early 90s.  A lot of the Drexel Burnham guys who lost their jobs when their firm crashed underneath the weight of bloated junk bond portfolios got snapped up by hedge funds and other banks, where they assisted in buying back pieces or their old junk portfolios at deep discounts; within a few years they and their new employers had made a lot of money.

On Wall Street, the chips may shuttle back and forth wildly, and everyone keeps switching seats.  But the same faces can be found at the same tables playing the same game.

[garbon]

Heh, want to see drama? Read the chart in the OP. 

To state that these companies have collectively made bad decisions lately and there is something systemically amiss with corporate governance is merely to state the obvious.

There are many levels of corporate governance. To say that every single level failed is absurd.

[Malthus]

On Wall Street, the chips may shuttle back and forth wildly, and everyone keeps switching seats.  But the same faces can be found at the same tables playing the same game.

... which goes back to the problems with corporate governance, and why massively bailing the system out without making any substantive changes to it seems to be a losing game.

However, the outlook certainly does not seem so very rosy:

http://www.theglobeandmail.com/servlet/story/LAC.20090317.RBROKERAGES17/TPStory/Business

It's a sharp contrast with Wall Street, with the State of New York reporting that securities industry employment has plunged 8.4 per cent, from 213,000 jobs in mid-2007 to 195,000 last November. New York Mayor Michael Bloomberg is forecasting that things could get much worse, with 46,000 financial workers expected to be out of a job by the middle of 2010.

That's like a 21% decline projected; hard to believe that a "retention bonus" is truly necessary in this market.

[Malthus]

Heh, want to see drama? Read the chart in the OP. 

To state that these companies have collectively made bad decisions lately and there is something systemically amiss with corporate governance is merely to state the obvious.

There are many levels of corporate governance. To say that every single level failed is absurd.

What point are you attempting to make? That some manager somewhere has been competent?

Granted - that's not in dispute; but the massive financial failures could not have happened without a systemic lack of oversight in these firms. 

[garbon]

What point are you attempting to make? That some manager somewhere has been competent?

Granted - that's not in dispute; but the massive financial failures could not have happened without a systemic lack of oversight in these firms. 

Yes, your statement overreaches greatly; which I suppose is what led you into Marty analogy hour.

[garbon]

... which goes back to the problems with corporate governance, and why massively bailing the system out without making any substantive changes to it seems to be a losing game.

Which is why I was not a fan of the bailouts to begin with.  Congress et al. are so bad at managing their own affairs that there was no hope of them making appropriate changes to corporations. I think this most recent call for blood is evidence of that.

[Malthus]

What point are you attempting to make? That some manager somewhere has been competent?

Granted - that's not in dispute; but the massive financial failures could not have happened without a systemic lack of oversight in these firms. 

Yes, your statement overreaches greatly; which I suppose is what led you into Marty analogy hour.

It only "overreaches" if you are pathologically dedicated to putting an absurd interpretation on it.

Of course *that* wouldn't describe anyone posting *here* now, would it? 

[garbon]

It only "overreaches" if you are pathologically dedicated to putting an absurd interpretation on it.

Of course *that* wouldn't describe anyone posting *here* now, would it? 

It only overreaches if one doesn't buy into the particular shorthand of a given group.  Sort of the same issue that occurred with Vinnie yesterday when he tried to play the "Republicans are fundamentally opposed to science and education."

I think in a moment where many are out for blood, it's important to remember that not everyone is like that.

[Malthus]

... which goes back to the problems with corporate governance, and why massively bailing the system out without making any substantive changes to it seems to be a losing game.

Which is why I was not a fan of the bailouts to begin with.  Congress et al. are so bad at managing their own affairs that there was no hope of them making appropriate changes to corporations. I think this most recent call for blood is evidence of that.

Well, yes, exactly.

One suspects the howls of outrage will die down, be last week's news, and nothing much will really change.

The outrageous bonuses could be left to market forces - assuming that "market forces" were actually operating, which they are not, because the gov't simply hands over wads of cash. If "market forces" were in play, these guys would be lining up with the other unsecured creditors, not getting fat bonuses.

The fear is that if we let market forces wipe these guys out, the rest of us will be lining up for the soup kitchen right alongside these guys - but that may happen anyway.

[Berkut]

What point are you attempting to make? That some manager somewhere has been competent?

Granted - that's not in dispute; but the massive financial failures could not have happened without a systemic lack of oversight in these firms. 

Yes, your statement overreaches greatly; which I suppose is what led you into Marty analogy hour.

It only "overreaches" if you are pathologically dedicated to putting an absurd interpretation on it.

Of course *that* wouldn't describe anyone posting *here* now, would it? 

Indeed it does - you.

The idea that a retention bonus MUST be irrational, absent any actual evidence one way or the other beyond gross generalizations that are nto relevant to the specifics of the issue, is rather absurd.

[Malthus]

It only "overreaches" if you are pathologically dedicated to putting an absurd interpretation on it.

Of course *that* wouldn't describe anyone posting *here* now, would it? 

It only overreaches if one doesn't buy into the particular shorthand of a given group.  Sort of the same issue that occurred with Vinnie yesterday when he tried to play the "Republicans are fundamentally opposed to science and education."

I think in a moment where many are out for blood, it's important to remember that not everyone is like that.

Pfft. Having a Marty moment of your own?