The Banking Crisis Reappraised - Bonfire of the "Assholes"

[The Minsky Moment]

I am not very familiar with the Milwaukee-based investment bank RW Baird, but perhaps I should be.  Some quotable lines from today's FT interview of Baird's chairman and CEO, Paul Purcell:

"Greed will reappear. It happens every time. There will always be assholes on Wall Street because the compensation is so high."

"{U}nfortunately 75 per cent of the people in our business are not honest."

"In a polluted work environment – and this is especially true on Wall Street – people end up spending 25-30 per cent of their time positioning internally to make more money. So when you get rid of those people, everyone else focuses on being more productive."
(explaining his bank's "no assholes" hiring policy)

"We're going to get overregulated. It's inevitable. We'll have to spend a lot more time and money on it and they'll send in more 27-year-olds who don't know what they're doing."

"Here's the problem of politics in Washington. First, most banks don't expand lending in the midst of a big global recession. Second, most of these banks got levered 25-30 times and the Federal Reserve has told them they have to delever to 12-15 times. Then you have the politicians saying: 'lend, lend, lend' and the Fed saying: 'you don't have enough capital'"


Full article here: http://www.ft.com/cms/s/0/ec944154-754d-11de-9ed5-00144feabdc0.html?ftcamp=rss

[Jos Theelen]

It seems to me that the problem is not greed, but the fact that we have to bail out those banks to keep the economy running. If we find a way so that all those greedy banks can go broke, the problem wouldn't be so serious.

[swallow]

'In a polluted work environment – and this is especially true on Wall Street – people end up spending 25-30 per cent of their time positioning internally to make more money. So when you get rid of those people, everyone else focuses on being more productive."

I don't think it's just 'productivity' being focussed in the wrong direction, I think that that it's that the ones good at manoevering, who get to run it, may not automatically be good at the job.  Also, the good ones who can't manoever, leave.

[Caliga]

If we find a way so that all those greedy banks can go broke, the problem wouldn't be so serious.

All those greedy banks = all banks. 

[Caliga]

I don't think it's just 'productivity' being focussed in the wrong direction, I think that that it's that the ones good at manoevering, who get to run it, may not automatically be good at the job.

[Valmy]

"Greed will reappear. It happens every time. There will always be assholes on Wall Street because the compensation is so high."

So...does high compensation attract assholes or does it turn people into assholes?  The ultimate debate for philosophers everywhere.

[Caliga]

So...does high compensation attract assholes or does it turn people into assholes?  The ultimate debate for philosophers everywhere.

I think a little bit of both.

[alfred russel]

"We're going to get overregulated. It's inevitable. We'll have to spend a lot more time and money on it and they'll send in more 27-year-olds who don't know what they're doing."

"Here's the problem of politics in Washington. First, most banks don't expand lending in the midst of a big global recession. Second, most of these banks got levered 25-30 times and the Federal Reserve has told them they have to delever to 12-15 times. Then you have the politicians saying: 'lend, lend, lend' and the Fed saying: 'you don't have enough capital'"

All too true.

[Norgy]

Wow, this is Deloitte captured in a few sentences.

I am not that troubled by bankers wanting a lot of money, I am more troubled by those supposedly going to go through their books being human.

[Ed Anger]

I don't think it's just 'productivity' being focussed in the wrong direction, I think that that it's that the ones good at manoevering, who get to run it, may not automatically be good at the job.

Management are gods amongst men. WORSHIP THEM!

[Norgy]

Management would include people like you, me and Caliga. Colour me unimpressed.

[Caliga]

Well, I think I'm pretty good at my actual job duties as well.

Then again, nobody ever thinks that they suck at their job, no matter how bad they actually are.

[Norgy]

You still eat at gas stations, man.

And we're both kinda weirdos doing a job we are definitely not qualified to do. And don't even get me started on Ed.

I mean, me, responsibility? That's asking for trouble.

[Caliga]

And we're both kinda weirdos doing a job we are definitely not qualified to do.

[saskganesh]

I'm a "great" manager. However, administration is not my bag, so prospects are rather limited.