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
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.
'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.
Quote from: Jos Theelen on July 21, 2009, 08:58:13 AM
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. :cool:
Quote from: swallow on July 21, 2009, 09:04:54 AM
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.
:yes:
Quote"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.
Quote from: Valmy on July 21, 2009, 09:12:04 AM
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.
Quote from: The Minsky Moment on July 21, 2009, 08:47:45 AM
"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.
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.
Quote from: Caliga on July 21, 2009, 09:06:55 AM
Quote from: swallow on July 21, 2009, 09:04:54 AM
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.
:yes:
Management are gods amongst men. WORSHIP THEM!
Management would include people like you, me and Caliga. Colour me unimpressed.
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.
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.
Quote from: Norgy on July 21, 2009, 09:25:56 AM
And we're both kinda weirdos doing a job we are definitely not qualified to do.
:blink:
I'm a "great" manager. However, administration is not my bag, so prospects are rather limited.
Quote from: Jos Theelen on July 21, 2009, 08:58:13 AM
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.
I agree, I think that's the main goal. Make it so that banks can indeed fail, because otherwise lemon socialism is the worst of both worlds. Bernanke has said the same thing, so hopefully he'll do something in that direction.
Quote from: Norgy on July 21, 2009, 09:25:56 AM
And don't even get me started on Ed.
:D
I would have been an excellent cog in the nazi machine. Stamp this, shuffle that. Scream at underlings.
Easy peasy.
Quote from: Ed Anger on July 21, 2009, 09:44:39 AM
I would have been an excellent cog in the nazi machine. Stamp this, shuffle that. Scream at underlings.
Easy peasy.
Well, you have plenty of practice with "VERE ISHT STEINER!!!11111111oneoneone" :hug:
Quote from: Caliga on July 21, 2009, 09:48:47 AM
Well, you have plenty of practice with "VERE ISHT STEINER!!!11111111oneoneone" :hug:
Mein Fuehrer...Steiner....Steiner got you banned from X-Box live.
Quote from: Valmy on July 21, 2009, 09:52:53 AM
Quote from: Caliga on July 21, 2009, 09:48:47 AM
Well, you have plenty of practice with "VERE ISHT STEINER!!!11111111oneoneone" :hug:
Mein Fuehrer...Steiner....Steiner got you banned from X-Box live.
I kinda liked the recent "Mein Fuehrer... Jacko... Jacko has died. He cannot do your birthday concert" one.
Now you get me all worked up to Dr. Merkwurdigliebe again. :mad:
Quote from: Caliga on July 21, 2009, 09:06:25 AM
Quote from: Jos Theelen on July 21, 2009, 08:58:13 AM
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. :cool:
Suppose we forbid banks to become big (max capital or some other regulation). Then I have no problem when they become greedy. If they fail they are out, and we won't miss them.
Quote from: Norgy on July 21, 2009, 10:05:17 AM
Now you get me all worked up to Dr. Merkwurdigliebe again. :mad:
Why :mad:? Its worth watching many, many times.
Quote from: Norgy on July 21, 2009, 09:20:28 AMManagement would include people like you, me and Caliga. Colour me unimpressed.
I'm a fantastic manager.
Fortunately for the massively bureaucratic and dyfunctional organizational culture I operate in, the fact that I am efficient, direct and possess little tolerance for their bullshit when it comes to getting shit done means that I will either A) eventually stroke out, or B) quit.
Quote from: Jos Theelen on July 21, 2009, 02:42:53 PM
Suppose we forbid banks to become big (max capital or some other regulation). Then I have no problem when they become greedy. If they fail they are out, and we won't miss them.
Lochner Doctrine: http://en.wikipedia.org/wiki/Lochner_v._New_York (http://en.wikipedia.org/wiki/Lochner_v._New_York)
I'm in general agreement, though. Neither the size nor the corporate culture alone are the problem; if we were going to cap anything, I'd suggest capping hedging- Goldman Sachs was supposedly hedged, but there's a huge argument running as to whether they could have ever backed up the claim without government assistance.
FDIC's insurability limit seems to have helped stabilize retail operations for banks, so while the financial whizzes might be irked at the loss of one more way to make copious amounts of money, I don't see why we wouldn't get a similar effect from the CFTC capping hedging agreements.
Quote from: Jos Theelen on July 21, 2009, 02:42:53 PM
Suppose we forbid banks to become big (max capital or some other regulation). Then I have no problem when they become greedy. If they fail they are out, and we won't miss them.
Anything you try will end up hurting the people you're trying to protect :)
Quote from: DontSayBanana on July 21, 2009, 10:20:42 PM
Quote from: Jos Theelen on July 21, 2009, 02:42:53 PM
Suppose we forbid banks to become big (max capital or some other regulation). Then I have no problem when they become greedy. If they fail they are out, and we won't miss them.
Lochner Doctrine: http://en.wikipedia.org/wiki/Lochner_v._New_York (http://en.wikipedia.org/wiki/Lochner_v._New_York)
I'm in general agreement, though. Neither the size nor the corporate culture alone are the problem; if we were going to cap anything, I'd suggest capping hedging- Goldman Sachs was supposedly hedged, but there's a huge argument running as to whether they could have ever backed up the claim without government assistance.
FDIC's insurability limit seems to have helped stabilize retail operations for banks, so while the financial whizzes might be irked at the loss of one more way to make copious amounts of money, I don't see why we wouldn't get a similar effect from the CFTC capping hedging agreements.
That's OK to me, as long as we create banks that can go broke. I am not sure your proposal does that, but if it does it, great idea.