Monday, January 03, 2011

Finance Funnies

From Frank Rich:
"It’s a measure of how rapidly our economic order has shifted that nearly a quarter of the 400 wealthiest people in America on this year’s Forbes list make their fortunes from financial services, more than three times as many as in the first Forbes 400 in 1982. Many of America’s best young minds now invent derivatives, not Disneylands, because that’s where the action has been, and still is, two years after the crash. In 2010, our system incentivizes high-stakes gambling — “this business of securitizing things that didn’t even exist in the first place,” as Calvin Trillin memorably wrote last year — rather than the rebooting and rebuilding of America.
That's as close an answer as I've found for my question "How many in the top 2% of wage earners work in the finance industry?" The Forbes list counts accumulated wealth, not how much one makes in a year, so I imagine that top 2% is even more chock full of finance industry folks. You know, the industry that shat in its pants and spread it all over...us. Screw them. I see folks who bought moderate houses at the peak and are now tens of thousands of dollars in debt, underwater in their homes. I'd like to take some finance executives' clearly unearned bonuses and fix this situation...
" companies that actually make things (and at times innovative things) have been devalued, looted or destroyed by a financial industry whose biggest innovation in 20 years, in the verdict of the former Fed chairman Paul Volcker, has been the cash machine."
And the cash machine.... they're making a mint on this, too! They got to fire half the tellers in America, and they charge $3-$10 per transaction if you can't find "your" bank machine. Sometimes I think the best solution is a money mattress, like this one the new head of BOA uses:

Update: I just have to add in here the article by Sarah Anderson ("Bankers' Pay Still Skyrocketing, as Wall Street's Casino Rolls On"), where she talks about a TV appearance she made back in '07:
"...my head bitten off for criticizing Countrywide Financial CEO Angelo Mozilo on the CNBC show Squawk Box.

My offense? I questioned whether Mozilo really deserved to be the sixth-highest paid CEO in the country, given that the company's sub-prime mortgages were already showing clear signs of toxicity, with skyrocketing foreclosure rates.

Suddenly I had show host Carl Quintanilla and the other guests, including David John of the Heritage Foundation, shouting me down, saying that Mozilo had built the company from nothing and shareholders should be happy to give him every penny of his $42.9 million in compensation.

Looking back, it's hard to find a clearer example of the business press blindly glorifying highly paid CEOs. As we all know today, Mozilo's reckless subprime adventures were a disaster for the company and the country. Four months after that CNBC show, Countrywide no longer existed."
Now BOA owns Countrywide.