The banking industry
yellowkid
Posts: 5,486 ✭
Great article in the New Yorker, a lot of which has been brought up here...
Up until the 1980's salaries in the financial industry were on a par with other industries, today they are 60 % more.
When the CDO crisis hit, the bankers had taken a million dollar bond and sold 20 million dollars worth of debt obligation "insurance" on it
If you were to lump all industry profit together, banking used to account for about 1/7 of it. Today it's over 25% (in 06' it was over 1/3)
30% of last years Harvard grads were going into the financial services industry
Eighty cents of the profit that Citibank makes on a dollar comes from selling securities, 14 cents from raising capital for companies
Despite the Frank-Dodd bill, Morgan Stanley, among others is already rebuilding their securitization business. This time they are pooling credit card debt, and auto loan debt , and selling securities tied to the level of exchange rates and stock prices.
Last year Goldman Sachs paid out over 16 billion in compensation, this without coming up with any spectacular new investments, or anything of tangible benefit.
In the first six months of 2010 the big six investment banks cleared over 35 billion in PROFITS, the events of '08 and '09 are old news.
The thesis of the piece is that bankers(investment) are overpaid, and that the banking industry exists to loan capital to the creditworthy, anything else they do produces little or nothing tangible. The author was prompted to write the piece when he became aware that Citibank and it's CEO were to be honored for "advancing the field of asset building in America" he likens it to recognizing, say BP for its contribution to the environment.
But according to some wag on the radio, the gold boom is over. Yeah, no reason to own PM's anymore.
Up until the 1980's salaries in the financial industry were on a par with other industries, today they are 60 % more.
When the CDO crisis hit, the bankers had taken a million dollar bond and sold 20 million dollars worth of debt obligation "insurance" on it
If you were to lump all industry profit together, banking used to account for about 1/7 of it. Today it's over 25% (in 06' it was over 1/3)
30% of last years Harvard grads were going into the financial services industry
Eighty cents of the profit that Citibank makes on a dollar comes from selling securities, 14 cents from raising capital for companies
Despite the Frank-Dodd bill, Morgan Stanley, among others is already rebuilding their securitization business. This time they are pooling credit card debt, and auto loan debt , and selling securities tied to the level of exchange rates and stock prices.
Last year Goldman Sachs paid out over 16 billion in compensation, this without coming up with any spectacular new investments, or anything of tangible benefit.
In the first six months of 2010 the big six investment banks cleared over 35 billion in PROFITS, the events of '08 and '09 are old news.
The thesis of the piece is that bankers(investment) are overpaid, and that the banking industry exists to loan capital to the creditworthy, anything else they do produces little or nothing tangible. The author was prompted to write the piece when he became aware that Citibank and it's CEO were to be honored for "advancing the field of asset building in America" he likens it to recognizing, say BP for its contribution to the environment.
But according to some wag on the radio, the gold boom is over. Yeah, no reason to own PM's anymore.
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$212 TRILL leveraged at 30-1 gives about $7 TRILL at risk. With a similar failure rate to Lehman's that would be a $6.4 TRILL loss....guaranteed by J6P.
roadrunner