posted on Jun, 28 2010 @ 10:16 AM
Here we go again. As predicted, when the banks melted down, many top bankers, not wanting to work under massive scrutiny and what would certainly be
significantly lower pay just took some time off. Now that the market looks to rebound firms are fighting over top talent.
The weakness of the "pay czar" is going to be clearly demonstrated with some of these gents getting $8M guaranteed bonuses and fringe benefits like
use of private jets.
Wall Street loves government regulations. 2000 page bills create more loopholes that bankers can exploit to generate massive profits and hence
All the bluster from the government, republicans and democrats is just that. Pass a massive bill that looks impressive ("well they must be hammering
the bankers since the bill is 2000 pages") but in reality does nothing is just a smoke screen.
What is needed are simple regulations that are focused on transparency. Simple, difficult to exploit and easy to understand. Of course, that is
exactly what the government and Wall Street are not interested in.
Some of the easiest components of regulatory reform have been purposefully ignored in this legislation, such as fixing Fannie and Freddy and cleaning
up the conflict of interest mess associated with the ratings agencys.
More of the same.
Top bankers are extremely competetive people. When you create a situation where there are unlimited sums of money to be made and place highly
competetive people in the game, schemes will be devised and the envelope will be constantly pushed.
Get ready for a whole new basket of instruments that will be used to generate fees. This time they will be instruments which hedge against what will
be significantly higher interest rates, essentially selling the dollar short.
Somewhere in a corner office in lower Manhattan there is some Harvard MBA designing the next CDO. Be about two/three years before that blows up.
(visit the link for the full news article)