'Men of the Mind' to go on Strike - Atlas Shrugged

[Anaconda]

Quote from Cutten:


"Wall Street" aka the financial sector - "paper" money, money changers etc - is the sole reason that advanced economies are rich and most of the world without a functioning financial sector is not.

That's hilarious. You obviously do not have much experience with investors. Most angel investors HATE Wall Street. And most self-made wealthy individuals avoid dealing with Wall Street, especially if they went through its ranks. In certain emerging industries, they shy away from any Wall Street type.

The real joke is that you actually called this economy "advanced" & "rich". Is the illusion still that hard to see through? Don't worry, in a few years, you won't have a choice.

The whole system is hijacked by credit & the "money changers". Maybe, just maybe, that's the reason you see banks being so vital in the process.

 

[Tide31]

Quote from OldTrader:

i think it's obvious that Rand would not have supported the bailouts. Bailouts have no place in a capitalistic society.

Frankly though your list of "men of the mind" is amusing. Both Soros and Buffet are ultra liberal, big government proponents. Rand on the other hand thought that government had limited purpose, like national defense for instance.

An example of "men of the mind" would be John Allison IV, Chairman and CEO of BB&T, the 14th largest financial holding company in the US. Interestly he sent a letter to every Congressman and Senator during the TARP hearings, against TARP. He claims that Atlas Shrugged is the best defense of capitalism ever written, and requires all senior executives of his company to read it.

OldTrader

This was more my point of this thread. There are two sides and I don't think both sides are being heard today. People such as Dick Armey on CNBC today are saying they are frightened to death for capitalism with massive government and redistribution of weath. Obama on 60 minutes last night said something about bankers going to Arkasas and seeing what people make there at fast food places. This is frightening.

All the big derivative traders and their books and all the prop traders on Wall St. are gone. So is 70-80% of Goldman's juice from these revenues. Whether it was right or wrong to promote these traders books is now irrelevant. What you have left are the plain vanilla bankers, salesmen and traders along with commercial bankers. They are being punished for their former colleagues misdeeds. If you have a group of a trader an assistant and two salesman that bring in $25mm in revenue because of their talent and network of relationships, they need to get paid. Supposing it's $2mm, $150k, $1mm and $1mm respectively. Throw in another $3mm in costs for space, computers, back office, research dept, etc... Thats a business with a 70% operating margin. There are no interest charges for this business which used to be 90% of Goldmans annual 'costs' with old business model. If you say that the trader cannot make that much money, then he will leave. His replacements with no experience and no contacts will make a fraction of this as will the bottom line of the bank. Why does ARod make$23mm/yr? Because its a different model which is substantiated by the bottom line.

Obama, Congress et. al. don't see this. The power in the old line model these banks have all gone back to is being pulled out from under them. The 'product' that these banks offer, their 'franchise', is the talent of it's people, whether it is an investment banker, salesman, or trader.

 

[Tide31]

Quote from lolatBushites:

I love it when people place Ayn Rands nonsensical ramblings on par with the Gospels.

Ayn Rands religion is the opposite face of the Communist Idealist coin. The core assumption of both theology is the same. That individuals are motivated by a pure higher ethics.

The reality is Greed is at the core of capitalistic ethos. Greed drives innovation. The end result of any pure capitalistic system is rule by Oligarchy protecting moribund monopolies.

Forget the bitch that wrote the book, are we truly free in a society where there is forced equality and control in acquiring material possessions and resources?

Is innovation a bad thing? Did voters really envision marxist theory being our utopian solution?

 

[AAAintheBeltway]

Quote from Tide31:

This was more my point of this thread. There are two sides and I don't think both sides are being heard today. People such as Dick Armey on CNBC today are saying they are frightened to death for capitalism with massive government and redistribution of weath. Obama on 60 minutes last night said something about bankers going to Arkasas and seeing what people make there at fast food places. This is frightening.

All the big derivative traders and their books and all the prop traders on Wall St. are gone. So is 70-80% of Goldman's juice from these revenues. Whether it was right or wrong to promote these traders books is now irrelevant. What you have left are the plain vanilla bankers, salesmen and traders along with commercial bankers. They are being punished for their former colleagues misdeeds. If you have a group of a trader an assistant and two salesman that bring in $25mm in revenue because of their talent and network of relationships, they need to get paid. Supposing it's $2mm, $150k, $1mm and $1mm respectively. Throw in another $3mm in costs for space, computers, back office, research dept, etc... Thats a business with a 70% operating margin. There are no interest charges for this business which used to be 90% of Goldmans annual 'costs' with old business model. If you say that the trader cannot make that much money, then he will leave. His replacements with no experience and no contacts will make a fraction of this as will the bottom line of the bank. Why does ARod make$23mm/yr? Because its a different model which is substantiated by the bottom line.

Obama, Congress et. al. don't see this. The power in the old line model these banks have all gone back to is being pulled out from under them. The 'product' that these banks offer, their 'franchise', is the talent of it's people, whether it is an investment banker, salesman, or trader.

I'm somewhat sympathetic to your viewpoint, but I think the anger is over huge bonuses being paid to people in firms that were bailed out by the taxpayers. No bailout, no company, no bonus. That is pretty straighforward, and ordinary people cna easily see it.

As for the supposed value added by financial sector employees, I have to agree with Doug Kass that it tends to be wildly overstated. Most of it is the result of using the company's balance sheet, its order flow or its name to attract business. The individual bankers tend to be pretty replaceable. We need only look at the serial blowups by their hedge funds and the fact that most needed bailouts to see the truth of this. The compensation structure at these firms is a disgrace, considering they are publicly held companies. If they want to remain private, fine, send all the profits out the door as compensation and I have no complaints. When you go public, your duty is not to the employees but to the shareholders. It's doubly ironic that firms that specialize in corp finance thumbed their noses at this elementary concept.

 

[walter4]

Quote from jonnyy40:

I agree with Mithos and so would Rand.The Bankers are Looters,using the 'Federal' Reserve Bank to enable their schemes.

Agreed.

 

[Tide31]

Actually none of this will matter. One of the reasons for Friday's selloff in the banks was that it is widely expected that they will race to do secondaries to pay down the TARP funds and be done with the goverment. Today's rally is playing right into their hands. Not that the Senate will pass or Obama will sign Barney Frank's bill, but why take the chance.

GS only needs to raise $4bil to get under the $5bil limit. Expected headline: "GS 40mm Share Spot Secondary". One days volume, and they for one are done with it.

 

[Tide31]

Sorry, I was wrong a little while ago. Looks like they'll just do this:


(MarketWatch) -- GS
Last: 110.90 +13.58 +13.95%
4:59pm 03/23/2009

Goldman Sachs is considering selling a part of its 4.9% stake in Industrial & Commercial Bank of China to raise funds, the Wall Street Journal reported in its online edition Monday, citing people familiar with the matter. Goldman is likely to use proceeds from the sale to repay some of the $10 billion in capital it received from the U.S. government last year, the newspaper said.