Quote from Tide31:
Without taking sides on the issue, because I am now a daytrader and proud of it, I will say this which I haven't really heard said well yet, but I'm sure we'll see it somewhere in the press tomorrow.
Wall St.'s high paid bankers/traders are the second highest cost for these firms. If you look at any company's Income Statement it will show revenue then cost of goods/service below. This is mainly salary and the cost of producing your product. IBM will show something like 100B rev and 70B cost. 30B EBITDA. Look at any bank or what used to be brokerage, say GS, and it will show 50B rev and 6B cost. 44B EBITDA. (GS biggest cost would be 30B+ in interest paid). Point being: Different formula for these types of firms. Their biggest cost obviously is their cost of balance sheet, but their cost of goods is the ability of their people to produce revenues. 'Intellectual Assets' that produce these 'normally/historically' huge rev's. We are all out on a 'witch hunt' to 'get' firms that pay out about 10% of revenues in salary to those responsible for them. (hedge funds pay out 20% of revenues, which is why these guys leave WS to go there). You go on Yahoo financial and see that most firms pay out 75%+ for their cost of goods. Yes, its good work if you can get it, but we are talking about apples and oranges here with the way these firms operate. This is why the 'smartest' folks from Stanford/Harvard/Yale etc... go to Wall St. right? Obama smart guy no doubt, he knows this, but is playing the popular opinion thing. Is he misleading the public for popularity? He says that bonus payouts are 'disgusting' or something. Bet his classmates from Columbia and Harvard are not too happy with today's events, he needs to realize soon that the election is over.
Just food for thought.
