Why no one is willing to say wall street is overpaid

[marvenger]

The lack of market ideology here is a breath of fresh air.

http://www.nakedcapitalism.com/2010/...-overpaid.html

Yves here. In other words, given the inability of bankers to avoid crises, this destructive pattern will continue until the banks break their backers, meaning the state, or we find a way to stop the game. Loudly contesting the idea that the pay levels at the major capital markets players are in any way warranted is part of the process of bringing the industry to heel.

Marvenger here: In other words you need to break the market ideology, that's how you deal with some forms of unintended consequences.

[cjppjc]

Re: Why no one is willing to say wall street is overpaid

Perhaps a new relationship to compensation, to money in general is comming.

Why do ye spend money for that which is
not bread? And your labor for that which
satisfieth not? Hearken diligently unto
me, and eat that which is good, and let
your soul delight itself in fatness.

Isaiah 55:2

http://www.amazon.com/Magic-Money-Or...7176008&sr=1-3

[marvenger]

Re: Why no one is willing to say wall street is overpaid

How much can one man be worth more another? Don't know if anyone saw the Italy v NZ game in the world cup. When Italy brought on a sub, the guy was worth 20m or something in the transfer market. At the same time NZ sub, Andy Baron, was brought on who is an amateur and works as a bank teller. The whole Italian side was worth something like 250m and the kiwi side about 15m. Who knows how they did it, but the kiwis drew 1-1 after a pathetic dive by an Italian worth 50m earned the Italians a penalty and their lone goal. Hey a market is a market I guess, no matter how stupid, but when it significantly affects people lives - big business - people should let go of the ideology.

I reckon there's reason enough to cap inequality at some level. Reasons for wealth inequality may be that some like material things more than others and should be able to work for it, some are more productive, and it does have motivational uses. But there's no reason that some should be worth hundreds times more than others, it makes no sense, or it makes less sense than an arbitrary cap.

Allowing the few with a massive sense of entitlement to game the system seems to make many of the rest of us have to play more by their rules than we'd like. So cjppc i'm not sure how you allow more room for those motivations that can let your soul delight itself in fatness without those with less a sense of massive entitlement from imposing themselves more. I know you like the idea of relying on yourself and not being affected by surroundings and so does Krishnamurti who we both respect, but Krishnamurti also said despite you only needing to have access to one leaf in a concrete cell to achieve enlightenment it is much easier if you live in a beautiful garden and that society should try to create the beautiful garden.

There will be mistakes everythng has unintended consequences, I'm just sick of most people bearing the brunt of unintended - and intended - consequences of the elite who often suffer little of them themselves and most people just accept this as the natural order of things. It used to be the god-like kings who were the natural powers, now it the god like market. Most people just need to stand up and say the elite are worth less and they are worth more. People need to support each other instead of fighting over the scraps.

[chr5648]

Re: Why no one is willing to say wall street is overpaid

How much can one man be worth more another? Don't know if anyone saw the Italy v NZ game in the world cup. When Italy brought on a sub, the guy was worth 20m or something in the transfer market. At the same time NZ sub, Andy Baron, was brought on who is an amateur and works as a bank teller. The whole Italian side was worth something like 250m and the kiwi side about 15m. Who knows how they did it, but the kiwis drew 1-1 after a pathetic dive by an Italian worth 50m earned the Italians a penalty and their lone goal. Hey a market is a market I guess, no matter how stupid, but when it significantly affects people lives - big business - people should let go of the ideology.

I reckon there's reason enough to cap inequality at some level. Reasons for wealth inequality may be that some like material things more than others and should be able to work for it, some are more productive, and it does have motivational uses. But there's no reason that some should be worth hundreds times more than others, it makes no sense, or it makes less sense than an arbitrary cap.

Allowing the few with a massive sense of entitlement to game the system seems to make many of the rest of us have to play more by their rules than we'd like. So cjppc i'm not sure how you allow more room for those motivations that can let your soul delight itself in fatness without those with less a sense of massive entitlement from imposing themselves more. I know you like the idea of relying on yourself and not being affected by surroundings and so does Krishnamurti who we both respect, but Krishnamurti also said despite you only needing to have access to one leaf in a concrete cell to achieve enlightenment it is much easier if you live in a beautiful garden and that society should try to create the beautiful garden.

There will be mistakes everythng has unintended consequences, I'm just sick of most people bearing the brunt of unintended - and intended - consequences of the elite who often suffer little of them themselves and most people just accept this as the natural order of things. It used to be the god-like kings who were the natural powers, now it the god like market. Most people just need to stand up and say the elite are worth less and they are worth more. People need to support each other instead of fighting over the scraps.

Whats really funny is that there is very little evidence from the attempts to cap inequality, that they have worked. If anything, the so called attempts at equality, have failed miserably, as can be seen by the data from unemployment, tax collections, food stamps, income, and bitching and moaning on this board.

Most likely, the current system is the best humanity can do.

[thriftyandboringinohio]

Re: Why no one is willing to say wall street is overpaid

A similar and related sentiment from Market Watch:

June 22, 2010, 12:01 a.m. EDT
Wall Street's Invisible Gorilla is killing America's Soul

Commentary: Why millions of Main Street investors cannot see they're destroying capitalism

By Paul B. Farrell , MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) -- On Lake Wobegon "all the women are strong, all the men are good-looking and all the children are above average" says the great American satirist Garrison Keillor in his "Prairie Home Companion" world.

But doesn't that also describe all the too-greedy-to-fail fatheads running Wall Street? And, unfortunately, Main Street America's 95 million irrational and self-sabotaging investors?

Yes, all of us! We're Americans. Don't confuse us with the facts, with reality. We're the greatest in history, a legend in our own minds. And a rapidly mutating virus is spreading this lethal pandemic far beyond the shores of Lake Wobegon. Yes, folks, the "Lake Wobegon Effect" is hard-wired in America's brain, an illusion of superiority, a smug arrogance where each knows we are the best, the chosen ones.

Warning: The Lake Wobegon Effect is the single best summary of today's stock market psychology, high-frequency trading, behavioral economics theories and the new science of irrationality ... and it's sucking the life out of America's soul. Here, listen to more of these arrogant musings surfacing everywhere from deep in our collective brains:

All Wall Street bankers are worth 100 times any Main Street investor
All Corporate American CEOs deserve to make 400 times their workers
All children of all Forbes 400 billionaires deserve to inherit tax-free
All lobbyists deserve millions when winning billions for special interests
All taxpayers should pay for catastrophic mistakes of Wall Street Fat Cats
All rich hedge fund managers deserve to be taxed at capital gains rates
All senators deserve to become millionaire lobbyists when they retire
And Goldman Sachs CEO Lloyd Blankfein deserves a $100 million bonus

This is America's collective brain buzzing along at hyperspeed. This is the toxic irrationality driving America in the 21st Century ... and it really is destroying our soul from within. Seriously, look outside the isolation bubble you live in. Ask why so many other American brains are on autopilot, guided by what Yale psychologist Dr. Paul Bloom humorously calls the Lake Wobegon Effect in his New York Times review of "The Invisible Gorilla" by psychologists Christopher Chabris and Daniel Simon:

The Invisible Gorilla is "one of the most famous psychological demos ever. Subjects are shown a video, about a minute long, of two teams, one in white shirts, the other in black shirts, moving around and passing basketballs to one another. They are asked to count the number of aerial and bounce passes made by the team wearing white, a seemingly simple task."
Stop. Test yourself before you read on. What does "The Invisible Gorilla" study tell you about the brains of folks gambling in Wall Street's casinos? Where billions of shares, trillions of dollars, stocks, bonds, derivatives trade daily? What's "invisible" to you?

Stop again. Look closely: Not just in the brains of Main Street's 95 million investors. We know we're irrational and easily manipulated. But our leaders too? All our Wall Street CEOs, brokers, high-frequency traders ... all our government bureaucrats, policy wonks, congressional committee heads ... all our pension fund bosses, mortgage lenders, central banks policy makers ... and all the other global players playing games with derivatives in the $670 trillion unregulated global shadow banking casino that's avoiding real reform?


The investor's brain is a very bad computer
Years ago America's leading behavioral economist, Richard Thaler warned: "Think of the human brain as a personal computer with a very slow processor and a memory system that is small and unreliable ... the PC I carry between my ears has more disk failures than I care to think about." And it ages badly.

Factor the Lake Wobegon Effect and the Invisible Gorilla into your computer. What do they tell you about the impact of billions of irrational decisions made by all gamblers betting at Wall Street's 24/7 global casino?

Here are four irrational clues: Remember, between 2000 and 2010 Wall Street lost 20% of your retirement playing the stock market ... Still Wall Street pocketed hundreds of billions for themselves ... Still those fat cats off-loaded trillions of debt on taxpayers when in de facto bankruptcy in 2008 ... and yet our brains let them get away with it.

The conclusion is obvious: The average investor's brain is so irrational it is totally inadequate as a tool in evaluating market trends, cycles and patterns, in picking stocks, and in judging the value of so-called expert advice we get from self-interested bankers, advisers and cable pundits ... and yet, paradoxically, like alcoholics, coke addicts and gamblers, we cannot stop. Crazy but true. Listen as Dr. Bloom continues:

"Halfway through the video, a woman wearing a full-body gorilla suit walks slowly to the middle of the screen, pounds her chest, and then walks out of the frame. If you are just watching the video, it's the most obvious thing in the world. But when asked to count the passes, about half the people miss it." (Translation: Same happens when you're counting passes in the stock market; you miss not only the obvious but the secret stuff Wall Street's Invisible Gorillas are purposely hiding)

Only half? No, my friends, it's far worse. In Bloom's own studies "63% of Americans consider themselves more intelligent than the average American, a statistical impossibility. In a different survey, 70% of Canadians said they considered themselves smarter than the average Canadian." But when it comes to financial markets, its closer to 100%, for both little "gamblers" and the big "casino owners."

Wall Street's Invisible Gorillas really are stealing America blind
Want more proof? Remember the studies by University of California behavioral finance professors Terrance Odean and Brad Barber: They researched the trading behavior of 65,000 American investors. Also all investors trading on the Taiwan Stock Exchange. Their conclusion: "The more you trade the less you earn." 77% of Americans were losers. 82% of Chinese investors were losers. And still: Their brains are so irrational, so addicted, they can't stop, just keep going back.

Yes, investors are stuck with addictive Loser Brains. Even confronted with the facts investors continue in denial, victims of the Lake Wobegon Effect, refusing to learn the lessons of the Invisible Gorilla. Bloom concludes:

"When you direct your mental spotlight to the basketball passes, it leaves the rest of the world in darkness ... Even when you are looking straight at the gorilla (and other experiments find that people who miss it often have their eyes fully on it) you frequently don't see it, because it's not what you're looking for."

Get it? Your brain is wired to make bad decisions. Wired to make them over and over. Wired to miss crucial data. And this has a cumulative and collective effect that drives markets to the edge of a precipice with such powerful momentum that we're blinded by euphoria, never see the Invisible Gorilla, the Black Swan, the WMD ... never see the risks until it's too late, a catastrophe happens and the invisible becomes painfully visible, tragically blowing up in our faces

Sound familiar? It did happen in 2008 forcing former Fed Chairman Alan Greenspan to admit to a congressional committee: "I found a flaw ... I made a mistake." Actually Mr. Greenspan you were a miserable maestro. For 18 years the mistakes your irrational brain made blinded you to an invisible Reaganomics Gorilla that's still destroying America.

Treasury Secretary Henry Paulson was even worse, later reluctantly admitted he should "have seen the subprime crisis coming earlier." But it turns out he's a liar and con man. Yes, later Bloomberg News reported Paulson not only saw the Invisible Gorilla, he warned Bush's staff at Camp David in 2006, two years before the meltdown. But then the Lake Wobegon Effect kicked in, our leaders all ignored the warnings until the 2008 crash.

Wall Street has no soul, is drowning America in Lake Wobegon
The irrational brains of our leaders are so self-destructive they let bubbles blow and blow ... they will always fail to act early enough ... they are trapped in their greedy brains in denial ... trapped in their narrow ideologies ... trapped, making endless stupid decisions ... ignoring the obvious ... they will let risks become increasing more deadly till minor pops becomes colossal WMD-category meltdowns, crashes, collapses of epic catastrophic proportions, worse than the estimated $23.7 trillion aftermath of the 2008 meltdown ... and another is dead ahead.

Yes, tragically many more are coming because Wall Street is morally dead, it has no conscience, no soul, no ethics, no moral values other than getting as rich as possible, as fast as possible. Tragically, Wall Street is now the Invisible Hand of Capitalism 4.0. Tragically, Wall Street's believes the best economy is an unregulated free-market system where the collective greed of the biggest players best serves the public good.

Yes, tragically for future generations of Americans the guidance system of capitalism's Invisible Hand has been replaced by the guiding hand of Wall Street: With no public conscience, no soul, no ethics, no moral values, nothing other than the addict's obsession to get as rich as possible, fast as possible.

And tragically, Main Street America is trapped with them in the Lake Wobegon Effect. Tragically, the Invisible Gorilla will strike again, soon, and again, and again exploding into visibility ... until our rude awakening.

[Slimprofits]

Re: Why no one is willing to say wall street is overpaid

Why no one is willing to say wall street is overpaid

Because their afraid, yes afraid (it's pathetic) of being called Commies by Republican party cheerleaders.

[Kcim67]

Re: Why no one is willing to say wall street is overpaid

Whats really funny is that there is very little evidence from the attempts to cap inequality, that they have worked. If anything, the so called attempts at equality, have failed miserably, as can be seen by the data from unemployment, tax collections, food stamps, income, and bitching and moaning on this board.

Most likely, the current system is the best humanity can do.

What worth a degree at Harvard or at Yale, Oxford, Cambridge or maybe Chicago. History is written as they say by the victors and the ruling elite of Old Europe and their New World offspring have been writing economic history for the last 100 yrs.
The dogma taught in these so called places of learning is written by the few for the benefit of the few, who chose the data you so readily believe to justify the myths they're so eager to perpetuate.
As in the past they will not volunteer to relinquish even a small part of what they have stolen and therefore no option will be left for it to be taken forcibly, it will happen, maybe not this year or next but sooner or later redress will be sought by the true democratic majority!

[thriftyandboringinohio]

Re: Why no one is willing to say wall street is overpaid

Whats really funny is that there is very little evidence from the attempts to cap inequality, that they have worked. If anything, the so called attempts at equality, have failed miserably, as can be seen by the data from unemployment, tax collections, food stamps, income, and bitching and moaning on this board.

Most likely, the current system is the best humanity can do.

Rather a defeatist attitude.

Humanity has several big, important, intractable problems that we haven't yet solved. Still, we keep working at them and have every reason to expect progress.

I'm unwilling to accept going back to a small hereditary aristocracy lording over a vast population of serfs (though we have been sliding back in that direction the last few years)

[cjppjc]

Re: Why no one is willing to say wall street is overpaid

How much can one man be worth more another?

I'm just sick of most people bearing the brunt of unintended - and intended - consequences of the elite

A good question. Also the question of how much money is enough? What is enough for a given purpose or life? These questions I think will gain relevance as we move forward. I hope people don't lecture about it, just think about the questions. How do I react to a money situation? How have I influenced my children to react to a money situation. I linked to a good book that is hard to find regarding the esoteric history of money. Here is another. The beginning and end are great. The middle so so. An introduction to a very sucessful businessman and an interview with him at the end. A man dare I say on a par with Krishnamurti, but more grounded in the real word.

http://www.amazon.com/Money-Meaning-...ion/0385262426


It is more than obvious you are sick of the inequality you feel exists today. I said somewhere else here, it is possible that man is progressing in the only way possible. In the future who knows. Use your energy for your own self awareness and betterment. The odds for real change are greater.

[marvenger]

Re: Why no one is willing to say wall street is overpaid

It is more than obvious you are sick of the inequality you feel exists today. I said somewhere else here, it is possible that man is progressing in the only way possible. In the future who knows. Use your energy for your own self awareness and betterment. The odds for real change are greater.

I'm concerned for the effects of inequality. You may be right that this is just the way that man has to progress, however, me personally, I would not progress the way we are progressing. The more I'm aware of myself the more i'm convinced that the powers that be are chasing goals that they do not understand the consequences of, they see and understand the immediate dynamics of how to get ahead well but don't understand where it is taking them; or they can also be just nihilistic and say well this is the way the world is and i'm going to play the game. Repeat and repeat getting their power based dopamine hit. As you strive to become more aware, I think you should also express how you see the world. I hope that this is the reality of my energies.

[chr5648]

Re: Why no one is willing to say wall street is overpaid

Rather a defeatist attitude.

More like seeing reality for what it really is and not some lala land utopia that everyone yearns for.

Humanity has several big, important, intractable problems that we haven't yet solved. Still, we keep working at them and have every reason to expect progress.

Most of societies ills and problems come from the left/right ideology/paradigm. The solutions paraded around also manifest themselves in the left/right paradigm. How can anything be fixed or moved forward if we use the same cognitive patterns that got us into this mess?

[Jay]

Re: Why no one is willing to say wall street is overpaid

More like seeing reality for what it really is and not some lala land utopia that everyone yearns for.



Most of societies ills and problems come from the left/right ideology/paradigm. The solutions paraded around also manifest themselves in the left/right paradigm. How can anything be fixed or moved forward if we use the same cognitive patterns that got us into this mess?

Because that's the joke! Left or right isn't the question! Societies problems come from focusing on left vs. right and missing the gorilla because of it. Look up and down. They got this game figgered.

[WildspitzE]

Re: Why no one is willing to say wall street is overpaid

Left or right isn't the question!

It's most definitely not, but it certainly is part of a general strategy. It's called: divide and conquer.

The whole "equality" rouse is also part of the strategy, and it's applied through "class warfare".