Open thread June 7, 2016 Dan Crawford | June 7, 2016 7:23 am Tags: open thread Comments (10) | Digg Facebook Twitter |
LA times put up an interesting interactive map that lets you see where Bernie’s money is coming from. http://www.latimes.com/projects/la-na-pol-sanders-donors/
Apparently me and the husband ponied up quite a bit of the dough in our sparsely populated deep red part of TX.
And just to clarify, probably should have typed “are ponying” in the present tense. We haven’t halted our monthly contributions nor do we plan to until he abandons his campaign.
Last night’s presumption by the AP et. al. damn near made me send him a bonus. I still might depending on how the day plays out.
When Finance Becomes Self-Referential
” The utility of financial innovation is measured by the degree to which it advances the goals of making payments, allocating capital, managing personal finances and handling risk. Most people who work in finance are concerned with the first two of these functions. They operate the payments system, they help households with their personal finances. They are not aspiring Masters of the Universe. Mostly, they earn modest salaries. Half of the employees of Barclays Bank earn less than £25,000 ($40,000) per year. But Barclays also employs 530 “code staff” – people with executive functions – who earn an average of £1.3m each, and there are 1443 who earn more than £500,000 ($800,000). It is likely that “the one per cent” in Barclays Bank earn a total approaching half of the total wage and salary bill of the bank. Most of these people are employed in wholesale rather than retail finance. Their activities relate mainly to the other objectives of the financial system – capital allocation and risk management. ”
” But very little of the expertise that exists in the finance industry today relates to the facilitation of payments, the provision of housing, the management of large construction projects, the needs of the elderly or the nurturing of small businesses. The process of financial intermediation has become an end in itself. The expertise that is valued is understanding of the activities of other financial intermediaries. That expertise is devoted not to the creation of new assets, but to the rearrangement of those that already exist. High salaries and bonuses are awarded not for fine appreciation of the needs of users of financial services, but for outwitting competing market participants. In the most extreme manifestation of a sector which has lost sight of its purposes, some of the finest mathematical and scientific minds on the planet are employed to devise algorithms for computerised trading in securities which exploit the weaknesses of other algorithms for computerised trading in securities. … “
. That expertise is devoted not to the creation of new assets, but to the rearrangement of those that already exist.
Today on The Diane Rehm Show, the question arose about business investment in new plants and equipment, etc. David Leonhardt and Jim Tankersley were two of the panelists. The usual “uncertainty” was tossed about, but no one mentioned how often companies expand by buying other companies. Wall St. loves this M&A activity, since they are money makers for investment banks.
But these kinds of deals (correct me if I’m wrong) do little to help the economy of anyone BUT Wall St. and the shareholders. Workers are always laid off in the newly acquired company, as the new parent company absorbs the physical assets and market share of their purchase. How is this helpful to the overall economy?
Another question arose over the latest jobs report: Do HlB visa holders get counted as employed in these reports? Again, none of the panelists touched the fact that H1B visa holders almost always displace American workers and usually at lower wages. I know several code writers who have had to train their Indian replacements, who then got half to 2/3 the salary of the American worker. Jim Tankersley’s comment was how Silicon Valley is pressing Congress to increase the number of H1B visas available. Well, no wonder! Why wouldn’t they want a trained workforce for half the salary? Especially since the ‘savings’ somehow always find their way to the top levels of management and to shareholders. Gotta keep those shareholders happy, don’t we?
Pfzier typically does this with companies which are introducing new product and takes the R&D write-off.
excuse me, i really know nothing about this. but i am glad to see the experts saying something i said years ago about SS “reducing savings.”
i said that’s not true. there is already more “savings” than the market for productive investment can absorb.
The speech by Bernie Sanders tonight at 10 PM is the most important speech for the progressive movement in the US in more than half a century.
He can take his position(and positions)and become a driving force for the progressive movement for the foreseeable future.
I am begging for him to take that leadership and move this party, and the country, to the left.
It would help if he fired Weaver before the speech.
I am rooting for you Bernie.
I have always been confused by the people that are in the “lesser evil” group.
I wonder where they have lived their entire life.
Do they have the most beautiful spouse; the most intelligent spouse; the nicest spouse?
Do they have the most beautiful kids; the most intelligent kids; the nicest kids?
The greatest job; the most intelligent bosses; the nicest bosses?
Do they always have the best steaks when they go out to eat; the most attentive server; the nicest bartender?
Do they always have the best Big Mac; the cleanest McD’s; the nicest clerks?
The only person in my lifetime who has ever said anything like this is Donald Trump. Pretty sure he lies when he says this, positive everyone else is lying when they say it.
All life is a compromise. Always has been. Always will be.
Amazes me that people fight against it.
Well, except for two year olds.
Just a follow up on my earlier post.
I found this on Evonomics blog, and I think she’s nailed What’s the Matter With Wall St. to a large extent.
“There are many reasons for this, but one key factor is that the basic training that future business leaders in this country receive is dictated not by the needs of Main Street but by those of Wall Street. With very few exceptions, MBA education today is basically an education in finance, not business—a major distinction. So it’s no wonder that business leaders make many of the finance-friendly decisions. MBA programs don’t churn out innovators well prepared to cope with a fast-changing world, or leaders who can stand up to the Street and put the long-term health of their company (not to mention their customers) first; they churn out followers who learn how to run firms by the numbers. ”
Maybe some of you who got your MBA in the years since the early ’80 can chime in on this. I was raising a child in the early ’80s, but I remember the emphasis on wealth and glam – “Lives of the Rich and Famous”, “Dallas”, etc. It seemed everyone young man (and yes, they were mostly men, even then),wanted to get an MBA so they could go to Wall St. and make a killing. “Killing”. Boy, how apt.
I called it the attack of the MBAs back in the 80s. Companies were suddenly hiring MBAs for every single industry regardless of a lack of experience in the industry. Every company started being run the same, for the same reason.
It was the main reason I left the corporate world. I just go tired of seeing this endless stream of MBAs(in my company they all came from Wharton) jump ahead of me who had not the slightest clue what they were doing. Even worse, I was the one that had to train them to do their job.
They are concerned with the stock price of the next quarter more than they are interested in building a successful company.