That’s what you could conclude, if you compare investment banking pay with compensation paid to sports stars. And respected Rochdale Securities bank analyst Richard Bove has done just that.
According to the New York Times DealBookcolumn, Bove’s recent note ‘Financial Execs Underpaid ?’ points out that golf superstar Tiger Woods bagged $128m last year, while Merrill CEO John Thain ‘only’ got $83m in 2007 (the last decent year for the industry). Bove also mentions that the average N.B.A basketball player makes around $5m-a-year, while the ‘average’ staffer at Goldman Sachs is thought likely to bag $800,000 this year. Having said that, golfers and basketball players don’t tend to do things that screw up the global economy!
Databreaches.net reports that Merrill Lynch has claimed in a US federal court that three people posing as firm recruiters hatched a ‘nafarious plot’ to fleece innocent jobseekers, by obtaining bank account details on the basis that they were needed after the jobseekers were ‘accepted’ into a ‘paid training program’.
In a boxing match, a good referee will take a boxer out who’s been bit so hard, he’s staggering.
Why?
The potential damage from a blow to someone already in a weakened state is exponentially higher than from the first.
Unfortunately for the credit market, there’s no referee to call a time out.
A second blow in the form of a second major wave of real estate loan defaults is on its way – and nothing can stop it.
My guess is the credit market is being propped up now during the lull so that the banks can sell off their holding to suckers (us) before the real carnage begins.
Imagine two trainers propping up an nearly unconscious fighter as his opponent warms up for one final blow and you’ve got a good idea of the situation we’re in.
Here’s how it looks from the trading floor – from the mouths of people who know what’s going on and aren’t afraid to say so.
I am only interested in trading Forex right now. May be you should to.
