["this is a derivative"- Dumb and Dumber movie]Ya. crooked ones.
Apparently, some people who are in charge of a lot of pension money, like the California teachers
pension, have not crawled out from under their rock lately. They haven't seen that a
visit from a Wall st. banker should be treated like a visit from the Grim reaper or the devil.
But no, they go on giving the banks trillions.
They've obviously read Lil Red Riding Hood, BUTT have not seen the similarity.
Those people pension people could be plants from the banks.
They're everywhere, really.
and they'll get worthless IOUs in return.
Boom. There goes the rest of the money.
checkitout:
Read more: http://www.project-syndicate.org/commentary/taleb1/English#ixzz1WqUsOxso
Nassim Taleb: The American Economy Will Transfer $5 Trillion To Banker Pay And Bonuses Over The Next 10 Years
Nassim Taleb and Mark Spitznagel, Project Syndicate
For the American economy – and for many other developed economies – the elephant in the room is the amount of money paid to bankers over the last five years. In the United States, the sum stands at an astounding $2.2 trillion.
Extrapolating over the coming decade, the numbers would approach $5 trillion, an amount vastly larger than what both President Barack Obama’s administration and his Republican opponents seem willing to cut from further government deficits.
That $5 trillion dollars is not money invested in building roads, schools, and other long-term projects, but is directly transferred from the American economy to the personal accounts of bank executives and employees.
Such transfers represent as cunning a tax on everyone else as one can imagine. It feels quite iniquitous that bankers, having helped cause today’s financial and economic troubles, are the only class that is not suffering from them – and in many cases are actually benefiting.
Mainstream megabanks are puzzling in many respects. It is (now) no secret that they have operated so far as large sophisticated compensation schemes, masking probabilities of low-risk, high-impact “Black Swan” events and benefiting from the free backstop of implicit public guarantees.
Excessive leverage, rather than skills, can be seen as the source of their resulting profits, which then flow disproportionately to employees, and of their sometimes-massive losses, which are borne by shareholders and taxpayers.
... So the facts are clear. But, as individual taxpayers, we are helpless, because we do not control outcomes, owing to the concerted efforts of lobbyists, or, worse, economic policymakers. Our subsidizing of bank managers and executives is completely involuntary.
But the puzzle represents an even bigger elephant. Why does any investment manager buy the stocks of banks that pay out very large portions of their earnings to their employees?
The promise of replicating past returns cannot be the reason, given the inadequacy of those returns. In fact, filtering out stocks in accordance with payouts would have lowered the draw-downs on investment in the financial sector by well over half over the past 20 years, with no loss in returns.
Why do portfolio and pension-fund managers hope to receive impunity from their investors? Isn’t it obvious to investors that they are voluntarily transferring their clients’ funds to the pockets of bankers?
