tag:blogger.com,1999:blog-19649274.post9147080326873268532..comments2024-03-27T17:16:12.789+05:30Comments on The Leap Blog: How much purging is required at the top of big American banks?Ajay Shahhttp://www.blogger.com/profile/03835842741008200034noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-19649274.post-41237108932003115972009-05-15T16:16:00.000+05:302009-05-15T16:16:00.000+05:30Though the draconian 90% tax bill did not go into ...Though the draconian 90% tax bill did not go into law, <A HREF="http://money.cnn.com/2009/05/14/news/companies/aig_bonuses/index.htm" REL="nofollow"> the desire for compensation reform</A> remains.JDhttps://www.blogger.com/profile/03153259764448011701noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-32485699724306261852009-05-12T16:21:00.000+05:302009-05-12T16:21:00.000+05:30JD, being a card carrying economist, I have to say...JD, being a card carrying economist, I have to say that the fault is not of the humans but of the incentives that they were presented with. I.e. that the same Ken Lewis would have behaved very differently if the world of rules and constraints surrounding him was different.<br /><br />But then that immediately leads you to the rating agencies. Okay, imagine a world where rating agencies were fundamentally changed. That would generate better incentives for Ken Lewis.<br /><br />My fear is that if you sack a few of the people at the top today, then others much like them will rise through the ranks, and you won't have achieved much.Ajay Shahhttps://www.blogger.com/profile/03835842741008200034noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-54535230493926854732009-05-12T15:54:00.000+05:302009-05-12T15:54:00.000+05:30I agree that there are many people to be blamed fo...I agree that there are many people to be blamed for the current crisis. To that extent, I am in sympathy with both <B>jumpup</B> and <B>rajan</B>. Both the mania of the crowd for buying on credit and the Federal Reserve policy of easy money + constant bail-outs have brought us to this crisis. I want to look at the most practical way to break this cycle. I continue to feel that to emerge stronger from this crisis, we need to change many of the top players in Wall St, or we will soon see a recurrence to past behaviour.JDhttps://www.blogger.com/profile/03153259764448011701noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-48265016707813024232009-05-12T08:21:00.000+05:302009-05-12T08:21:00.000+05:30Folks, this post is by JD and not by me.Folks, this post is by JD and not by me.Ajay Shahhttps://www.blogger.com/profile/03835842741008200034noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-71764193674836843752009-05-10T16:55:00.000+05:302009-05-10T16:55:00.000+05:30Ajay, from your conciliatory soothe speak it is cl...Ajay, from your conciliatory soothe speak it is clear you live in India, advocating Gandhian love for Messrs. Fuld, Thain, Lewis et al. (or is it a knee jerk sucking up to the well off...or a "chalta hai" attitude toward fait accomplis!) <br /><br />All Far removed from what happened in US.<br /><br />Tulip Mania? HA HA HA. <br />The US inflated SUCH a bubble, it lead to SERIAL BUBBLES 1997-2008: DotCom, Telecom (fiber optics), Commodities, Oil (a particular nasty/ but separate subset of commodities in general), Real Estate, and Structured Finance Bubbles! <br /><br />This is FAR beyond one tulip mania!<br /><br />Then the Fed orchestrated hushed and rushed (without public debate) acquisitions of investment banks ("big swinging dick" type gamblers) with deposit taking banks where mom and pops keep their money. Thus bailing out the gambling in CDS/ Synthetic CDO and what not. <br /><br />As you know from economics 101, betting on shares/CDS/CDO/ABS is NOT counted in GDP. Capital Gains arisen from GAMBLING do not add to GDP! Yet, it has become central to US markets, affecting the REAL ECONOMY.<br /><br />Also, OIS Spread data showed clear gumming up of interbank lending starting in NOVEMBER 2007! <br /><br />But deals were struck in backrooms as to who will buy what gambling institution, then come to taxpayers for their money because it would now affect the depository banks, all to keep the gamblers afloat.rajannoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-35811539584568438062009-05-10T16:07:00.000+05:302009-05-10T16:07:00.000+05:30I fail to understand, you tried to reason everythi...I fail to understand, you tried to reason everything except the crowd. Crowd is irrational. Period. It will always be. Period. You can't control, deregulate tax its irrationality.<br /><br />Nearly a century back, Charles Mackay wrote, Men go crazy in herds and return to senses often painfully and one by one.<br /><br />Seems that is the case. Remember tulip bulb craze? Dot com crazy? Railroad collapse of 1906?<br /><br /><br />SohamAnonymousnoreply@blogger.com