You’ll have to forgive me if I’m not over excited by Matt Taibbi’s latest which I think entirely misses the point.
After all, this is a man who celebrated Schniederman’s appointment as a victory instead of just another sell out which we are seeing right now in Obama’s cave on birth control is the only mode this administration knows.
Sophisticated snark? Never bought that for an instant Matt.
He does make several points that I’ll repeat to save you the agony of plowing through the source–
Goldman’s numbers, to me, offer a hilarious counterpoint to Sherman’s piece. The bank’s earnings in total for last year were $4.4 billion, down some 65% off of last year’s numbers. Its revenues for the year were down 26%. Despite these bummerific numbers, Goldman reduced bonuses and compensation by only 21%, down to $12.2 billion, certainly a number to weep over. If the era of outsized bonuses is over, how come the biggest banks aren’t even cutting them to match revenues, much less profits? One could even interpret Goldman’s numbers as a major increase in the size of the bonus pool, relative to earnings.
But what about other banks? Well, Citigroup also saw a drop in revenues for the year (although its net income actually went up, from $10.6 billion to $11.3 billion). But what was most concerning was the bank’s crappy fourth quarter, when it suffered an 11% drop in earnings.
(N)ow Wall Street is being threatened with a return to those “quaint” days of loaning money and supervising bond issues and such.
Look, the financial services industry should be boring. It should be quaint. Let’s take the municipal debt business. For ages, it was a simple, dull, low-margin sort of industry, in which banks arranged municipal bond issues and made small but dependable profits as cities and towns financed improvements and construction projects.
That system worked seamlessly for decades, until people like Sherman’s interview subjects suddenly decided to make the business exciting. You know what happens when you make municipal debt exciting? Jefferson County Alabama happens. Or, on a macro level, Greece happens.
When making a few points on mere bond issues stops being enough, and you have to cook up crazy swap schemes and indices to bet against those schemes, ingenious scams allowing politicians to borrow billions of dollars that they will never in a million years be able to pay back, you might end up getting a few parks, schools, and subways in New York.
But what you get everywhere else is a giant clusterfuck that costs the rest of us years and even more billions of tax dollars to remedy.
This is what the protests are all about – it’s anger that Wall Street has been profiting from an imaginary economy that leaves bankers overpaid, but creates damage everywhere else. Sherman doesn’t get this.
Matt doesn’t seem to get it either.
Why are we supporting Republican policies again? You’ll have to speak a little louder, I’m a mite deaf in that ear.