Dec

7

 The snare and delusion about executive pay at the banks is right out of Uncle Remus. Don't throw me in the briar patch. Are the banks really afraid that their stars will be lured away by others who are unfettered? Every thinking person knows the reason all these big bonuses are paid is because of the contribution to profits. But the contributions to profits are directly tied, nay 100% correlated, with the amount of capital that can be contributed to positions, and the amount of risk absorbed. The amount of capital that can be deployed is so much increased by all the programs that one can't begin to count them including the guarantee of debt, the injections, and the buying of troubled assets, and the direct buying. The recipients of the funds are very much afraid, like Br'er Rabbit, that they might have to keep those profits in the company itself rather than pay them out to those who might be "poached" in the briar patch. Who is the naive party in the Uncle Remus story and the market story that believes all these stories, and pays 100 cents on the dollar to forestall these terrible outcomes?


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