Predicting Depressions-What are Banker's Salaries?


	Predicting Depressions-What are Banker's Salaries?

dmegivern

2-15-2009 7:48 PM

312 views

tags:

economics, recession, depression, bankers, salaries

Add a Comment

Login to Comment. Not a member yet? Sign up

Today's Top Clips

visit the Top Clips page

View the Top Clips from February 15, 2009

Embed This Clip In Your Site...

<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://www.clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/d452da24-7285-4f50-ab6f-cc1b7523f82c/31E7B69C-B742-4098-A422-473A9A662A1B/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://broadstuff.com/archives/1520-Bankers-excessive-salaries-as-predictors-of-Depression.html" href="http://broadstuff.com/archives/1520-Bankers-excessive-salaries-as-predictors-of-Depression.html" style="font-size: 11px;">broadstuff.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://broadstuff.com/archives/1520-Bankers-excessive-salaries-as-predictors-of-Depression.html"><H4 class="serendipity_title"><A href="http://broadstuff.com/archives/1520-Bankers-excessive-salaries-as-predictors-of-Depression.html">Bankers excessive salaries as predictors of Depression</A></H4>
<DIV class="serendipity_entry serendipity_entry_author_Alan-Patrick">
                        <SPAN class="serendipity_entryIcon">
                                                    </SPAN>
<DIV class="serendipity_entry_body">
                <DIV class="serendipity_imageComment_center"><DIV class="serendipity_imageComment_img"><IMG width="419" height="312" alt="" src="http://broadstuff.com/uploads/bankersoverpayment.JPG" class="serendipity_image_center" /></DIV></DIV></DIV></DIV></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://broadstuff.com/archives/1520-Bankers-excessive-salaries-as-predictors-of-Depression.html">Chart shows excess wages over mean for financial sector<A href="http://pages.stern.nyu.edu/~tphilipp/papers/pr_rev15.pdf"> from NYU</A>- (hat tip <A href="http://paul.kedrosky.com/archives/2009/01/23/bankers_pay_as.html">Paul Kedrosky</A>) as a predictor of recessions / depression it...well, the implications are clear. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://broadstuff.com/archives/1520-Bankers-excessive-salaries-as-predictors-of-Depression.html">As to why, once it starts the system dynamics are pretty unsubtle - as the Economist noted today, the main problem is that banking also suffers from <A href="http://www.economist.com/specialreports/displaystory.cfm?story_id=12957761">adverse selection issues</A> as well, as fear moves to greed in the boom time:
<BLOCKQUOTE>
...as a boom takes its course, fear is supplanted in what a senior quant at an American bank calls the “Cassandra effect”. The more you warn your colleagues about the tail risks—the rare but devastating events that can bring the bank down—the more they roll their eyes, give a yawn and change the subject. This eventually leads to self-censorship. “The system”, he says, “filters out the thoughtful and replaces them with the faithful.”
</BLOCKQUOTE></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://broadstuff.com/archives/1520-Bankers-excessive-salaries-as-predictors-of-Depression.html">Greed without Governance, allowed to build over N years, equals depression, and its absolutely predictable</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/31E7B69C-B742-4098-A422-473A9A662A1B/blog/" title="blog or email this clip"><img src="http://content8.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

Clipmarks: Home; New Clips; Top Clips; Dashboard

Popular Topics: News; Life; Science; Technology; Entertainment

Get Started: Sign Up; Install Clipping Tool; How Clipping Works; Clip-to-Blog™; ClipSearch

Tools and Resources: FAQ; ClipWeek; Top Clippers; Top Tags; Site Map

About Clipmarks: About Us; Contact; Blog; Copyright; Privacy; EULA

Search Options

Today's Top Clips