I submit that they are one in the same. I have plenty of friends who have resources to invest and choose not. They were smart enough to know they don’t know. they’re sitting on cash. Or houses with no debt. Or expanding their family’s small business. Or being entrepreneurial and trying something new on their own. They’re not parking money is various “public securities” and hoping management does a good job.

What if the compensation system of these Public Companies is EXACTLY right? What if you’re a fool to invest your hard earned dollars in a situation you can’t control and don’t understand. Aren’t most of the compensation packages publicly available and shouldn’t they be part of an investor’s due diligence? Maybe the term “public” as in publicly traded or public stock creates a misconception that the general public should be protected. If a company (its management and board) wants to burden itself with an expensive employee compensation plan, that should be reflected in the company’s value and stock price. Maybe these solutions for fixing management comp shouldn’t be mandated, but left for the companies to adopt themselves in an effort to attract investors.

I was going to say perhaps there could be an “accredited investor” criteria that one has to meet before being allowed to invest in public securities – but that won’t fly.

Why does everyone think that management needs to be altruistic?

And if you’re going to argue that this system allowed the economy to be put at risk requiring bailouts. First of all, I think they should hall failed. But, since that didn’t happen – if a company poses systemic risk and requires a bailout, why the hell aren’t the dollars funneled directly to the point of systemic risk – and not a 100 cents on the dollar (e.g. AIG -> GS) but at just enough to avoid collapse? Why are employees paid anything? Who cares if star traders leave? We’ve given
up on making money with this mess, haven’t we ? I thought the point was to avoid the GD or worse. Its like, without a bailout the company implodes and the star trader (and others) would get nothing –well would go to court and get in line. But, with the bailout he expects to be made whole? Wait – I thought it was a bailout of the System, not the employees and not every creditor at 100 cents on the dollar.

About this $100mm bonus guy from Citi – let me get this straight. Citi is toast, so in need of a bail out in order to prevent Catastrophic Systemic Failure around the world. Fine. Assume we agree on that point. Now we’re worried about paying a star trader? Why is losing a star trader a danger to the global capital market system? Let him leave. If we’re worried because now we “own” Cit, well then isn’t that greed all over again? Why don’t we (the Gov) just write their own contract with him? Let him trade with the our balance sheet…

Stockholders vote against management by selling their stock. Those that don’t vote against incompetent management in this fashion, will cease to remain holders of stock in going enterprises. No one is forced to hold stock in a bank (At least no one ought to be. Now we all are, but I can’t imagine even the single least sentient numbskull outside of the latter two administrations are still thinking that was a good idea.)

So, the problem is not who gets to speak at board meetings and such. The problem is that it can be perfectly profitable to invest in a company consisting of nothing but abject incompetents, as long as that company is under the wing of the thugs with guns and printing presses. Or, perhaps, maybe the Goldman crew aren’t complete idiots, just unusually incompetent at what those old-fashioned amongst us still think constitute banking, trading and risk management. While at the same time being awfully good at what really matters in this brave new ‘progressive’ world, namely suckering middlebrow public officials and public school indoctrinated mobs into robbing third parties at their behest.

And, have no doubt, all the childish banter about ‘regulating Wall Street pay’, is nothing but an attempt to cover up and distract from this robbery. And sadly enough, it even seem to be working.

Hey I just wanted to say “thanks” for that link…

http://www.ritholtz.com/blog/2009/08/looking-at-wall-street-pay/#comment-199609

It’s a pretty comprehensive BIG PICTURE view which broadly conforms to what’s been on my mind…A couple of quick points…

- #1, I’m not NEARLY as versed in EW as Andy T is (so I cede to his logic first)
- I’m aware that there is a great debate among “modelers” as to when the largest of the recent wave counts started. Personally, I’m in the 2000 camp…There are several reasons to think so, but my favorite recent one is when I saw the “inflation adjusted” prices on the S&P for the 2007 highs (they suggest that IAV’s topped out lower than the 2000 highs).
- Assuming a 2000 high, it fits the 18 year cycle pattern better.
- As for “where” this bear market rally will top out is anybody’s guess…(I thought 956 might have been it, now I’m working on 1007, and if that gets taken out, 1060…I even have “higher” points in mind…
- Note: The possibility of “intermediate” higher levels is the thing that is preventing me from KITCHEN SINK’ing it right now on the short side…So for now, for, me, it’s TRADEABLE to go on the short side when markets get stretched, but I exit those shorts rather quickly…Ithink there’s PLENTY of bone on the downside (and the upside is looking more chewed by the day)…
- One thing I have been doing a little is buying WAY IN THE FUTURE (2011) puts that are extremely out of the money…They’re pretty cheap now with the VIX here in the low 20′s…That’s my insurance policy in case the market just DIVES (like in ’87), and catches everyone by surprise…

Unless the economy completely tanks, I can’t imagine it will change. The atitude of “I work with money, I’m more valuable than everyone else” will persist because most people in the country keep hoping that they can get rich quick through some amazing luck in the stock market or even a well picked lottery number.

I’ll never buy it though…