2008 - the tipping point ??

Let's get started in new year with some excerpts from an excellent article "How much is $38 Billion ??" recently published by Eric Fry from "The Rude Awakening" Newsletter.

Facts :

• As we end year 2007, Wall Street's five largest brokerage firms will dole out a new-record $38 billion in year-end bonuses.
• "Shareholders in the securities industry are having their worst year since 2002," Bloomberg News observes, "losing $74 billion of their equity."

  Check the stock performance of these companies to see how they well (or worse !) they did (GS, MER, MS, LEH, BSC) . Now you decide what in the world would deserve such a bonus payout !!

• As recently as ten years ago, the bonus pool for New York City's finance-company employees totaled less than 90% of the net income of NYSE brokerage firms. Today, the relative size of the bonus pool has doubled to about 180% of net income....

Now you know where to find a job for yourself, or if you are too old (like me!) to start a new career, at least you know where to look for putting your Kids to work !

Ok, let's see "How much is $38 billion?" in real perspective..

1. $38 billion is three times more money than the entire world spent on humanitarian aid last year.
2. $38 billion is twice the sum necessary to provide basic health care to every child in the world, and three times the sum necessary to provide clean drinking water to every child in the world.
3. $38 billion is seven times more than the annual budget of the National Cancer Institute (NCI), America's principal agency for cancer research.
4. And here is the kicker .. it is more money than Wall Street's five largest brokerage firms – combined – earned during the last 12 months. $38 billion is also more than the combined earnings of these five firms during all of 2004 AND 2005.

On the same token, let's compare it to some of annual world expenditures.

Did you know the world spends every year..

• $59 billion on golf ,
• $118 billion on wine,
• $794 billion either waging war or preparing to wage war.

"The world in arms is not spending money alone. It is spending the sweat of its labourers, the genius of its scientists, the hopes of its children...this is not a way of life at all in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of fire." - quote from President Dwight Eisenhower

Finally as Eric Fry puts it beautifully... The stewards of public companies do not deserve mega-million bonuses. Not once, not twice, not ever. They are the EMPLOYEES of public companies that are OWNED by the shareholders. They are not the lords of their domain with the right to tax the productivity of the shareholder/serfs. The era of the overpaid corporate stewards is corrupting and crippling American dynamism. Excessive compensation schemes like this only help to legitimize extreme socio-economic disparities. As such, these schemes work to squander the nation's collective "sweat," "genius," and "hopes"...just like warfare.

Kudos Wallstreet, I like where we are going .. Happy new year 2008 !!

Signinig off...