On Wall Street he and a few others – how many? three hundred, four hundred, five hundred? had become precisely that… Masters of the Universe. – Tom Wolfe
Knee lengthen wool overcoat over a grey flannel suit, nice haircut, jaunty walk, glasses (reading not sun) resting over a receding hairline, Starbuck’s beverage in hand, this is a sight that greeted me on Thursday morning. I regularly stop each morning, in Clayton, on my way into work for my own Starbuck’s beverage, a plain old Grande Latté if you must know. The sight of this self-assured young man seemed to me to epitomize the Tom Wolfe character, Sherman McCoy, in his novel, The Bonfire of the Vanities.
President Obama proposed a 10-year, $90 billion tax on the largest financial institutions on Thursday, saying he wanted the money to back any shortfall in the $700 billion Troubled Asset Relief Program (TARP) that the government launched to bail out foundering firms at the height of the financial crisis. His proposal is in response to public outrage at the “obscenely” large bonuses that Wall Street executives, the so-called Masters of the Universe (MOTU), are getting this year.
Last year at this time these very same MOTU were being bailed out by the American people. The goal of the TARP bailout was to get the banking system working, lending again. Instead the banks kept the money to themselves and used it to make their balance sheets look good. Now a year later it is bonus season again on Wall Street. Improbably, a year later, the Wall Street banks have pulled a rabbit out of their hats. Maybe it was not all so improbable after all. If the government gives you almost free billions of dollars, how hard can it be to show a profit?
The banking giant, JP Morgan said Friday it earned $3.28 billion during the last three months of 2009, primarily because its investment banking and trading businesses were still profiting from a 10-month market rally. The company again added to its reserves for failed loans during the quarter, but its other businesses enabled it to more than overcome the continuing weakness in lending. The market rally also allowed JP Morgan to give big bonuses to its employees. Compensation costs, which include salaries, bonuses and benefits rose 18 percent in 2009, although the company cut its work force by 1 percent during the year.
Hey Muse, my lovely Muse, thanks for the following:
Today, January 15th, is the birthday for the following people: Martin Luther King’s actual birthday was today. On Monday, the seventeenth, we will celebrate his birthday with his federal holiday; A.A. Milne, author of the Winnie the Pooh stories, was born on this day too; Most importantly though, Grinch is still celebrating his natal day on this very day. Happy Birthday, Grinch!