random drive by AIG moment

A couple of days ago I was talking about how the market, as far as I can tell, is schizophrenic.

Example:

American International Group (AIG) is currently being raked fore and aft over that entire messy bonus issue. Late last week, it traded at less than fifty cents a share. I know this because I have a spreadsheet, and you know, I'm anal. You would think--you know, in a world where the market had something to do with what was going on in the actual business end of a company--this would be bad for the price of shares. Yeah, I would too. You know. Until this morning.

However, I cannot login to my account right now, as suddenly and inexplicably, there is too much trading right now. This was new, and I went to pull my spreadsheet and realized things looked wrong, as there was money there that really shouldn't be, since come on, it's not like I'm using logic here in my buying sprees.

This is because AIG tripled in price*.

Let me point this out again. AIG is being investigated for bonus stuff and is going to get ass-raped by the government with government subsidized lube which is also known as sandpaper and this morning the shares reached two dollars each. Bank of America is also still trading above seven (as of the last fifteen seconds), and see, this is why when people look grim over the state of the economy because the DOW looks unhappy, I kind of laugh. The DOW is not unhappy. A whole bunch of hedge fund managers and assorted brokers just bought new BMWs and are making a down payment. Check car sales in the area. Or you know, whose child was arrested recently. I mean, seriously.

*taps fingers on desk*

So far, two hours of high trading and counting. This is hysterical. And I cannot participate in this historical moment. Not that I would. But I do like to boggle at it in real-time.

Comments

[seperis.livejournal.com]

Er. I mean, not to put down the analysts, and certainly not to tar them with the same brush of incompetence for our current fiscal crisis, but as a caseworker I worked sixty to eighty, and the supervisors eighty to one hundred twenty a week, and our base salary was like, 25K to 30K per year in Austin, and supers, at least, didn't have the option of overtime pay. When I was a clerk, it was like, 17,000 per year, 60-80 a week, with occaional 100s. Child protective services don't even qualify for overtime and I know most average 100 a week including travel to and from homes, court, etc.

I don't think the same level of corruption is in the first and second year analysts, but massive overwork is pretty much across the board no matter the salary or job description.

mindless gibberish ahead

[thearchpoet.livejournal.com]

Ok, so what I'm about to say is going to get me smacked if I say it wrong so a) please understand that I don't mean to give offense and that b) I occasionally word things really badly b/c I have terminal foot in mouth syndrome but:

1. I don't know what the cost of living is in Austin, so I'm not sure how to compare the numbers you just gave me to Manhattan and

2. I don't know about at other firms but my friends don't get bonuses unless they personally (meaning their clients and the accounts they manage) have profitable fiscal years.

I do understand your point and I don't disagree with it on principle but... in practice, idk. I guess I'm a little emotional and it's hard for me to separate personal friends of mine from the rest of the industry. Like you said, a good number of people (including I myself) work damned hard for way less than 50k a year (hell, I worked 100 hrs/week on a presidential campaign last year for way less than minimum wage) but like... God, there's just no good way to say this: When I work for a non-profit or on a government job, my motivations are rarely monetary. When my friends knowingly took on jobs where the *minimal expectation* is (openly) 80 hours a week of staring at spreadsheets and being yelled at like your someone's bitch on a string, it's in the hope that they can (quickly) pay off the six figures in debt they amassed paying for the finance degree from the top tier school they had to attend to even get their resumes into an inbox. By which I mean that these are people whose qualifications are pretty damned high and could, if they wanted to, go get a job with a 50K annual salary that worked them a great *great* deal less than these Wall Street firms do - when it comes to picking these jobs over other jobs however, that aforementioned bonus has a lot to do with why. Does that make them any less greedy than anyone else? No of course not, but those are what the incentives are and that’s the value the market assigns their work.

3. That said, I *do* understand your point. Hell, if you ask me, our soldiers in Iraq deserve those Wall Street salaries a lot more than a lot of Wall Street managers do - but that doesn't mean that *every person* in an industry deserves to be tarred, feathered, and lynched for the mistakes of others who work in their field – and if they make a 10k bonus (that’s taxed at a higher rate than their salary), well, if they worked hard for it – why shouldn’t they get it?

Re: mindless gibberish ahead

[seperis.livejournal.com]

I don't think most of them do either, to be honest. But a lot of the anger isn't at the rank and file, even though right now, it doesn't feel like that much of a difference.

I don't know about at other firms but my friends don't get bonuses unless they personally (meaning their clients and the accounts they manage) have profitable fiscal years.

The objections here are about bonuses to employees of companies that failed dramatically. While I am boggling at the idea of million dollar bonuses to anyone, that's a company's call if they write that in. The government bailout though, makes that a lot different in those companies.

[thearchpoet.livejournal.com]

Also, I apologize for getting all defensive and tangled up in an issue that's actually tangential to your original post - a lot of what you said (even here in the comments) rings true with me, it's just that I've spent a lot of the last six months listening to people say that everyone on Wall Street is lazy/greedy/evil etc. and that all bankers deserve to be shot etc. and I get over-sensitive about it.