distribution
[the bonus pool of the top 5 investment banks was 10 times the size
of the World Food Program budget - this is from noted doom &
gloomster Marc Faber]
“Many political analysts are treating the outcome of the election as
if it were a referendum on Iraq. But the fact is that the Iraq War
was already going badly when President Bush was re-elected and there
was at that time at least as much negative press about Iraq as there
is now. What has happened in the recent election is that people voted
- as usual - with their pocketbook. The election results should
therefore be regarded more as a referendum on the economy. The
average person or median household just isn’t feeling particularly
good about how he is doing, since the cost of necessities has risen
in excess of income gains and despite recent accelerating wage gains.
I should like to remind our readers that educational costs,
transportation, food and in particular health-care costs, are all
increasing at a fast pace and significantly in excess of core inflation.
But aside from the economy of the median income households, there is
another sector of the economy that bears no resemblance to the
standards of living of the workers and the middle class: the economy
comprising asset-rich people and, in particular, asset and money
shufflers. It is the economy of the financial sector, and of the less
than 1% of the population that owns substantial assets, which, with
easy monetary policies, are showing stunning appreciation. It is the
economy of the 173,000 employees of Goldman Sachs, Morgan Stanley,
Merrill Lynch, Lehman Brothers, and Bear Stearns; the economy of
prestigious property owners and art collectors. According to
Bloomberg, ‘never in the history of Wall Street have so many earned
so much in so little time’. The 173,000 employees of the above-
mentioned five Wall Street firms will receive this year US$36 billion
in bonuses, which is a 30% increase on last year’s record. This will
average U.S.$397,707 at Goldman Sachs, U.S.$154,556 at Morgan
Stanley, U.S.$174,683 at Merrill Lynch, U.S.$210,696 at Lehman, and
U.S.$203,077 at Bear Stearns. (At Goldman Sachs, according to
Bloomberg, total average compensation - including bonuses - will
increase to U.S.$659,000.)
To put the U.S.$36 billion in bonus payments into perspective: the
United Nations’ World Food Program, which feeds 79 million people in
the world’s poorest countries, has a budget this year of only about
U.S.$3.5 billion.”
Marc Faber The Gloom, Boom, and Doom Report December 10, 2006