From Pine View Farm

When Zombie Banks Walked the Earth 0

Christopher Swann considers pay in the banking industry and finds it grossly overblown.

That does not surprise. But he goes on to demolish the arguments the banksters use to claim that they are somehow different and deserve to be overpaid. A nugget:

Nor, Woolley (Paul Woolley, an academic at the London School of Economics–ed.) argues, do the activities of the financial sector add as much value as they claim. The boast, for example, that financiers funnel savings to their most productive use is overdone. As fund managers compete to beat the market they are often forced to follow trends. This momentum trading causes an over-allocation of capital to frothy sectors — as seen during the Internet bubble.

Aside: If they were as smart as they claim to be, they wouldn’t keep blowing all those bubbles, now, would they?


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