Verbum Humanum

The old pay system (era of John Whitehead): you work at an investment bank for 30 years, have a reasonable draw and cash bonus, build up stock in the firm as most of your bonus, and when you decide to retire you request of the partners their permission to go limited. If they assent, you get to withdraw your money over five years, all the while continuing to expose the balance to the risks of the enterprise.

The new pay system post-Donald Lufkin Jenrette’s original I.P.O.: you’re a young 29-year-old punk playing with OPM (Other People’s Money), taking huge risks for which you get huge bonuses, while the outsiders shoulder the losses on your bets. You make all the money you’ll ever need  in three years, stay around 15 years to pile up five times as much as you need, and then you retire with your cash hoard, buy a winery in Napa/Sonoma or a huge farm in Connecticut, living above the fray for the rest of your life.

Which system, do you think, makes people consider the downside of their actions?

Before we get into the meat of the complaint, one of SAM's primary concerns, is that the US stock market has become the functional equivalent of China: trading intellectual property is routinely abused, stolen and used against its very creator.

• The US equity markets are meant to facilitate investors' allocation of capital to businesses, thus expanding production and improving the quality of life in America.
• The markets have strayed from this social purpose, and presently resemble casinos more than orderly markets. As a result, the economy is hindered, fewer jobs are created, and reasonable returns for true investors (not traders) are compromised.
• The property rights of creators of intellectual capital are being systematically and openly ignored by the exchanges and certain market participants. The order originator's hard work, ingenuity, and prospective returns are being taken and sold by those who did not create it.
• Whereas trading was once a means with which to match long-term buyers and sellers of businesses, trading has now become an end in and of itself.

Mr. Weinstein has been advising two brothers in their late 20s who wanted to buy a $700,000 apartment with $250,000 from their parents. But their parents’ investment portfolio has lost so much value that they now can give only $50,000. Since the brothers make about $45,000 a year each, they are now shopping for a $500,000 apartment.

Elon Musk has been living off personal loans from friends since October 2009 and spending $200,000 a month while making far less.

Google's trading room opened in January. The plan is to keep the war chest growing safely and ready to be deployed should the right mergers-and-acquisitions opportunities arise.

After all, he has $5 billion invested in Goldman. We must remember what Buffett famously said: “Rule No 1: Never lose money. Rule No 2: Never forget rule No 1.” But we should also remember what he said on another occasion: “It takes 20 years to build a reputation and five minutes to ruin it.” The two revelations clash with each other as much as his public position on derivatives and his $63-billion derivatives portfolio.

Buffett has had some rocky economic and personal times -- he's had double mortgages on his house and has had to raise money for shows; he admits there have been times he's wished for the easy way out. Once, in his 20s, he approached his father to ask for a loan -- his father refused. Peter was angry at the time, but in retrospect, he appreciates his father's resolve.

That's Peter Buffet, Warren's son.  Let that sink in.

Rule No. 1: Never Lose Money. Rule No. 2: Never Forget Rule No. 1.

Buffet is a genius, the rest are just playing at a game.

Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash

When I read articles like this I feel like America will explode at any moment. I take it with a grain of salt, though. And in the end, the Lord is King of the nations, and His plans and judgments will not be thwarted, one way or another.