31–40 of 119 posts
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
Earlier quoted context omitted.
> shareholders have to carry the can Shareholders hold shares by choice, so they don't "have to" do anything. If there are 22 years of records about which fines were paid, then the market must have already priced in this information a long time ago. Shareholders chose to pay that market price.
> Shareholders hold shares by choice, so they don't "have to" do anything. That's not how pensions, ETFs, index funds or pretty much anything works.
If it's not actually underperforming, that is, a lot of the market does comparably, not much better, them $1B / year is just the cost of doing business, however cynical this may sound.
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
This is generally a problem with employees in general, especially as tenures decline. Sales stuffs the channel with products that are later returned as they get their commission. Or they vastly oversell what the product can do. Engineers rack up tech debt to keep the Scrum Master happy and choose technologies based on how good they look on a resume. HR people pass around crappy or abusive employees to other departmen…
I don't think that terminating an at-will employee is any hard work.
What's hard is to hire a replacement; it can easily take months, and cost months of the employee's salary in the interviewing costs. And somebody got to do the jerk employee's work in the meantime.
(And this is in the US; I can't start imagining the hurdles of firing somebody in the EU.)
Earlier quoted context omitted.
> Shareholders hold shares by choice, so they don't "have to" do anything. That's not how pensions, ETFs, index funds or pretty much anything works.
If some institutions track indexes, why don't indexes drop the chronically underperforming asset? If it's not actually underperforming, that is, a lot of the market does comparably, not much better, them $1B / year is just the cost of doing business, however cynical this may sound.
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
But look at Bank of America[0]. 4x that meager $22B of WFC. Or Chase[1], which is only slightly worse than WFC. BK and USB are almost poster childs with only ~1B of penalties each[2][3]. [0] https://violationtracker.goodjobsfirst.org/?parent=bank-of-a... [1] https://violationtracker.goodjobsfirst.org/parent/jpmorgan-c... [2] https://violationtracker.goodjobsfirst.org/parent/us-bancorp [3] https://violationtracker.goo…
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
Sociopaths follow the rules if there are repercussions to breaking them, a fine is not really a repercussion.
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
While I'm not against throwing corrupt bank execs in jail, shareholders could also take their job seriously and only send people to the board of directors that actually hold the company officials accountable.
Unfortunately, an increasingly large amount of stocks is held by "neutral" investors (=passive ETFs) or neutral-ish investors (pension funds, insurances and the uber wealthy's private wealth management), which creates a lot of leverage for "activist investors" that push for short-term beneficial actions even if these end up damaging to the company long term, such as going for questionably legal operations.
[1] https://blogs.cfainstitute.org/investor/2022/01/21/myth-bust...
Earlier quoted context omitted.
> shareholders have to carry the can Shareholders hold shares by choice, so they don't "have to" do anything. If there are 22 years of records about which fines were paid, then the market must have already priced in this information a long time ago. Shareholders chose to pay that market price.
> Shareholders hold shares by choice, so they don't "have to" do anything. That's not how pensions, ETFs, index funds or pretty much anything works.
This way if you own a share in a fund or have a right in pension, if the fund chooses to buy shares of company A, when there is a shareholder vote of company A instead having the fund manager to vote, the fund manager would transmit this voting rights to you.