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Forbes 400 Data Shows Paul Graham Is Wrong

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Re: Forbes 400 Data Shows Paul Graham Is Wrong

#141

Post by yummyfajitas »

Super_Jambo wrote: post #138
yummyfajitas wrote: post #135

Earlier quoted context omitted.

If the IB's knew the assets were toxic, why did they take long positions on them? Did they want to lose billions of dollars?

I thought they didn't so much take long positions as ended up with being long as a result of everyone stopping buying them. Were they buying from other IBs or was it just a case that they couldn't sell some of the toxic packages they'd created?

That's true for Goldman - they tend to have a very short term focus. It was not true of many of the other banks. This is why Goldman did so well (relatively speaking) in the crash.

Re: Forbes 400 Data Shows Paul Graham Is Wrong

#142

Post by phony_identity »

swombat wrote: post #49
phony_identity wrote: post #47

Earlier quoted context omitted.

But it pays cash and lots of it How much? Can you be more, uh, quantitative here?

Starting salary for typical IT roles (dev, etc) are about £35-45k p.a. in London depending on how well you negotiate. That's straight out of uni. It goes up rapidly as you go up the ladder. Within a couple of years, if you do well, you should be up to £65k or so, and probably start getting a bonus on top of it too (probably about £10-20k or so in IT). It's not that unusual for the salary to go up by about £10k per ye…

That's not that much money. You should do better in hourly contract work in Silicon Valley. That can be, at worst, dull. But not soul-sucking.

Re: Forbes 400 Data Shows Paul Graham Is Wrong

#143

Post by richcollins »

rmk wrote: post #115
richcollins wrote: post #89

Earlier quoted context omitted.

Online poker is a consentual exchange. Inflating the money supply and taking taxpayer bailouts is akin to coercive theft.

So are taxes for building bridges to nowhere etc. A penny in tax is one penny that cannot be allocated for something else (which is far more likely to be productive). The money supply was inflated because of the easy money policies of Greenspan and co. Attributing that solely to bankers oversimplifies things. And let's remember that Fannie Mae and Freddie Mac, two of the groups that originally lobbied for 'increasing…

I agree completely.

Re: Forbes 400 Data Shows Paul Graham Is Wrong

#144

Post by billc »

yummyfajitas wrote: post #69
mmaunder wrote: post #41

I used to work for CSFB (now Credit Suisse) in London's Canary Wharf. It's the most I've earned in my entire career. Unless you've worked for an investment bank you have no idea how much money they have. It's like a giant gulf-of-mexico-style money gusher that doesn't quit. How do they make it? CSFB flies on the bleeding edge of what's legal and always have. I was there when Frank Quattrone was involved in the IPO of…

They take their licks though. I was there when the LTCM fund collapsed and they lost $600M. Also when the Russian economy collapsed and they lost another $600M. Layoffs? Nah - business as usual. The finance industry doesn't need as many layoffs as other industries because they solved the stick wage problem.

How did they solve it?

Re: Forbes 400 Data Shows Paul Graham Is Wrong

#145

Post by bokonist »

apsec112 wrote: post #7
pg wrote: post #6

Earlier quoted context omitted.

I'm curious what your test was for deciding whether someone was in finance.

Here are the industries I considered to be "finance": - Hedge funds and other money management - Private equity - Investment banking - Leveraged buyouts - Proprietary trading - Traditional (retail) banking and credit cards I did not consider heirs with investments to have gotten their money in finance, unless they increased their original sum ten-fold or more (in real dollars). I also did not consider real estate inv…

Real estate probably should be considered finance, making money in real estate is all about having access to the proper financing.

Re: Forbes 400 Data Shows Paul Graham Is Wrong

#146

Post by mattmaroon »

yummyfajitas wrote: post #135
mattmaroon wrote: post #98

Earlier quoted context omitted.

Are you kidding? It's been what, 2 years since the market crash they caused? http://articles.latimes.com/2010/apr/27/business/la-fi-goldm... Investment bankers created and sold the toxic assets (which they knew to be toxic) that caused the financial meltdown. The top commenter explained a few more terribly evil things they do as well. For more examples, read any book ever written about Wall Street.

If the IB's knew the assets were toxic, why did they take long positions on them? Did they want to lose billions of dollars?

They didn't. They hedged the long positions with credit default swaps, assumed that they couldn't lose (which was true if the counterparty could afford to pay the swaps) and thus didn't declare them on their balance sheets as they were viewed to be without risk.

What ended up happening is the counterparties (most notably AIG) had taken on far more in credit default swaps than they could pay out, meaning there was lots of risk hiding off balance sheet. This is why Uncle Sam had to bail out AIG. (The Fed could have bailed out all of the people AIG owed instead, but that would have been far more work for no clear gain.)

Re: Forbes 400 Data Shows Paul Graham Is Wrong

#147

Post by mattmaroon »

starkfist wrote: post #136
mattmaroon wrote: post #73

Earlier quoted context omitted.

I don't think if I could live with myself if I worked at an investment bank. Most of what they do provides no benefit to humanity, in fact on the whole they're probably parasitic. Shuffling money around senselessly while taking a cut might be extremely profitable if you do enough of it, but it's just a drain on modern capitalism.

"Mafia Boss" provides benefit to humanity?

My company employs 14 people and counting. It's created most of those jobs in a recession. It buys goods and services that total up to a lot of money which then employ other people.

The games provide enjoyment to thousands of customers. Don't get me wrong, I'm not curing cancer, but yes it does benefit humanity.

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