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Saturday, September 27, 2008

Not everybody is loosing on Wall Street

From the New York Times:

Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates.

That's $19.1 just to show up for the job. Congratulations for the negotiation skills!
In my book, you get money when you add value, but I am not sure where and how value can be measured in this case. From what I see, the real value was in getting the contract. But if you are good enough to convince people to pay you just for being involved, good for you. In the end the blame goes to whoever agree to granting you such a big gift with no restriction.
Despite the contract, I would feel bad about taking so much money when people at the bottom are struggling, but that's just me, and probably why I am not up there with the other guys, which is fine thank you :-)
Mr Fishman is not to blame, but his case is a striking example of how screwed up the system is. No wonder Wamu ended up where they are now...
And the sad thing is that I am sure there is a lot more of this going on around Wall Street.
Hopefully this crisis will allow us to really rethink how we do things on the financial markets. What is happening is no accident, more like the normal consequence to playing too much with the numbers to the point where what we do becomes completely disconnected from the reality on the ground. Somebody messed up with the modeling and the statistics, forgetting that there are real people and real businesses behind the spreadsheets.
Forget the kids out of business school, anybody involved with finance should spend some mandatory time working in a real business with a down to earth salary before they are allowed to do what they do. Maybe this will make a difference and allow then to keep their sense of reality when they get into playing with the big numbers.
From the layoff that are happening in New York, London and all over the place, a lot of the financial guys are getting the lesson now.
Too bad we have to learn the hard way...