Dean
25th January 2011, 15:58
Capitalist institutions do not act as "rational self-interested actors"; capitalists who play roles in these institutions do - and the following is the result:
(In reference to toxic CDOs)
In the internal workings of capitalist firms, http://www.propublica.org/article/the-s (http://www.revleft.com/vb/In%20the%20internal%20workings%20of%20capitalist%2 0firms,%20http://www.propublica.org/article/the-s)
"It was uneconomic for the traders" -- that is, buyers at Merrill -- "to take these things," says one former Merrill executive with knowledge of how it worked.
Within Merrill Lynch, some traders called it a "million for a billion" -- meaning a million dollars in bonus money for every billion taken on in Merrill mortgage securities. Others referred to it as "the subsidy." One former executive called it bribery. The group was being compensated for how much it took, not whether it made money.
...
ProPublica has published a series of articles throughout the year about how Wall Street kept the money machine spinning (http://www.propublica.org/series/the-wall-street-money-machine) [1]. Our examination has shown that as banks faced diminishing demand for every part of the complex securities known as collateralized debt obligations, or CDOs, Merrill and other firms found ways to circumvent the market's clear signals (http://www.propublica.org/article/banks-self-dealing-super-charged-financial-crisis) [2].
Wait - the market couldn't control the firm's manipulative behavior which resulted in massive bonuses and returns for a minority of executives?
And the state is trying to limit exactly those bonuses which corrupted the firm?
Clearly, its the fault of state coercion. The aforementioned self-interest of executives played no part.
(In reference to toxic CDOs)
In the internal workings of capitalist firms, http://www.propublica.org/article/the-s (http://www.revleft.com/vb/In%20the%20internal%20workings%20of%20capitalist%2 0firms,%20http://www.propublica.org/article/the-s)
"It was uneconomic for the traders" -- that is, buyers at Merrill -- "to take these things," says one former Merrill executive with knowledge of how it worked.
Within Merrill Lynch, some traders called it a "million for a billion" -- meaning a million dollars in bonus money for every billion taken on in Merrill mortgage securities. Others referred to it as "the subsidy." One former executive called it bribery. The group was being compensated for how much it took, not whether it made money.
...
ProPublica has published a series of articles throughout the year about how Wall Street kept the money machine spinning (http://www.propublica.org/series/the-wall-street-money-machine) [1]. Our examination has shown that as banks faced diminishing demand for every part of the complex securities known as collateralized debt obligations, or CDOs, Merrill and other firms found ways to circumvent the market's clear signals (http://www.propublica.org/article/banks-self-dealing-super-charged-financial-crisis) [2].
Wait - the market couldn't control the firm's manipulative behavior which resulted in massive bonuses and returns for a minority of executives?
And the state is trying to limit exactly those bonuses which corrupted the firm?
Clearly, its the fault of state coercion. The aforementioned self-interest of executives played no part.