Fausterion18 t1_jefpp9c wrote

>The “American” dream was real a long time ago. People could buy homes and afford food and amenities on a single parent salary.

Lmao if by "homes" you mean a 700 sqft shack and "food" you mean spending more money on food than Americans do today(as percentage of income) despite having someone to do cooking full time, sure.


Fausterion18 t1_j6p2ugs wrote

Totally irrelvant, I'm only addressing the fire sale and the CEO speech.

> I think there is a huge difference between what individual retail traders do and what is done at the big banks on Wall Street.

There is zero difference from a wsber selling an option and one of the traders in that scene selling a bunch of mbs.

> This movie was an indictment of that. I'm surprised you're not seeing that. That is what my original point was in my first comment.

Your original point is a red herring.


Fausterion18 t1_j6otu08 wrote

> You dumb ass they were talking about the par value of the lots that compose the MBS.

You dumbass the par value is always 100. The traders were lying and claiming they bought it at 97 or 95 whatever.

Goddamn you clearly don't know shit about bonds. img

>They weren't just selling the MBS in the firesale, they were selling the mortgages they used to make the MBS
>This is literally spelled out for you in the board meeting.

You can't sell a mortgage over a trading desk like this idiot.

They were selling their own originated MBS and pretending like they bought them for trading purposes.


Fausterion18 t1_j6onrgw wrote

  1. Two separate departments. The trading desk was zero sum.

  2. Yes they are lol. The gains and losses come purely at the expense of the counterparty. Liquidity and efficiency isn't relevant to whether the market is zero sum. This is like saying Texas holdem isn't zero sum because there's value in entertainment.


Fausterion18 t1_j6omllc wrote

Cool story, nothing you said is even remotely relevant to my post, which is the fire sale itself that Kevin spacey had so much trouble with was not morally wrong.

There is nothing "messed up" about trading, just like there's nothing wrong with poker. Otherwise why the fuck are you here? What they did is no different from what all of wsb does.


Fausterion18 t1_j6om8u1 wrote

They weren't investors, they were traders. From their perspective trading those were zero sum. Any gain they had was at the cost of the bank that traded with them.

Kinda like how leaps and synthetic longs are perfectly useful instruments for long term investing, but options trading is always zero sum.


Fausterion18 t1_j6lnzo4 wrote

Nothing the CEO did was morally wrong. Their counterparties were other investment banks, trading is a zero sum game.

Saying the fire sale was morally wrong is like saying bluffing other players in poker is morally wrong. Everybody in that movie was a shark, they just happened to be a smarter shark. What he did is no different from what people do every day on this sub - he bought and sold securities that he thought had a different true value than the current market price. That's literally what trading is!

The CEO is 100% that correct nothing they do could even slightly alter the course of the incoming economic shitstorm and all they can do is attempt to survive it. He did the right thing by fucking over the other sharks and giving his employees a fat severance.


Fausterion18 t1_j6lnkcc wrote

What ethics lol? All these IB guys are sharks, they just happened to eat the other sharks this time around.

It's not like their counterparties are grandma, it's big banks like Deutsch, Merrill, etc. What he did was sell securities that he thought was worth less than the current market price. No different from some wsber doing the exact same thing. This is literally what trading is.


Fausterion18 t1_j5q423q wrote

>If the company is doomed to fail regardless of leadership, then it should fail the quality of the CEO is irrelevant.

But you won't know which companies are doomed to fail until you try, and without compensation they wont try.

>If only shitty CEOs are going to run the bad companies, where do the good CEOs go once there are no longer good companies with CEO slots open? Either they’ll have to swallow their egos and take a lesser position or they’ll have to try to right a sinking ship in the hopes of a future payday.

They work a lower level executive position. Much better than trying to rescue a sinking ship with an uncertain chance of success and minimal pay until you succeed.

>The only way to get a companies as a whole to raise the pay of their works to something commensurate with the work being done by their employees is to tie the wages of the companies leadership to the workers wages and their bonuses to the companies success.
>We already have CEOs today making thousands of times the average workers pay running a company into the ground while getting huge bonuses because the stock is going up then getting massive golden parachutes when they leave. That needs to stop, and the only way to do that is to legislate it.
>I’m not saying that the CEO should get a pittance. Something in the 500-1000% the average wage should be plenty, and if you have a sliding scale for bonuses where the more workers your company has the higher percentage of the gross profits you’re allowed to receive as bonus, CEOs of top-tier companies will still be able to get massive paydays. There will always be people willing to take the job, and if it weeds out some shitty CEOs that are only doing it for the money, so be it. Those guys probably shouldn’t be CEOs anyway.

Like which companies?

Also, tying to gross profit is another hammer solution that doesn't work for a lot of companies. Growth companies for example rarely bring much of a profit during their growth phase, and yet leadership is extremely crucial during this period.


Fausterion18 t1_j5pvavs wrote

>They will if they think they can turn it around and get the big bonus options.

That's if they succeed, many companies are doomed to fail regardless of the best efforts of the leadership.

>You’re looking at a single company in a vacuum. If the same rules apply to everyone your options are be a CEO of a sinking ship, or don’t work. And if no established CEOs want to do it, someone new will jump in.

No, you'll just get all the shitty CEOs in the dying companies which will go into bankruptcy, afterwards someone competent may come sniffing around post chapter 11.


Fausterion18 t1_j5pl09b wrote

German and Japanese CEOs make similar amount of cash salary and bonuses as Americans, they just don't benefit from the American bull stock market that causes equity based compensation to balloon.


Also, they receive a lot of perks to make up for it.