Friday, September 25, 2009

A New Power Center for the New World Order

The White House press release says it all:
The G20 leaders reached a historic agreement to put the G20 at the centre of their efforts to work together to build a durable recovery while avoiding the financial fragilities that led to the crisis.
According to FT, a communiqué will be issued that will say: “We designate the G20 to be the premier forum for our international economic cooperation.”

FT continues:
The communiqué, a substantial document of more than 20 pages, seen by the Financial Times, has familiar language on reforms to the financial system and bankers’ bonuses.

It will endorse a report from the Financial Stability Board that calls for bonuses to be linked to the long-term success of financial companies and not excessive risk taking. It will outlaw multi-year bonuses, call for bonus payments to be deferred and establish mechanisms for clawing back bonuses paid if a company subsequently fails. There will not, however, be a formal cap on individual bankers’ bonuses.

Instead, the communiqué will propose “limiting bonuses as a percentage of total net revenues” when it is inconsistent with a bank’s sound capital base.
An interesting part of this communiqué is the continued focus on bankers' pay. Remember, the Financial Stability Forum is headed by Mario Draghi, who Geithner met with earlier this week. None of this communiqué is a surprise to Geithner.

So what is all this focus on bankers' bonuses about, apparently with the endorsement of top insiders such as Geithner and Draghi? Draghi, being a former Goldman Sachs man and Geithner being a long-term tool of Wall Street, what is going on? This looks like it has top level Wall Street endorsement. Endorsement of a limitation on Wall Street bonuses by the Wall Street elite, WTF? The only conclusion that makes any sense is the argument developed by Robert Murphy, How to Predict the Coming Bank Pay Regulation, top insiders are trying to limit pay to lower echelon players. The pigs at the trough are trying to muscle out nursery pigs.


  1. U.S. Bank CEO pay dwarfs rest of world:

    The drive to the lowest global common denominator on worker pay/benefits, regulations and taxes has two notable exceptions. Executive pay and political donations.

  2. I don't remember being asked if I wanted the G20 to do anything on my behalf, or my fellow Americans.

    The good thing about centralized government is that they all have to be in the same location to "accomplish" anything.

  3. I think it's just an easy thing to focus on. It doesn't really limit banks, doesn't take a lot of thought or understanding about banking, and the public latched on to it so well before. They want to blame bankers' pay and then act like they did something about the crisis.

  4. They're only in control if you let them be. It's still all up to you. Roll over and play dead or Roll over and make them dead.