Wednesday, November 11, 2009

Playing like Tiger Woods

Do you want to know why the Wall Street banks are back to giving away billion dollar bonuses? It's because they are "playing like Tiger Woods"! That's the claim of Daniel Gross in a Slate article.

Of course, Daniel Gross points out that the US government has redesigned the course to allow these financial "geniuses" to show off their "competence" and "skill"...
In the past year, taxpayers and government agencies have engineered optimal conditions for bankers to score. To use a metaphor bankers could understand (golf), by supporting markets, taking interest to zero, and providing legions of subsidies, the government has widened the fairways, enlarged the greens, and dug holes the size of bomb craters. Some bankers are playing the redesigned course like Tiger Woods. JPMorgan Chase and Goldman Sachs each earned more than $3 billion in the last quarter. But other huge banks are playing like Ted Knight's Judge Smails in Caddyshack. Citi scratched out a mere $101 million in earnings and suffered heavy credit losses, while Bank of America lost $1 billion. A similar dynamic is evident in the domestic auto industry. Cash for Clunkers and government support for auto lenders has helped prop up demand. In September, Ford saw sales rise 5 percent from September 2008, and the company gained market share. But sales at General Motors and Chrysler were off 45 percent and 42 percent, respectively, from a year before.
Go read the whole article, it is full of interesting facts and observations.

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