Where is all of this leading…?

From time to time it is important for us to avoid interpreting the news and simply ask a few questions about what we are all reading. This past week provided such an opportunity, and we would like to address two articles that you may have seen via two prominent national news outlets:

Wall St. Bonuses to Top 2009

US Bank Legal Bills Exceed $100B

We find the cognitive dissidence between these two subjects to be stunning, but more importantly we ask – where is all of this leading?

We heard one response that caught our attention: “So the message being sent to the Wall Street crowd is… behave so badly and break so many rules that your actions cost the industry over $100B in legal fees… meanwhile, you will be rewarded with record compensation!”

It’s hard to argue with that kind of investor frustration!

These guys are paying themselves record bonuses for what… successfully cheating the system!?!

The business model for today’s “Too Big to Fail” banks seems to be:

1. Lie, cheat and steal to maximize profits.
2. Deal with regulators and pay the fine associated with action #1 (and don’t worry too much about it… the profit made FAR exceeds the fine paid).
3. Rinse, Lather, Repeat.

It seems these TBTF banks believe the general public is asleep at the wheel and that they are free to do whatever they want.

Does anyone else have a problem with this? And what can we do to protect ourselves in the event that we care?

This is a discussion we love having with our clients, and if these questions reflect your feelings or frustrations, please know that we would welcome your comments, your questions – and especially a call to talk in more depth about our best advice in light of this news.

Categorized in: Blog

This post was written by Conscient Capital