Will the 80's days ever come about again?
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Re: Will the 80's days ever come about again?Then you have a sad, sad, sad life and probably shouldn't be parading around like you're better than everyone else.(Original post by Radeon.2009)
What if one enjoys spending money? -
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Re: Will the 80's days ever come about again?I really don't get your argument. Enjoying treating yourself = Living a sad life? Good lord. Get off your high horse of poverty mate.(Original post by Teenage Pirate)
Then you have a sad, sad, sad life and probably shouldn't be parading around like you're better than everyone else.
Difference is a good banker's work is scalable while a doctor's is not. A doctor can only do one surgery an hour, but a good banker can always do bigger deals, make bigger trades etc. That scale is what increases his value.(Original post by Teenage Pirate)
This is stupid. You're saying that banker compensation is warranted because the free market allows them to be paid that much ("adding value to the firm") and because they play such an essential role in the economy.
If the market for let's say healthcare was as free as the market for financial services, how much do you think doctors would be getting paid? Probably a ****load more than bankers. Bankers don't get paid more than doctors "because they're worth more" but because a) they work in an industry that receives a large implicit subsidy from the government and b) because their industry is not deemed as crucial as healthcare so the government doesn't step in to drive prices down.
edit: as for the value creation, how does the fact that every now and then the financial sector blows up and makes losses equivalent to many times the previous profits tie in to this?
And could you clarify your point re: doctors getting paid a ****load more in a free market? I don't think that's true. Exactly what mechanism would drive this much higher pay for them? Patients and insurance companies would not be able to afford it, which would reduce demand for their services.
When did you turn into a socialist? Those banking rejections must have hit you real hard ehn, coz you use to be one of the most active ones in the spring / summer internship threads, and now it seems you join the banker bashing every opportunity you get. Sour grapes man. It's sad. -
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Re: Will the 80's days ever come about again?The high salaries of investment bankers will always be there, it is whether you could get there or not that is the different story, too damn many people get in there these days thinking they will all make a million quid a year.
As for the excitement of the City in the 80s ever coming back again, the simple answer is no and it will never return again as more and more regulations come into place. Also London's position as the financial capital of the world is largely numbered especially as the current government and presumably the ones in future attempts to "rebalance the economy" and banks will always continue to be "toxic" in the eyes and minds of the public. -
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Re: Will the 80's days ever come about again?Reduce demand for their services? Really? Basically you're suggesting that if the price of water suddenly increased in price say 500 times, people would just think 'yeah, not worth it anymore, I'll pass on water for the foreseeable future now'.(Original post by Radeon.2009)
I really don't get your argument. Enjoying treating yourself = Living a sad life? Good lord. Get off your high horse of poverty mate.
Difference is a good banker's work is scalable while a doctor's is not. A doctor can only do one surgery an hour, but a good banker can always do bigger deals, make bigger trades etc. That scale is what increases his value.
And could you clarify your point re: doctors getting paid a ****load more in a free market? I don't think that's true. Exactly what mechanism would drive this much higher pay for them? Patients and insurance companies would not be able to afford it, which would reduce demand for their services.
When did you turn into a socialist? Those banking rejections must have hit you real hard ehn, coz you use to be one of the most active ones in the spring / summer internship threads, and now it seems you join the banker bashing every opportunity you get. Sour grapes man. It's sad.
By the way, just Google up some more niche doctoring fields like neurosurgery, you're going to see they don't get paid that little as you think, especially if you think about it in £/hour terms.
From where it follows that surely the work of a neurosurgeon is valued a hell of a lot more, considering the 'low scale' of his work as you say as opposed to a good banker and very similar pay on average, makes sense?
If you really want to see some scale. Think about research carried out and findings by pharmaceutical companies.
And I'm not bashing IB, I'm just saying people shouldn't go overboard with the skewed idea that working in finance entitles one to some superiority over the rest (e.g. doctors), that face even more pressure, work just as hard and so on.Last edited by TomasK; 17-06-2012 at 09:12. -
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Re: Will the 80's days ever come about again?(Original post by Teenage Pirate)
edit: as for the value creation, how does the fact that every now and then the financial sector blows up and makes losses equivalent to many times the previous profits tie in to this?
Read this everyone. Taking into account boom and bust, the financial sector adds no monetary value to society. -
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Re: Will the 80's days ever come about again?Uh this is a pretty huge generalisation to be throwing around as fact.(Original post by tkane)
Read this everyone. Taking into account boom and bust, the financial sector adds no monetary value to society.
Not to mention that most people will believe this right off the bat because of a poor understanding of
a) how a banks work and how they (in normal circumstances) facilitate liquidity and credit
b) the plethora of non-financial factors that contributed to things such as Lehmans and Sovereign criss
c) Tail-risk
Forgive me but until I see some empirical research to back up your statement, I remain highly sceptical. -
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Re: Will the 80's days ever come about again?I hope you know that the financial sector is pretty much what is keeping the UK economy alive. It runs a significant trade deficit and without the financial sector redeeming the deficit the economy would struggle even more then it is at this moment.(Original post by tkane)
Read this everyone. Taking into account boom and bust, the financial sector adds no monetary value to society. -
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Re: Will the 80's days ever come about again?(Original post by Breadster™)
Uh this is a pretty huge generalisation to be throwing around as fact.
Not to mention that most people will believe this right off the bat because of a poor understanding of
a) how a banks work and how they (in normal circumstances) facilitate liquidity and credit
b) the plethora of non-financial factors that contributed to things such as Lehmans and Sovereign criss
c) Tail-risk
Forgive me but until I see some empirical research to back up your statement, I remain highly sceptical.
Tax receipts
According to the OBR, in 2010-11, the financial sector accounted for around 7% or £35.7 billion of Government receipts once the bank payroll tax and bank levy are included. Without the bank payroll tax and bank levy, the figure was around 6% or £32.2 billion.
The figures above, from the OBR, include income taxes, national insurance contributions and corporation taxes. This is a narrow measure of contribution to tax revenue, compared to that used by other sources, which often include other components when measuring the financial sector’s contribution to tax revenue, such as VAT.
The City of London has published estimates on financial sector tax receipts for 2010-11. This is based on research by PricewaterhouseCoopers (PWC), which collected data from financial services companies. The PWC research uses a broader measure of tax contributions compared to the OBR. As well as income taxes, national insurance contributions and corporation taxes, this data includes VAT, business rates and other taxes. It includes both taxes paid by the sector and taxes collected on behalf of Government, for example, tax deducted from interest paid to customers by retail banks11. This measure suggests that the financial sector contributed £63bn or 12.1% of total government receipts in 2010-11.
Now the below table outlines the direct liability to the taxpayer as a result of the various bailouts. Of course it does not include the cost to the tax payer of the recession, schemes to kickstart the housing market and the non-measurable pain to the general populous of government cuts and job losses....all of which can be attributed to the actions of the financial sector and its near collapse in 2008. Don't get me started on how QE is fu*cking over the next couple of generations.
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Re: Will the 80's days ever come about again?Read the above, the financial industry makes up around a tenth of UK tax revenue. There is a whole other 90% which makes up the UK economy. Don't get delusional about the industry.(Original post by Tsunami2011)
I hope you know that the financial sector is pretty much what is keeping the UK economy alive. It runs a significant trade deficit and without the financial sector redeeming the deficit the economy would struggle even more then it is at this moment. -
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Re: Will the 80's days ever come about again?(Original post by Tara_99)
Does anyone wish that the City would return to the days of the 80's? When Equities exploded and millionares were born over night. Many were able to to retire in their early 30's and lived it up in their 20's.
We are the future of the City and beleive it or not but we can dictate the markets and the economy, lets bloody go for it and bring the City back! Screw the politicians and general public lets make it happen!!!
It sounds more like a movie introduction than reality. If you want to relive the days of market greed then watch Wall Street. Too Big to Fail is also another good film. -
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Re: Will the 80's days ever come about again?"enjoy treating yourself". it's ok to enjoy things if you actually enjoy them and it's not some superficial status thing, it's sad to enjoy spending money for the sake of spending money which was what you originally said. I wish people would realize that it's probably a lot more rewarding to live life like Warren Buffet instead of Roman Abramovich (one has class, one doesn't).(Original post by Radeon.2009)
I really don't get your argument. Enjoying treating yourself = Living a sad life? Good lord. Get off your high horse of poverty mate.
Difference is a good banker's work is scalable while a doctor's is not. A doctor can only do one surgery an hour, but a good banker can always do bigger deals, make bigger trades etc. That scale is what increases his value.
And could you clarify your point re: doctors getting paid a ****load more in a free market? I don't think that's true. Exactly what mechanism would drive this much higher pay for them? Patients and insurance companies would not be able to afford it, which would reduce demand for their services.
When did you turn into a socialist? Those banking rejections must have hit you real hard ehn, coz you use to be one of the most active ones in the spring / summer internship threads, and now it seems you join the banker bashing every opportunity you get. Sour grapes man. It's sad.
How is this "banker bashing?" I want the financial sector to thrive, I think it adds value to the economy but I don't think the attitude that a lot of individuals going into the sector have is healthy (which is what this thread is about btw). It's a very entitled "we add value so we deserve x pay" attitude by a bunch of people who join and actually add no value. (analyst/assoc level). And for all the value adding that the financial sector does, they also get rewarded for massive wealth destruction (ie. M&A advice in general).
More on that: You're not going to see me complain about a hedge fund manager getting paid $1bn for making a lot of money for his clients and himself, even though I might discount it as luck or call his clients idiots for paying his fee - he runs his private company, he can pay his employees whatever he wants. He also doesn't receive implicit subsidies etc. But you keep on talking about banking pay like it's directly measurable like that: who bought in the $5m fee on a deal? Was it the product team banker? Was it the industry group banker? Was it the head of team who was involved in the meeting? Was it the analysts who worked on a pitch? Was it the name of the bank? Or when the bank does some sort of trade, who deserves the credit? Was it the strategy team? The trader who executed it? The sales people who found a counterparty at a good price? Operations making sure everything flows smoothly? Or maybe it was the bank's shareholders who put in enough capital to allow the bank to have the credit rating to make this arbitrage "successful?"
edit: to sort of clarify my point here: I think the the bank's shareholders and the tax payer are entitled to a larger share of the profits here, individuals a much smaller share. and compensation should be long term if there is systemic risk involved, but that's another argument and very difficult to measure...
What to know what mechanism would drive doctor pay? People not wanting to die. It's about as inelastic as demand for a service gets. The fact that it's very difficult to become a doctor, especially a specialist, regulates supply in the industry - a control mechanism which doesn't exist in financial services to the same extent. Look at how expensive private surgery, medical equipment etc are (in the US), and think about how that would work if government subsidized alternatives were removed.
As for your sour grapes, I've #1) worked longer in financial services than you, #2) had an offer this year and #3) decided that I'd explore an alternative route for one more year instead of taking that offer. Funny how actually working (try it) gives you some perspective and makes you want to actually work in a role where you see yourself developing.
There - long post.Last edited by Teenage Pirate; 17-06-2012 at 14:07. -
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Re: Will the 80's days ever come about again?You're blindly defending the financial sector. Sure, it can be good for the economy - but stop treating it as if it were something completely different from any other sector in the economy. It needs extra regulation (as do some other industries) but it doesn't have some magical "value adding" wand that somehow works better than the value adding abilities of any other industry.
Maybe you're not happy that you made the wrong choice in choosing an industry to blindly chase for money? Tech seems to be really hot right now, I don't think it's too late to jump ship? The financial sector needs fewer people like you... -
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Re: Will the 80's days ever come about again?Right. But herein you are confusing demand with need. Economics 101. Price increases would lead to a reduced demand for healthcare given that people would not be able to afford it even if the 'need' for healthcare services is inelastic. If you want a free market example like you mentioned, look at the US and see how people with no health insurance live. These guys don't go to the doctor or hospitals unless they absolutely have to (e.g. arm physically falling off etc) and stay at home and deal with less life threatening medical issues themselves using painkillers and other bull**** remedies.(Original post by Teenage Pirate)
What to know what mechanism would drive doctor pay? People not wanting to die. It's about as inelastic as demand for a service gets. The fact that it's very difficult to become a doctor, especially a specialist, regulates supply in the industry - a control mechanism which doesn't exist in financial services to the same extent. Look at how expensive private surgery, medical equipment etc are (in the US), and think about how that would work if government subsidized alternatives were removed.
You're not very smart are ya? No wonder you got rejected by finance. Your analysis is focused solely on the pricing side without consideration of the significant drop in demand that would arise if all doctors charged higher prices.Last edited by Radeon.2009; 17-06-2012 at 14:26. -
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Re: Will the 80's days ever come about again?Right. Finance directly makes up 10%(Original post by tkane)
Read the above, the financial industry makes up around a tenth of UK tax revenue. There is a whole other 90% which makes up the UK economy. Don't get delusional about the industry.
And the other 90% includes accounting, legal services, PR, and other industries which rely on the finance sector as well. The net contribution the finance sector makes if you include the dependent industries would be way more than 10%. -
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Re: Will the 80's days ever come about again?Funny thing how you mention the US as an example as to how demand for medical services is reduced and how that should drive down doctor salaries(Original post by Radeon.2009)
Right. But herein you are confusing demand with need. Economics 101. Price increases would lead to a reduced demand for healthcare given that people would not be able to afford it even if the 'need' for healthcare services is inelastic. If you want a free market example like you mentioned, look at the US and see how people with no health insurance live. These guys don't go to the doctor or hospitals unless they absolutely have to (e.g. arm physically falling off etc) and stay at home and deal with less life threatening medical issues themselves using painkillers and other bull**** remedies.
You're not very smart are ya? No wonder you got rejected by finance. Your analysis is focused solely on the pricing side without consideration of the significant drop in demand that would arise if all doctors charged higher prices.
http://economix.blogs.nytimes.com/20...ountries-make/
whoops.
No one gives a **** about the poor in this context, the fact that the rich can pay means they do pay, and they pay a lot because there is a lack of realistic alternatives for the rich.
edit: your argument is like "Apple shouldn't be profitable because its products are too unaffordable for 90% of the world"Last edited by Teenage Pirate; 17-06-2012 at 14:42. -
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Re: Will the 80's days ever come about again?By that same logic the finance sector wouldn't exist without the 90% of the economy and as such it's net contribution should be added to them, right?(Original post by Radeon.2009)
Right. Finance directly makes up 10%
And the other 90% includes accounting, legal services, PR, and other industries which rely on the finance sector as well. The net contribution the finance sector makes if you include the dependent industries would be way more than 10%.
Buy a clue. -
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Re: Will the 80's days ever come about again?Erm how does that chart help you? You said doctors could make just as much as bankers if not for regulation keeping their prices down and I disagreed. Then you try to 'disprove' me by linking to a chart showing US doctors making 150k?(Original post by Teenage Pirate)
Funny thing how you mention the US as an example as to how demand for medical services is reduced and how that should drive down doctor salaries
http://economix.blogs.nytimes.com/20...ountries-make/
whoops.
No one gives a **** about the poor in this context, the fact that the rich can pay means they do pay, and they pay a lot because there is a lack of realistic alternatives for the rich.
edit: your argument is like "Apple shouldn't be profitable because its products are too unaffordable for 90% of the world"
Let's see what happens if doctor's increase their prices so they start making millions
1) Less demand from patients = questionable overall benefit to a doctor's annual intake
2) More competition as more people enter the sector (including migrants) and drive prices down
And my earlier point still stands. A doctor's wage is limited because the value a doctor can provide is constrained by the fact that they can't do multiple examinations / surgeries at once, and that the skills required for a specific treatment are not dependent on the beneficiaries.
That is not the case with banks. A $50bn deal will earn a bank much more than a $1bn deal even if the work involved is the same. Your arguments suck and seem to go against the basic fundamentals of economic forces.Last edited by Radeon.2009; 17-06-2012 at 14:53. -
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Re: Will the 80's days ever come about again?As a 19 year old summer intern no doubt. Clearly you a wealth of knowledge and experience.(Original post by Tara_99)
The fact that I am working in it atm?
Put the kettle on love.
