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Tuesday, September 23, 2008

Pay No Attention to the Man Behind the Screen...

That's one of my favourite lines from the Wizard of Oz, and boy, the past couple of weeks, it seems we have all taken a little trip to that far-away land.

So what's been happening? History, my friends, nothing short of history. The Affluenza pandemic is here.

It looks like the US has thrown in the towel on capitalism and is trying socialism on for size. Fannie Mae and Freddie Mac - socialized; Bear Stearns - socialized; AIG - socialized. And now Hank Paulson wants a blank cheque (or rather, a cheque written out to him) to socialize another $700,000,000,000 (that's what $700 billion actually looks like) of US assets, to be named later.

Paulson knows how to throw money around, make no mistake about it. When he was Chairman of Goldman Sachs, he made $38 million in 2004 alone. Nice. That was a 21% increase over his paltry 2003 salary. But he was a generous man and liked to share, so the average salary - I repeat, the average salary - at Goldman Sachs in 2004 was over $500,000. It was actually $521,000, but who really cares about the $21,000 when you're making that kind of dough. But they weren't really making it, were they? - it was all leveraged to the tune of about 30:1. So if you do the crude math that only I am capable of, it looks like the employees really made $17,366.67 on average. The rest was leverage "pretend" money. Problem is, they still received it as real money and they will still get to keep it.

Not that Goldman Sachs was alone. Wall Street banks paid out the following bonuses over the past eight years: 2000 - $19.5 billion; 2002 - $8.6 billion; 2003 - $15.8 billion; 2004 - $18.6 billion; 2005 - $21.5 billion; 2006 - $33.9 billion; 2007 - $33.2 billion. Hell, there's $151.1 billion right there!

If I were an American, I'd be ticked off as all get-out at the men (and they seem to be all men - haven't seen a woman as part of this mess yet) behind the screen....