Wealth 85 richest equals wealth 3.5 billion poorest.

[mister dog]

Based on the deterioration of his arguments into attacks ranging from "why do we care about details" to just plain old insults, I doubt it.

The whole thread reminds me of a University Freshman that just started taking a social studies class and realized how much variance there is in wealth and power... and it just isn't fair.

Listen man i state my opinion do with it what you want; i am not here to desperately get the better hand above other people like most of you do.

I think the extra 20 million bonus (yes yes with conditions); is way too much, if you think that's fine that's your opinion and i applaud it 👍

A forum should serve the purpose to share mindsets and to learn from each others views, not to prove you are right and the others are wrong IMO...

That probably explains why I had to edit your post for a swear filter bypass.

Go to bed and get some rest before your tired fingers get you into trouble.

My apologies for using the dirty term for the word feces...

 

[Joel]

The whole thread reminds me of a University Freshman that just started taking a social studies class and realized how much variance there is in wealth and power... and it just isn't fair.

Well yeah, and that's really the core of it IMO. It just smacks of a misunderstanding of how wealth is created, the core of it seems to come down this idea that there's a fixed pie of wealth and Bill Gates took half of it. Just look at how many times it's had to be explained that the J.P. Morgan exec's salary included 18.5M in stock options and only 1.5M in salary. I don't think he understands the difference, otherwise he wouldn't keep being cheeky about "20M".

It's funny, because people come into these threads admitting they don't know the nuts and bolts of the economics involved but they still continue to just throw out "the 1%" as if it's an argument in and of itself, and when presented with fact based arguments just claim it's all "opinion" and stick their fingers in their ears because of a vague notion of "fairness". All taking place on the internet in a first world country, and argument between some of the richest and most privileged people in the world.

Listen man i state my opinion do with it what you want; i am not here to desperately get the better hand above other people like most of you do.

I think the extra 20 million bonus (yes yes with conditions); is way too much, if you think that's fine that's your opinion and i applaud it 👍

Do you even understand what stock options mean?

Who determines how much is too much?

 

[mister dog]

Do you even understand what stock options mean?

Who determines how much is too much?

Ok you seem to understand economics better than me; give me the worst case scenario and the best case scenario of what can happen with his 18.5 million dollars in stock options. Thanks in advance.

 

[Tornado]

He's the CEO of an investment bank. Ask Dick Fuld what the worst case scenario could be when you're paid almost exclusively in stock options for the company you run and you run it incompetently.

 

[Joel]

Ok you seem to understand economics better than me; give me the worst case scenario and the best case scenario of what can happen with his 18.5 million dollars in stock options. Thanks in advance.

Best case scenario is his decision making leads to the company being successful and their stock having a higher value, which increases the value of the company and how much his stock would be worth. Worst case scenario for him is he screws up, the company goes in the tank, and his stock (as well as everyone else's) drops.

What it means is that he was given 18.5M of stock in the company as of a certain date. What happens to it after is in a lot of ways up to him, hence the logic in using at as compensation as it gives him a personal stake in the results of his decisions.

 

[mister dog]

Best case scenario is his decision making leads to the company being successful and their stock having a higher value, which increases the value of the company and how much his stock would be worth. Worst case scenario for him is he screws up, the company goes in the tank, and his stock (as well as everyone else's) drops.

So if all goes well, and in the end he is able to cash in on those stocks he has the 18.5 million (minus taxes) in his pockets no? I don't see how this belittles my point; yes there are variables to the game but when people here try to make me look like an idiot again, hammering on those variables they are ignoring i have a right to say he might top off on 20 million and that I find this too much for a: one person to receive as a bonus, and b: especially seeing JP morgan has been in the news negatively last year.

Anyway thanks for answering.

 

[Joel]

So if all goes well, and in the end he is able to cash in on those stocks he has the 18.5 million (minus taxes) in his pockets no? I don't see how this belittles my point; yes there are variables to the game but when people here try to make me look like an idiot again, hammering on those variables

Well yeah, but that's a pretty big "if". It's not the same as getting 20 million dollars no matter how much you want to spin it. That's the thing, where you say I'm being a stickler for the detail I'm seeing someone who doesn't understand the basics of our economic system trying to say it's all wrong. It's not about "hammering on those variables", it's about it being a completely different situation than a 20 million dollar bonus. It's a 1.5m bonus with 18.5M contingent on him making good decisions. Not to mention that if he turns his 18.5 into 25M it's to the benefit of the entire company he works for. That's what stock options are about, if he does well it's mutually beneficial. If he does poorly he feels the hit too.

they are ignoring i have a right to say he might top off on 20 million and that I find this too much for a: one person to receive as a bonus, and b: especially seeing JP morgan has been in the news negatively last year.

Nobody's ignoring your right to say anything. It's a public forum, say what you want and people have the right to challenge you. I'm challenging this viewpoint because it's coming pervasive and "eat the rich" is the new "they took our jobs".

As for your A), that's the going rate for top tier executives these days and if he was unhappy with his level of compensation he could be hired by a competing firm.

 

[Crash]

I hardly think you can compare a PS4 that costs 400 bucks, to a Bugatti Veyron or a luxury Yacht as a ridiculously priced vanity item.

To a starving child in Africa, yes, your PS3 or PS4 is a ridiculously priced vanity item.

You keep going on and on about how people in third world countries are being exploited. You (and it seems like many others as well) forget that labor is subject to market forces as well. There is a demand for labor (by a company), and there is a supply for labor (provided by individuals). In a situation where people are working under their own free will, the supply and the demand have reached a mutually agreeable and beneficial, equilibrium "price" (which is manifested in salary). For the amount and type of labor, the supply and demand forces in a labor market dictates pay. If a company is paying under market, no one would work at that company, and the company would be forced to increase pay in order to attract people. On the other hand, if a person is demanding pay in excess of market, then no company will hire them, and would instead hire others with the similar skills who are not demanding excess pay. If both parties freely agree to something, then it is not possible for one to be "exploited."

The only caveat is if people are not working under their free will (ie. various forms of slavery or forced labor), and/or the market is not free.

This all intuitively makes sense. A doctor gets paid a lot more than a fast food worker; that's because the skills of a doctor is much more difficult to attain, and thus, much rarer than the skills of a fast food worker. With a scarcer supply, the cost of getting a doctor's skills is going to be higher.

Not to mention, if you look at many sweatshops, people work there willingly. To them, it's better to work there and be paid what little wage they get than what they otherwise would be able to achieve economically. If the alternatives are economically better, than no one would work in the sweatshops.

A forum should serve the purpose to share mindsets and to learn from each others views, not to prove you are right and the others are wrong IMO...

And sticking your fingers in your ears then degenerating into insults instead of thinking logically and addressing other people's points when a discussion does not go your way supports what you just said how?

 

[mister dog]

Well yeah, but that's a pretty big "if". It's not the same as getting 20 million dollars no matter how much you want to spin it. That's the thing, where you say I'm being a stickler for the detail I'm seeing someone who doesn't understand the basics of our economic system trying to say it's all wrong. It's not about "hammering on those variables", it's about it being a completely different situation than a 20 million dollar bonus. It's a 1.5m bonus with 18.5M contingent on him making good decisions. Not to mention that if he turns his 18.5 into 25M it's to the benefit of the entire company he works for. That's what stock options are about, if he does well it's mutually beneficial. If he does poorly he feels the hit too.

I already knew the basics about stock options, before I asked you to explain the best/worse case scenario
You see the tactic of trying to marginalize the 20 million dollar aspect, because there are conditions put upon it through those stock options, does not take away the fact that he might very well add 20 million to his bank account in the end. So the efforts to make me look like I don't have a clue when i say that amount is too much, because of these extra factors, is not very well grounded.

Again what I notice time and time again in this part of the forum is this:

Protip: You can win every exchange just by being one level more precise than whoever talked last. Eventually, you'll defeat all conversational opponents and stand alone.

Nobody's ignoring your right to say anything. It's a public forum, say what you want and people have the right to challenge you. I'm challenging this viewpoint because it's coming pervasive and "eat the rich" is the new "they took our jobs".
As for your A), that's the going rate for top tier executives these days and if he was unhappy with his level of compensation he could be hired by a competing firm.

I think this being the going rate for executives is scandalous; especially since the whole industry is largely based on cost cutting and budgeting these days because of the financial crisis (or that's what they say when normal working folk expect a raise).

To a starving child in Africa, yes, your PS3 or PS4 is a ridiculously priced vanity item.

You keep going on and on about how people in third world countries are being exploited. You (and it seems like many others as well) forget that labor is subject to market forces as well. There is a demand for labor (by a company), and there is a supply for labor (provided by individuals). In a situation where people are working under their own free will, the supply and the demand have reached a mutually agreeable and beneficial, equilibrium "price" (which is manifested in salary). For the amount and type of labor, the supply and demand forces in a labor market dictates pay. If a company is paying under market, no one would work at that company, and the company would be forced to increase pay in order to attract people. On the other hand, if a person is demanding pay in excess of market, then no company will hire them, and would instead hire others with the similar skills who are not demanding excess pay. If both parties freely agree to something, then it is not possible for one to be "exploited."

The only caveat is if people are not working under their free will (ie. various forms of slavery or forced labor), and/or the market is not free.

This all intuitively makes sense. A doctor gets paid a lot more than a fast food worker; that's because the skills of a doctor is much more difficult to attain, and thus, much rarer than the skills of a fast food worker. With a scarcer supply, the cost of getting a doctor's skills is going to be higher.

Not to mention, if you look at many sweatshops, people work there willingly. To them, it's better to work there and be paid what little wage they get than what they otherwise would be able to achieve economically. If the alternatives are economically better, than no one would work in the sweatshops.

You basically summed up the supply/demand factor for the job market, which is indeed true economics work like that if the demand for jobs is high in a certain region, you can pay these people peanuts and force them to work exhausting hours in bad conditions. It does however not justify businesses taking grave advantage of this, in order to redistribute the money gained from these practices into the pockets of their board members.
Note; I am not saying that this applies to those 85 richest; and all of them got rich this way.

And sticking your fingers in your ears then degenerating into insults instead of thinking logically and addressing other people's points when a discussion does not go your way supports what you just said how?

Not sticking my fingers in my ears; I'm always willing to accept a good argument as long as people stay reasonable. Also If you'd read up again above you'll see people were starting to insult my intellect, I mostly have to react on provocations the whole time sadly.

 

[Famine]

You see the tactic of trying to marginalize the 20 million dollar aspect, because there are conditions put upon it through those stock options, does not take away the fact that he might very well add 20 million to his bank account in the end.

It might be 200 million. It might be zero.

So the efforts to make me look like I don't have a clue when i say that amount is too much, because of these extra factors, is not very well grounded.

Actually, it wasn't because you were including the present value of stock options, but because you haven't clearly said what "too much" means.

Again what I notice time and time again in this part of the forum is this:

It's almost like people care about the details that make up the big picture or something.

I think this being the going rate for executives is scandalous; especially since the whole industry is largely based on cost cutting and budgeting these days because of the financial crisis (or that's what they say when normal working folk expect a raise).

You don't make money buy cutting costs. You save money by cutting costs. To make money you need to make a product and sell it.

Not sticking my fingers in my ears; I'm always willing to accept a good argument as long as people stay reasonable.

Then you'll have no problem answering the questions I put to you yesterday.

 

[mister dog]

Then you'll have no problem answering the questions I put to you yesterday.

You mean the "did i give to charity", and "how does a CEO become a CEO" ones?

 

[Famine]

And they got to be CEOs... how? Were they born as CEOs?

I answered the second one for you. It's "no".

 

[mister dog]

I answered the second one for you. It's "no".

And if you are desperate for the first answer; it's yes. I don't have much money but i give some to beggars on the street on a regular bases. Happy now? You are gonna compare me to the 85 wealthiest people on earth with this shocking revealment?

 

[Famine]

The answer to the question "And they got to be CEOs... how?" is "Yes"?

Whut?

 

[Dotini]

To the best of my knowledge, the path to CEO starts with being white, coming from an elite family, and graduating from a US east coast Ivy League school or other elite business college.

 

[Roger the Horse]

In general it does. There will always be exceptions, and the being white factor is far less relevant now than it has been in the past, but overall the majority of people who find themselves in positions in which they earn large extremely amounts of money do come from at least somewhat wealthy backgrounds, although "elite family" might be pushing it.

In fact, CEO isn't necessarily the best example in this day and age, when one looks into it there other positions of power which are far more likely to be held by those from wealthy background's than CEOs, a fair few of them, through a combination of good luck and judgement, have made their way to the top from relative poverty (although I doubt you'll find very many who have made their way to the top from absolute poverty), while in some other high paying sectors (there was a big spreadsheet somewhere comparing the typical backgrounds of individuals working in various different positions, which was quite interesting.) the vast majority of people in those positions were privately educated, which, to some extent, is a sign that their parents weren't exactly poor.

 

[Famine]

I'm just scratching my head trying to think of the people in the Wealthiest Brit list who went to an Ivy League school. It certainly wasn't the top two business men, Laskhmi Mittal or SP Hinduja - neither of whom are white either.

 

[Roger the Horse]

I'm guessing more of the people on the wealthiest Brit list went either to Oxbridge, the LSE, or a Russell Group university?

 

[Famine]

Mittal was Indian educated. Hinduja I'm not sure about, though his name suggests a similar background.

 

[Ibonibo]

The problems are not CEO's or stock, or stock holders.

Stocks are fine, as are the holders, they believe in a company and invest in it.
The problem are other financial products, like playing with insurances of stocks options.
The problem are people too dumb, complaining later the goverment for not protecting their assets on high risk products.
The problem are financial products that are in a legal grey area but certainly in an immoral area.
The problem are lobbiest and dumb influancial politicans.
The problem are corrupt people, either by power or money
....

Working in Germany full time for 1€/hour is no free market, it's modern legalized slavery. Instored by the social party, which also tied in Gazprom tightly to Germany. The chancelor of that time (Schröder) now works for Gazprom on a million payed job. Yeay free market

Thinking we are still in a free market, need to rethink. Every law protecting big companies, every subvention is a brake or imbalance to a free market. This free market only exists in theory (anymore)

"too big to fail" BS
"if the Euro fails, EU fails" Merkel. BS
We all heard those fear inducing speeches by our leaders, only to justify spending our money on rich people high risk assets.
Look up who bought the Leeman Brothers failed stocks and how much they are worth today. Did one of the screwed investors will see one dime of that...
The bankers laughed their ass off as we gave them tax money for their buisnesses.
....


On Mittal, while I think it's a good company, and Mittal is a good leader for it, his origin story is not overly "good samaritan" (aka Goldman Sachs relation)

And on the "people in sweatjobs are happy to work", Foxxcon is a overskewed subject, but I think people would not jump to their deaths if they are happy....


It's a subject so complicated and complex it could go on for hours.
Either every people on the planet would need to wake up (what ware the chances)
Or you need to try to make it yourself to the part of the people who profit from this conditons we live in. It's achievable while staying a good human.

 

[Dotini]

The bankers laughed their ass off as we gave them tax money for their (failing but too-big-to-fail) businesses.

I adore this absolutely true and hilarious statement! They say the global system would have collapsed if "we" didn't, and furthermore, all our institutions such as the Fed, Wall Street, elected government, academia and media agreed with it. Our system is rock solid and sewn up tight; it cannot fail.

 

[niky]

And how many people commit suicide outside of sweatshops?

Many third worlders agree to work in sweatshops, engage in prostitution, work as illegal immigrants or agree to be drug mules because for them, the alternative is much worse.

The idyllic dream of all the poor people in the world tilling soil instead of acting as wage slaves for greedy multinationals crumbles in the face of the issue that many third world farmers simply cannot support their families with the meager earnings from farming.

-

*This is not to say that sweatshops are nice or even legal. It's just that for ones that don't use outright slave labour (ergo, the ones owned by greedy multinationals who are answerable to international law and their own stockholders), those workers are there because they prefer this to the alternative.

 

[Ibonibo]

There are different kinds of sweatshops. Totally agree.

Thing is though, those big international companies rarely have a direct engagement with the workers; that is done via a third, fourth,... company. We make the connection between Foxconn and Apple. But the workers there work for Foxconn not for Apple. (Which again is due to legal chinese policies,,...and on an other peice of paper)
But instead of 14 hours shift for 1 worker, 2 could make enough money with 7 hours (over simplified exemple).

A good exemple for "slavery" induced work by international companies, is Qatar and the football world cup. They work for the Fifa under an interim company so the FIFA can deny all allegations of slavery, bad work conditions,....
Now you could say, if it's that bad, the workers could just quit. Well common practice in those conditions is, that when they could quit, they wouldn't see a dime for the work already done. But more importantly is they can't quit because the interim company "confiscates" the Id or Passport, so they can't even leave.
But then we can't blame the FIFA as they state it's an interim firm, and then they play dumb as if they wouldn't know....

 

[Dotini]

Pity the man who want to withdraw a few thousand pounds from his savings account.
http://www.bbc.co.uk/news/business-25861717

Apparently there is a wave of fear at the moment of a bank run which means your money cannot be withdrawn except upon permission of the bank.

Some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it, the BBC has learnt.

Listeners have told Radio 4's Money Box they were stopped from withdrawing amounts ranging from £5,000 to £10,000.

HSBC admitted it has not informed customers of the change in policy, which was implemented in November.

The bank says it has now changed its guidance to staff.

New rules
Stephen Cotton went to his local HSBC branch this month to withdraw £7,000 from his instant access savings account to pay back a loan from his mother.

A year before, he had withdrawn a larger sum in cash from HSBC without a problem.

But this time it was different, as he told Money Box: "When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved."

 

[Pupik]

Pity the man who want to withdraw a few thousand pounds from his savings account.

That's hardly abnormal; banks rarely carry large amounts of actual specie. Outside of typical "pay days" (Thursday and Friday), banks keep very little actual legal tender on the premises; maybe $10,000 or less at any given moment. I'm sure there's some upscale banks which might have significant funds available, but your average bank branch rarely has enough cash to buy even the cheapest new car.

 

[Dotini]

A bank run in London?
http://www.marketoracle.co.uk/Article44121.html

 

[Famine]

Banks have always required advance notice for sums over £3,000 to my knowledge.

 

[Dotini]

The libertarian Ludwig von Mises Institute weighs in on the "quasi" bank run.
http://bastiat.mises.org/2014/01/a-quasi-bank-run-in-motion/


Now reports of bank runs in China.
http://www.zerohedge.com/news/2014-01-23/china-bank-run-beginning-farmers-co-op-unable-pay-depositors

 

[BobK]

Banks have always required advance notice for sums over £3,000 to my knowledge.

There is a vast gulf between requiring advance notice and demanding to know what you want your money for, though.

 

[Dotini]

http://iacknowledge.net/hsbc-bank-on-verge-of-collapse-second-major-banking-crash-imminent/

"HSBC is scrambling to manage a seemingly terminal liquidity crisis (a lack of hard cash) that could see the bank become the next Northern Rock – and trigger a bank crash. The analyst’s advice is for shareholders to sell HSBC investments, and customers to move their accounts elsewhere before the crash.
This from the Telegraph:

Forensic Asia on Tuesday began its coverage of Britain’s largest banking group with a ‘sell’ recommendation, warning the lender had between $63.6bn (£38.7bn) and $92.3bn of “questionable assets” on its balance sheet, ranging from loan loss reserves and accrued interest to deferred tax assets, defined benefit pension schemes and opaque Level 3 assets."

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"The major banks and states appear to be preparing for impending crisis, while pretending to the public that the economic situation is improving."

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"...issues with our currencies, our banking practices and economic system are not theoretical or academic – they are a matter of our very survival."