
As regular readers know, Bill Gross runs PIMCO, and manages the Total Return Fund (the largest bond vehicle in the world). When he talks, people listen. So imagine our surprise here at The Scrambler when in this month’s investment outlook, Billy Bob starts spouting nonsense about finance NOT being God’s work.
Why does he hate America?
Even if it’s a joke, it’s not funny. He needs to knock it off.
#unforgivable. Excerpt below.
Money would also become the economic and political wedge for profound changes in American society. Fifty years ago, the highest paid and most prestigious professions were that of a doctor or a 707 airline pilot who flew the “golden” route from Los Angeles to Honolulu. Today the yellow brick road begins on Wall Street or the City. Aside from supernova innovators such as Steve Jobs or Mark Zuckerberg, the money is made from securitizing things instead of booting and rebuilding America. The tallest buildings in almost every major city are banks, with tens of thousands of people shuffling and trading paper for a living. One of this country’s premier investment banks paid each of its 26,000 employees an average of $370,000 in 2010, nearly ten times the take-home pay of other American workers. Almost a quarter of the 400 wealthiest people on Forbes annual richest list make their money from money, whereas only 8% could make that claim in its first issue in 1982, and probably close to 0% when I first read my economic primer in 1966.
Having been part of this process and even a member of the rogue’s gallery itself, I know one thing for sure: This is not God’s work – it has the unmistakable odor of Mammon. PIMCO, while Mammonesque, is a company to be proud of. I can say with confidence that there are very few clients who have not benefited from our investment management over the years. Some of the rest of this industry, however, I’m not so sure of: rating agencies that perpetually fail at commonsensical quality judgments, bankers that make loans to subterranean credits and then extend the beggar’s bowl for themselves, and 80% of active money managers that underperform the market. As a profession we have failed miserably at our primary function – the efficient and productive allocation of capital:The S&L debacle of the early 1980s, the Asian crisis, LTCM, dotcoms, subprimes, Lehman and the resurrection, instead of the reformation, of Wall Street, are major sins of the modern era of money. Hang your heads, moneychangers. And no, it is not yet time to move on, as many banking CEOs suggest. How can bond traders make ten, one hundred, one thousand times more money than an engineer or social worker given their dismal historical performance? Why is it that some of today’s doctors are using food stamps while investment banking executives complain about millions of dollars in compensation that might be deferred in case of a future bailout?
Financiers have lost their high ground and, if truth be told, we began to lose it a long time ago when we figured out that money was more than a medium of exchange or a poor substitute for a store of value. We figured out a turbocharged way to make money with money and proclaimed ourselves geniuses in the process. Well, we’re not. We may be categorized as “opportunists,” to be generous, but society’s “paragons” and a legitimate destination for a significant percentage of college graduates? Hardly. To paraphrase Paul Volcker, the only productive invention to come out of the banking industry over the past generation was the ATM.
This country desperately requires a rebalancing of priorities. After readjusting the compensation scales via regulation and/or free market common sense, America needs to anoint a new set of Mensans who can create something more than a cash machine and make this country competitive again in the global marketplace. We need to find a new economic Keynes or at least elect a chastened Congress that can take our structurally unemployed and give them a chance to be productive workers again. We must have a President whose idea of “centrist” policy is not to hand out presents to the right and the left and then altruistically proclaim the benefits of bipartisanship. We need a President who does more than propose “Win The Future” at annual State of the Union addresses without policy follow-up. America requires more than a makeover or a facelift. It needs a heart transplant absent the contagious antibodies of money and finance filtering through the system. It needs a Congress that cannot be bought and sold by lobbyists on K Street, whose pockets in turn are stuffed with corporate and special interest group payola. Are record corporate profits a fair price for America’s soul? A devil’s bargain more than likely.
#greatmomentsinbankinghistory, #sadmomentsinbankinghistory, #worldviewshattered, #whydoeshehatefreedom?
Great article from Sunday’s frontpage. Yes, Sunday. We’ve been busier than you can possibly fathom. Excerpt below (along with embedded chart). Click photo or text linke for full piece. Enjoy…
From left: Shannon Palmer, Japanese/Irish; Vasco Mateus, Portuguese/African-American/Haitian; Laura Wood, black/white.More Photos »
COLLEGE PARK, Md. — In another time or place, the game of “What Are You?” that was played one night last fall at the University of Maryland might have been mean, or menacing: Laura Wood’s peers were picking apart her every feature in an effort to guess her race.
“How many mixtures do you have?” one young man asked above the chatter of about 50 students. With her tan skin and curly brown hair, Ms. Wood’s ancestry could have spanned the globe.
“I’m mixed with two things,” she said politely.
“Are you mulatto?” asked Paul Skym, another student, using a word once tinged with shame that is enjoying a comeback in some young circles. When Ms. Wood confirmed that she is indeed black and white, Mr. Skym, who is Asian and white, boasted, “Now that’s what I’m talking about!” in affirmation of their mutual mixed lineage.
Then the group of friends — formally, the Multiracial and Biracial Student Association — erupted into laughter and cheers, a routine show of their mixed-race pride.
The crop of students moving through college right now includes the largest group of mixed-race people ever to come of age in the United States, and they are only the vanguard: the country is in the midst of a demographic shift driven by immigration and intermarriage.
One in seven new marriages is between spouses of different races or ethnicities, according to data from 2008 and 2009 that was analyzed by the Pew Research Center. Multiracial and multiethnic Americans (usually grouped together as “mixed race”) are one of the country’s fastest-growing demographic groups. And experts expect the racial results of the 2010 census, which will start to be released next month, to show the trend continuing or accelerating.
Many young adults of mixed backgrounds are rejecting the color lines that have defined Americans for generations in favor of a much more fluid sense of identity. Ask Michelle López-Mullins, a 20-year-old junior and the president of the Multiracial and Biracial Student Association, how she marks her race on forms like the census, and she says, “It depends on the day, and it depends on the options.”
They are also using the strength in their growing numbers to affirm roots that were once portrayed as tragic or pitiable.
“I think it’s really important to acknowledge who you are and everything that makes you that,” said Ms. Wood, the 19-year-old vice president of the group. “If someone tries to call me black I say, ‘yes — and white.’ People have the right not to acknowledge everything, but don’t do it because society tells you that you can’t.”
No one knows quite how the growth of the multiracial population will change the country. Optimists say the blending of the races is a step toward transcending race, to a place where America is free of bigotry, prejudice and programs like affirmative action.
Pessimists say that a more powerful multiracial movement will lead to more stratification and come at the expense of the number and influence of other minority groups, particularly African-Americans.
And some sociologists say that grouping all multiracial people together glosses over differences in circumstances between someone who is, say, black and Latino, and someone who is Asian and white. (Among interracial couples, white-Asian pairings tend to be better educated and have higher incomes, according to Reynolds Farley, a professor emeritus at the University of Michigan.)
Along those lines, it is telling that the rates of intermarriage are lowest between blacks and whites, indicative of the enduring economic and social distance between them.
Prof. Rainier Spencer, director of the Afro-American Studies Program at the University of Nevada, Las Vegas, and the author of “Reproducing Race: The Paradox of Generation Mix,” says he believes that there is too much “emotional investment” in the notion of multiracialism as a panacea for the nation’s age-old divisions. “The mixed-race identity is not a transcendence of race, it’s a new tribe,” he said. “A new Balkanization of race.”
But for many of the University of Maryland students, that is not the point. They are asserting their freedom to identify as they choose.
“All society is trying to tear you apart and make you pick a side,” Ms. Wood said.

Who Is Marrying Whom
Nearly 9 percent of all marriages in the United States in 2009 were interracial or interethnic, more than double the percentage in 1980. The rates of intermarriage vary widely depending on gender, race or ethnicity. Gender differences are most pronounced among blacks and Asians. Black men marry someone from a different group twice as often as black women do, while among Asians, the gender pattern is reversed. Over all, black Hispanics and American Indians have the highest rates of intermarriage. For Asians and white Hispanics, the rates of intermarriage have remained static or decreased.
Great Piece/Chart Series from The Atlantic.
Click image for full screen view
What a Difference 2 Years Makes.
Officially, the Great Recession lasted from December 2007 to June 2009. A mere 18 months- about average, as recessions go. Yet if the trauma this time feels deep and lasting, that may be because, as the figures on these pages show, so many disruptions have upened national life at once.
Millions of Americans have lost their jobs, nearly every state faces a budget shortfall, and hundreds of banks have shut their doors. The young are unemployed, living at home, and playing video games. The ranks of thrid party candidates have swolen, militias have proliferated, and national leaders of both parties have seen their support decline. Of course, times of flux are often times of anxiety and unrest. But as the economy begins its slow and stuttering recovery, the vast changes wrought by this recession will continue to reverberate for many years- in ways predictable and otherwise.
First things first.
Pray for Giffords, the other survivors, the victims, and for America.
When I heard about the shooting on Saturday, I felt physically ill. There’s a lot to say, most of which has already been ably spoken and written. This comment by Olbermann (who I often disagree with), struck me as particularly eloquent.
“We need to put the guns down. Just as importantly we need to put the gun metaphors away and permanently. Left, right, middle — politicians and citizens — sane and insane. … If Sarah Palin, whose website … scrubbed bulls-eye targets on 20 representatives, including Gabby Giffords, does not repudiate her own part in amplifying violence and violent imagery in politics, she must be dismissed from politics. She must be repudiated by the members of her own party, and if they fail to do so, each one of them must be judged to have silently defended this tactic … And if those of us considered to be ‘on the left’ do not re-dedicate ourselves to our vigilance to eliminate all our own suggestions of violence — however inadvertent they might have been — then we, too, deserve the repudiation of the more sober and peaceful of our politicians and our viewers and our networks. … I say it first, and freely: Violence, or the threat of violence, has no place in our Democracy, and I apologize for and repudiate any act or any thing in my past that may have even inadvertently encouraged violence.”
America has seen some dark hours, but has always seen a brilliant daybreak on the other side. Thus has it been, thus shall it ever be. I hope.