NYTimes: Troubled Banks, Hugh Bonuses

The federal pay czar, Kenneth Feinberg, would be right to reject requests for big bonuses at banks feeding from the public trough.....

Mr. Feinberg must object to gargantuan payouts from banks that would be bankrupt
if not for taxpayers’ money. He should not be deterred by banks’ arguments that they will lose superstars and compromise profitability if they can’t pay lavishly.
The superstars caused the problem with financial wizardry they did not fully understand...

Most broadly, Mr. Feinberg must devise a structure to dissuade bankers from blowing up the economy again. In principle, one would like to see firms pay executives as they saw fit. But banks are different. They gamble with ordinary people’s money. They have proved they can do it extremely destructively.

Bankers’ remuneration was among the main factors behind this destructive behavior, encouraging them to take on dubious bets that provided big short-term returns at the expense of their institutions’ and the economy’s future stability...

http://www.nytimes.com/2009/08/03/opinion/03mon3.html

NYTimes: Rewarding Bad Actors ( Who Make Us Poorer )

Americans are angry at Wall Street, and rightly so....

But crashing the economy and fleecing the taxpayer aren’t Wall Street’s only sins. Even before the crisis and the bailouts, many financial-industry high-fliers made fortunes through activities that were worthless if not destructive from a social point of view.

And they’re still at it. Consider two recent news stories....

Just to be clear: financial speculation can serve a useful purpose.... But speculation based on information not available to the public at large is a very different matter....

.... we’ve become a society in which the big bucks go to bad actors, a society that lavishly rewards those who make us poorer.

http://www.nytimes.com/2009/08/03/opinion/03krugman.html
http://en.wikipedia.org/wiki/Paul_Krugman

European CityMobile and CyCab

There is an exciting project involving an automated (i.e. driverless taxi) to provide local transport. Read my blog here.

I have been writing on this matter for a few months, but I learned yesterday that the people in Europe had been working on the same idea much earlier.

Prudential Yield 15/20

Someone posted a comment that the Prudential 15/20 is similar to the Great Link Choice. Can policyholders of this product give feedback on:

a) The structure of the product
b) Does it guarantee against the failure of a certain number of CDOs
c) What is the current value of the various tranches of this product?