$770,000 per worker

According to the NY Times, that will be the average comp at Goldman if it keeps pace with its recent results through December. This may not exceed the record highs of 2006 and 2007, but needless to say politicians and most of the rest of America won't be happy. There are two potential government interventions to look for - 1), a populist crackdown via something like a targeted tax, and 2), a regulatory investigation into whether Goldman's earnings are in part due to taking on tail risk and leaning on the government's cheap financing and implicit backing of too-big-to-fail financial institutions.

I think 1) is unfair and undesirable, 2) is highly desirable, and both are moderately unlikely to happen in the end.

Interestingly, Goldman's blowout $3.4bn earnings announcement barely moved the stock, so the market clearly saw this coming, even if analysts didn't.

Update: Via Felix Salmon, former Secretary of Labor Robert Reich is worried.

No comments:

Post a Comment