Doom and gloom are no longer a ‘possible’. It is a fact, displayed all too vividly with the tectonic shift in confidence toward the financial sector recently. It comes to something when a £12bn emergency takeover of HBOS by LloydsTSB (and a subsequent 30% market share) is regarded positively. Well, rather like a slap to the face, as opposed to kick in the nether regions, it was found less negative than the alternative.
Of course the massive job losses are devastating. And as Paxman said on last Monday’s Newsnight, “It’s hard to call yourself a master of the universe when you’re leaving the office clutching a cardboard box full of your possessions.” But there’s a diamond in the rough for some who’ve lost their livelihood. It seems IT startups on America’s East Coast and in Britain are actively targeting those with advanced degrees in economics or maths and experience in coding algorithms.
Meanwhile America’s pay-for-failures in corporate board rooms continues unchecked. It seems ‘crunch’ doesn’t translate to the penthouse suites of these ‘top performers’. The CEO of asphyxiating insurance giant AIG, Robert Willumstad, is eligible for a laughable golden parachute of $8 million, according to estimates in the NY Times. However, this is nothing short of insulting compared to the recent departure from Merrill Lynch of CEO Stan O’Neal – he left with a pay package of $160 million!
If that doesn’t say ‘Keep up the good work, chaps’ what the hell is it supposed to say instead? A public flogging for irresponsibility and negligence would get my vote. Moral hazard indeed.