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Bail Out Wall Street?

The Bush administration's proposal to relieve financial institutions of their "bad" assets may be the most momentous event that the U.S. economic system has experienced since Franklin Roosevelt's New Deal more than 70 years ago.

While the bailout plan's ultimate shape and its fate in Congress remain uncertain as of this writing, voter outrage is already driving lawmakers and the administration toward imposing some form of quid pro quo on banks that will benefit from the rescue effort.

Can a federal bailout save Wall Street as we know it - or will any such effort more likely amount to "destroying the village in order to save it"? Is there a glaring omission, some major provision that ought to be in the package but isn't?

Most important of all, how do you think a bailout might affect your long-term career prospects in the industry - including your future compensation levels?

AUTHOReFinancialCareers News Insider Comment
  • Br
    29 September 2008

    Here is a site for those professionals affected by this crisis to brainstorm and explore their career options at this crucial time. Post your thoughts at :

  • re
    26 September 2008

    It isn't just MBS; its CDO's, ABS, default swaps and whole host of other stuff which WE gleefully peddled for the last decade.

    As a result, the finance industry created a groupthink monster entirely based on wishful thinking, OR (dare I say) based on a failure to grasp implications and a complete lack of common sense. For a non-mortgage example, did "conduit financing" ever make sense? Hmmmm..let's see..I am going to finance a 7 year obligation by rolling it over in 360 day commercial paper EVERY YEAR for the next 7 years. How stupid is that? However, the ABS guys/gals LOVED this stuff (big CP deals = big bonus, regardless of the outcome).

    Let's be real. Street compensation has, in reality, been a total national rip-off for several years. Blow up a fund? No problem. Your next gig believes you are a super genius who just needs "more management". Do a "smoke and mirrors" deal which implodes 3 years out? There are no consequences for you. You got your payday already.

    Unwarranted and un-economic compensation is now in the public eye. Good. Maybe it will force us to actually justify ourselves to the real economy. I welcome the exposure and the scrutiny.

  • ba
    25 September 2008

    I worked my *** off to earn my bonus. I don't work with MBS, so I had nothing to do with the subprime mess. Yet if Congress limits senior executives' pay "to protect taxpayers," that will probably hold down my pay, too (call it negative trickle-down). So how in hell will that protect taxpayers? I also pay taxes - a LOT of taxes.

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