My uncle had sent me a powerpoint show that someone clever had made which explained the sequence of events from the subprime mortgages to the current worldwide panic. It was fun to read---cos of the cartoons and lots of fuck-yous---but I still didn't have a good grip on understanding the enormity of it. Why should the entire system collapse like a deck of cards because of some stupid (greedy) decisions made by some American bankers? Then I stumbled onto this explanation.
The illusion of money. Sort of explains a bit the unbelievable bonuses that some of my investment banker/ consultant friends were getting the last couple of years. Annual fixed bonus of a month's pay, and the variable bonus (which depended on the company's performance) of about 4 to 5 times a month's pay (the banks were doing really well). And these are normal people, i.e. fresh grads, not CEOs. The rest of us (green-eyed whiners, no doubt) used to wonder how these otherwise unremarkable human beings could be worth so much.
Does this signal the collapse of a system? [1], [2]
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