Have, have ah made 2.2 Trillion of the past 5 years. It’s a business that doesn’t make money. And projected about 5 Trillion dollars the next 10 years
Erik Schatzker: Okay
Nassim Taleb: It’s like a tax on citizens. It’s a transfer of money
Erik Schatzker: This is a transfer of wealth to, to compensation in particularly speaking about
Nassim Taleb: Exactly. This is compensation. Salary + Bonuses of bankers.
This is a huge amount of money. And people are worried about how much we spend on the military.
It is a tax on citizen that goes… Is there some kind of mysterious mechanism by which people can, can manage to… to extract as much money from the American citizens?
So the bankers… and everybody is unhappy about it except bankers.
Even some bank employees working in Investment Management think that don’t really ah, ah… have bailouts.
So here we have a bailout scheme. That seems to have since the Regan. You know Regan bailed out the banks in ’83.
Seems to be given the banks a following mode.
You make money alright, you keep it.
You lose money, society backs you up.
So we have ah… this is doesn’t exist in any other… ah, ah world
Erik Schatzker: I still don’t understand thought. We need to get to down to this. How do you? So that’s the Status Quo.
Nassim Taleb: Right
Erik Schatzker: On the one hand you’ve got this generation into sort of soviet system.
Nassim Taleb: Yes
Erik Schatzker: And the other side is the status quo. What, what’s the, what’ the
Nassim Taleb: The status quo is not these 2 factions
Erik Schatzker: You said it needs to be pre-empted. What, what, what pre-empts it?
Nassim Taleb: You need, you need ah, ah something to break… ah the bank cartel.
Okay the top bank cartel. You need something to break em. For the sake of the finance industry.
I mean for everybody would be happy except for Bankers.
It is, its equation that is attainable, you see. The banks have… Federal assistance policy to help the banks. Everything is there to help the banks. We have been transferring money to them.
They caused the crisis. We all, we know that. Last year they had record bonus.
This is not something that’s ah rational okay. And they’re hijacking the environment, the American economy by saying you need us.
You need to pay us bonuses. People in military don’t get bonuses
Erik Schatzker: Nassim we are talking about ah
Nassim Taleb: Yes
Erik Schatzker: The Occupy Wall Street protests. But at the core you believe. At the core of the situation is a problem concerning bank compensations. When you look at a company like Bank of America. And I know that you are not an analyst. What comes to mind when you hear to me talking about earnings and revenues
Nassim Taleb: It you’re wasting your time, everybody’s time. Everybody is wasting time talking about bank earnings.
They’re not a hedge fund. They’re not market to market.
You don’t know what’s there? You don’t know? They don’t mark the loans.
European banks don’t mark Greece at what it should be marked at.
It’s irrelevant. The only information you get from bank earnings is compensation
Erik Schatzker: The only thing that seems to fact
Nassim Taleb: The only thing in fact. The only valuable information you can get from it is, how much they pay themselves.
Erik Schatzker: What, what could you think would happen if these banks? For your term mark to their asses, access. Assets pardon me. Mark their assets to market.
Nassim Taleb: I know in 2009 they were insolvent, okay.
Erik Schatzker: Will they still be insolvent?
Nassim Taleb: Ah I have no idea now. I don’t know what they have
Erik Schatzker: But think about, what’s going in Europe? If, if, they were to take
Nassim Taleb: If they were insolvent. They were not showing insolvency. Banks have been able to hide their real economic P&L