Treasury, Citibank, Taylor discussed on Bloomberg Best


Treasury he made one hundred twenty million dollars in compensation from citibank over ten years selling out of the money option thing that explode rarely okay called taylor risk and one heads he wins and one one the thing happened citibank was insolvent goes to ninety seven cents a share actually and then all black sean you know and as someone else has been on the cost the shareholder and the taxpayers stopping them out on the trade so he was not alone of course of course that you use them as an example because he's emblematic of that problem exactly generation of people who think that society owes up profits but they don't want to bear the risk lie is it that wall street still has what you claim and argue persuasively is a misconception or amiss attribution if you will about the notion of skin in the game because they don't understand that through three things number one that's can again just and centers to that insent disincentive are therefore reason since the beginning of times for four thousand years beginning of civilization we have had rules that don't allow the architect to build a structure and then walk away if a collapses and kills people so and hamurabi okay one exactly and the third one is skin in the game is a filter it's evolution mechanism if you don't have very dangerous drivers on roads is because the owns their own risk the die in an accident if you have a bed driver it not likely to die an accident and not live to be penalized so let's get practical missing it how do we make the financial system more darwinian if you will it is working on self let me explain hedge funds most of the risks has migrated to hedge funds or structures like hedge funds and hedge fund typically investors require the owner or the owners have more than or or something equivalent fifty percent of their net worth in the front is not just not just the you know none reinvested reinvested we vessel profits it's their networks y to prevented from playing the bubble trait it's a because if the fund loses money they suffer as well they suffer as well as clawback is not sufficient you need.

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