Buffet says Wall Streeters can "wreck the system" & walk away rich

Gee, what a novel idea whose time has passed: If they don't perform well and make prudent decisions, they don't get paid.

This is the opposite of the "f**k you, we'll take all even if we act like imbeciles" attitude and practice now in effect.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a182ivzPzg5U

Buffett Says Wall Street Pay Must Have ‘Downside’ (Update1)
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By Andrew Frye

Oct. 20 (Bloomberg) -- Billionaire Warren Buffett, who collects a $100,000-a-year salary for running Berkshire Hathaway Inc., said Wall Street pay needs a “downside” when profits deteriorate because of reckless bets.

“You have to put in something where there is downside to people who really mess up large institutions,” Buffett said in an interview conducted by the chief executive officer of Business Wire, the Berkshire subsidiary that posts corporate press releases. “Too many people have walked away from the troubles they have created for society, not just for their own institution, and they have walked away rich.”

Wall Street bonuses for 2009 may jump 40 percent to $26 billion, a year after bad bets on subprime mortgages sent financial firms to the government for bailouts, according to estimates by compensation consultant Johnson Associates Inc. Buffett became the second-richest American by building Omaha, Nebraska-based Berkshire into a $150 billion company.

“What you have to change in Wall Street, is you have to make sure that in addition to carrots, there are sticks,” he said. “And it can’t be a one-way street where they are making ungodly amounts of money when things are good and then they move on to someplace else for a while when things are bad.”

Goldman Sachs

Buffett invested $5 billion of Berkshire’s money last year into Goldman Sachs Group Inc., Wall Street’s highest paying and most profitable firm. He said in the interview that the securities industry is essential to economic growth.

“I don’t look at Wall Street as ‘evil,’” he said. “I look at Wall Street as given to huge excess sometimes. I don’t want to get rid of it. We need something to allocate capital and distribute securities and all of that throughout the system. We have got a big capitalist system and we have to have a big capital market - but there is plenty of room for improvement.”

The interview, conducted last month, was released today in connection with the launch of a Web site by Business Wire focusing on the electronic payments industry. Buffett is chairman and CEO of Berkshire.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net.
Last Updated: October 20, 2009 13:34 EDT

 

I love how buffet can state the clearly obvious and yet everyone ignores him until it's too late.

Tragic.

 

He is just pissed off because of some of his large positions he made last year that have not come back at all. (ie. large stake in GE.) The Wall Street bonus structure will never change, get used to it and come up with a work around.

Akuma

 

If we had an honest and truly free market this would have never have happened in the first place and these morons would have lost all their money years ago. The government is their life support, take that away and they die.

 

Warren is not a daytrader.