How can a business tank -96% in revenue, we are not talking profit, but revenue!!!
From a good friend on Skype (OR connection):
$248,000 Average Pay
Even if Merrill set aside nothing for compensation in the fourth quarter, the firm’s 60,900 employees still would reap an average of $184,000 in compensation and benefits for the full year.
In 2007, Merrill paid out a total of $15.9 billion in compensation, or about $248,000 per employee.
Merrill’s revenue for the first nine months of this year totaled $834 million, or $13,695 per employee, compared with $19.4 billion in the 2007 period.
So they pay 248K per employee with revenue this year 13K per employee. Ouch...
I said earlier that the revenue of the banks was a function of volume x velocity. Since monetary volume is going down and velocity is halting (no CDO for example) you have not a linear problem but a square one. But -96%!!!
The shadow banking system is dead. Died with amazing speed. Further proof that they were not beast living on capital but beasts living on flow. Flow disappeared the beast disappeared.
This could get very ugly. I believe DOW will play with the 6500 barrier as a result.
Swift nationalization of the banking system in the USSR of A is probably the only way this will not turn into an economic nuclear winter. Brace yourselves.
This does not bode well. I was hoping the banking system would stabilize