Friday, March 13, 2009

We Live to Serve

Hon. Andrew M. Cuomo
Attorney General of the State of New York
Albany, New York

Re: Proposed Wall Street Compensation Rules

Dear Mr. Cuomo:

I understand that you are working with Rep. Barney Frank to design legislation which will "tie Wall Street pay to the long-term performance of the firms." This is an admirable goal, and as a taxpaying American citizen, I salute you for it.

According to the article in The Wall Street Journal this morning in which your plans were revealed to the public, you appear to be taking a measured, consultative approach in this project:
A person close to Mr. Cuomo said change is needed but the intent isn't to micromanage or interfere with the private sector.

"We certainly need to understand the industry's perspective on the potential unintended consequences of compensation reform before we finalize these long overdue changes," the person said.

This is comforting.

I believe I speak for many in the investment banking industry and the American business community at large when I say that we would find a reduction in frequency of legislative and regulatory reforms coming out of Washington D.C. and state capitals which are modeled on the trusty "Ready, Fire, Aim" approach to be somewhat reassuring. It is also refreshing to hear a regulator acknowledge the existence and risk of unintended consequences from their actions. I think few of us would object if you were to send around a brief note informing your peers in the regulatory and legislative branches of this little discovery.

* * *

As you consider a topic as charged and divisive as compensation in the financial services sector, about which every Senator, Congressman, taxpayer, and taxpayer's dog seems to have a fervently held opinion, may I humbly submit that you leaven your data collection with some input, information, and analysis from someone who—in contrast to 99.6% of the individuals offering their two cents worth in the debate—actually knows what the hell he is talking about.

Namely, me.

You could do far worse in this respect than to spend an hour or two of your time (or that of a moderately intelligent staffer) reading the posts I have published on this site over the last 15 months concerning this very topic, collected under the heading "filthy lucre." While I confess I spent perhaps an inordinate amount of time in these posts clearing away the obscuring underbrush which seems to adhere to this topic and countering the uninformed nonsense which a rag-tag collection of purportedly intelligent commentators have spewed forth in public, I have little doubt you will find a not-inconsequential number of useful and illuminating nuggets of information there which will do you no end of good.

In addition, should your (or your staffer's) desire to improve yourself extend to acquiring a more grounded understanding of the investment banking industry as a whole, you would find yourself well served by allocating a little more time to reading the more numerous posts collected under the rubric "The Life." After reading the materials collected therein, you should find that you actually know what the hell you are talking about with a far more gratifying regularity.

* * *

Having spent approximately two decades in this industry, rest assured I know whereof I speak. Furthermore, not being currently in the employ of (nor collecting deferred pay from) any financial institution in current or potential future receipt of taxpayer funds, I can confidently assert that I have no particular dog in this fight. Other than my patriotic desire to do my civic duty, and my wish as a citizen and taxpayer to do what I can to help alleviate and correct the crippling imbalances which have arisen in our financial system and spilled over to our broader economy, I have no biases in this matter. (Although I admit I will be happier if the direct and unintended consequences of your actions and those of your colleagues do not reduce the American financial system to a state of efficiency and health inferior to that of the North Korean agricultural sector.)

Should you wish to explore these matters further, I would be delighted to meet you in person to discuss them. I will make myself available on the corner of Wall Street and Broad in New York City between the hours of 3:00 am and 6:00 am Eastern Daylight Time every Wednesday, Thursday, and Friday. Should you decide to come, please bring a regulatory consultation retainer of ten million dollars in small, unmarked, non-sequential bills, plus a signed engagement letter stipulating a transaction success fee of 0.15% of all TARP and TALF funds disbursed after January 1, 2009. You or your representative should carry a clean, lightly-used Goldman Sachs duffle bag bearing an American Airlines Executive Platinum luggage tag labeled "Joe." (I will keep the duffle bag.) You will recognize me as the gentleman clad in fatigues wearing a Saddam Hussein mask.

Looking forward to hearing from you, etc., etc.

Your Humble Servant,

The Epicurean Dealmaker

cc: Rep. Barney Frank

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