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Lose the Drama and Give Markets Their Due

But the lead in the article is buried. In fact, it's worse than buried, it's not even there. To wit: With UBS the first firm to take such drastic measures to limit its traders and investment bankers to such (comparatively) subsistence level bonuses, how many might bolt?

An executive search firm official is quoted as saying that other firms might follow suit, but if they don't or if they keep the cash ceiling higher, what does this mean for UBS? Doesn't a central issue in the future of talent retention for Citigroup (C), UBS, Merrill Lynch (MER) and Morgan Stanley (MS) in these troubled times stand as this: Are the firms with the most constricting bonus crackdowns going to lose top-tier people to those still giving cash out with a ladle?

After all, that is what happens in a dynamic system.

Well, just as we did not read any anticipatory writing about what people might do instead of going to Broadway, still spending money, we don't hear what capped-out UBS traders and investment bankers might do instead of accepting such meager rewards. Remember, in capitalism, there are never offers you can't refuse.

But the Journal just told us what Wall Street usually does during market slumps, how $750,000 is a lot in other fields, how they will receive two kinds of stock. They refer to "morale" at the firm suffering without mentioning that those will low morale might see it lifted by jumping to a firm that caps cash bonuses in the million-dollar range. Instead they quote an analyst saying that if you are getting a $750,000 bonus, you are only bringing home $350,000 after taxes anyway. But, uh, if you get a $1,000,000 bonus, you are bringing home $550,000.

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