The following article is on the 2/4/2009 stocktiming.com site. All I have to say is, "Amen."

New Banks, Dying Banks?

You have to go back to 1993 in order to find when the Banking Index was trading so low ...

"Just a few days ago ... Banking insiders were asking, "Is this the bottom, or do we fall lower and have a nasty financial problem that goes on for years?" Today, these same people are really disturbed .... here's why:
One of today's headlines said, "Obama to put a $500,000 pay cap on Banking Executives".

According to some bank analyst, this is apparently causing a serious dissent with the "top talents" within our largest banks ... and we are not talking about the CEO/executives. Here is how their argument goes: Many will be defecting and going to, or starting new private lending entities. If that becomes a trend, then that would leave the troubled banks in more trouble as they lose the kind of skill-support that they so desperately need. Short term, this could have a negative affect on the banking industry if these "critical staff members" are lost.

But this argument is based upon the perception that the "top banking talents" that are now in place, are irreplaceable, and that there are no other intellectually worthy employees standing behind them that could do the job. If some of them are in fact super-talented, and are being hindered relative to truly productive win/win results that they can generate for all of us ... then they will veer off in new directions.
The days are gone where win/lose deals can work ... these are days where only win/win propositions will be embraced. Consumers, borrowers, and workers will avoid situations where they are taken advantage of, and change to situations where things are fair and equitable to both parties.
It is delusional, and historically unheard of that any kind of government, business, employee, and/or husband/wife relationship actually lasted if it was a win/lose relationship. Power corrupts, and corrupted power sees no problem with win/lose propositions ... like charging exorbitant (30%) interest rates to consumers. The stock market, societies, and economic entities can not function extended periods of time with conditions extremely out of balance.

It also seems preposterous, that as a nation, we should believe that we have only "a limited number of top banking talents" in the country and after them ... there are no more. Those arguments sound more like a lobbying ploy to keep the previously high salaries in play ... in entities that have accepted bank bailout funds from the government/tax-payer.
Ironically, Obama's banking salary cap will more than likely spur a "new birth of banking/lending entities" than the return of sanity and profitability of the banks that went bad.

One way or another, extremes and bubbles return to a level of balance.
One way or another, attempts at controlling or re-establishing balance end in frustration ... just like a river, water always follows the path of least resistance and ends up winding and turning in paths and directions that no one could ever have imagined.

If and when hindered ... just like water, this country's best talents will find new venues to express their talents, capabilities, and entrepreneurial skills. When old systems and models become non-functional, new and efficient systems take their place. The longer an old "system or model" has been in place, the longer it may take to replace it, but in the end, the new system will be more streamlined, efficient, and effective ... or it won't survive."

http://stocktiming.com/Wednesday-DailyMarketUpdate.htm

Lady