With commodities set to resume their upwards move, Wall Street corporations have been searching out and hiring new commodity traders to add to their existing work force to fully take advantage of what promises to be a continuation of a bull market that was temporarily interrupted by the economic crisis and freezing of credit which force financial institutions to deleverage many of their positions in commodities they would have rather held.
This has gained notice because the new recruits are again being offered guaranteed bonuses of $1 million.
Financial giant Bank of America is re-entering the fray with plans to increase the number of commodity traders in their company by a hefty 25 percent, showing how much they’re convinced the commodity boom is about to gain back its momentum.
Of course many commodities have already been sizzling, with copper surging by almost 100 percent this year and oil also making similar gains.
This has been particularly frustrating for banks as they hated being forced to deleverage what they knew to be the highest potential profits going forward, but they were in a fight to survive with little or no credit available, and commodities had also pulled back in prices in a big way as companies and countries around the world stopped buying or weren’t willing to pay higher prices; that’s starting to change now, thus the expeditions to find quality commodity traders by the banks and financial institutions.
As a result of this new hiring spree, many of the banks have been poaching each others talent, especially smaller banks with larger banks during the time of laying off of so many workers.
Now the larger banks are getting back into the hiring game, and so are attempting to fight back while there’s good commodity traders to be had.
While we’ll hear a lot of groaning and griping about this from the media because of the guaranteed bonuses, the truth is that for many banks this is the way to fight their way out of their financial mess, and so to attempt to regulate that in any way would probably be a huge mistake, as it could seriously hamper the recovery.
The reason of the outcry against this is the fault both of the banks and the government, who took taxpayer dollars and bailed out the poor performing banks. That invites scrutiny and whining from bureaucrats who don’t want to look bad by these bonuses with the implication that taxpayers have directly or indirectly helped pay for them. Again, this is why the government needs to stay out of the private sector and let the good companies survive and thrive, while the poorly run companies crumble.
That’s what free markets are all about, and it would have been been better if it would have remained that way during these times.
Either way, I don’t see any way the government can force companies to set wages or bonuses at a certain rate unless they want to make things even worse, and extend the time for the problems to work themselves out.
