The New Black Friday Means Lines But Less Frenzy At Kmart, Sears

DES PLAINES, Ill. -- "Be safe everybody," a Kmart worker instructed customers here as they filed into the store at 6 a.m. on Thanksgiving Day, looking for deals on items such as headphones and clothes.

But the instruction may have been more of a formality. Once the dozens of people lined up outside the store were inside, they calmly browsed the aisles and compared prices on towels and toasters to those listed in the circulars they had brought along.

The line outside a Des Plaines, Illinois, Kmart at 5:50 a.m. on Thanksgiving Day. (Jillian Berman/The Huffington Post)

Welcome to the new Black Friday. It starts on Thursday or even earlier, lasts for days and isn't quite the harried environment of years past. The increased popularity of online shopping, combined with retailers' interest in capturing shoppers' limited dollars as early as possible, has made the one-day deal bonanza obsolete. Instead, this year Walmart, Target, Amazon and others offered days of deals starting in mid-November.

Sears, which is also owned by Kmart's parent company, Sears Holdings Corp., opened at 6 p.m. on Thanksgiving, two hours earlier than last year, and offered its longest string of doorbuster sales ever -- more than 1,000 deals over a 17-hour period -- said Jamie Stein, the vice president of public relations at Sears Holdings. The chain is also letting shoppers buy items online and pick them up in person at both Sears and Kmart stores. At one New York Kmart, more than 100 people stopped in Thursday in a period of just a few hours to pick up items they ordered online, Stein said.

"That's what we saw this year, not a Black Friday but a Black November," Stein said Friday. "In previous years, the focus on one day did create this craze, but was that the best for our customers? Now it's less of a frenzy but better in the end."

Crowds were reportedly thin at malls across the country on Friday morning.

The aisles were relatively clear at 6:30 a.m. Thanksgiving Day at the Des Plaines Kmart. (Jillian Berman/The Huffington Post)

Of course, there were still some elements of the classic Black Friday frenzy at stores across the country. Stein said Kmart managers reported "consistent lines" at 6 a.m. openings Thursday, with 100 people waiting to get in on average.

The increased availability of earlier deals didn't change the holiday plans of Cindy Bergate and Nancy McFall, two shoppers who were browsing the shoe aisles here around 6:15 a.m. on Thanksgiving. The two said they've been Black Friday shopping with four other relatives for years.

After Kmart, they were headed home to cook and eat Thanksgiving dinner, then someone in their shopping crew would leave the meal early to get in line at Walmart. They said they also planned to hit Target and other stores and then head back out again on Friday.

"We're crazy," said McFall, 48, adding that she preferred the experience in years past when shoppers waited in line outside for hours.

Pam Pitakis, 53, who was browsing a rack of jackets that were 50 percent off, said she's nostalgic for the traditional Black Friday for different reasons.

"It's kind of annoying" that so many deals are on Thanksgiving, she said. Pitakis came to Kmart in the wee hours of the morning to get a tablet. "We'd rather just have it be on Black Friday."

Stores have been opening earlier on Thanksgiving in recent years.

Kmart has been open on Thanksgiving for 23 years. But it's been a target of criticism in recent years, along with other retailers, as more chains moved their opening times and best deals to earlier on the holiday. Detractors deride the stores for requiring workers to come in on the holiday and compelling shoppers to rearrange their turkey dinners to make it in time for deals.

"I hate this time of year," one Kmart veteran who works in human resources in a California store told The Huffington Post earlier this month. Several others, who also requested anonymity to protect their jobs, expressed similar sentiments in interviews, saying they weren't given the option not to work on Thanksgiving.

Stein said the company "makes every effort" to staff its stores on the holidays with seasonal employees and volunteers before requiring others to come in. Many employees appreciate the chance to work the holiday because they're paid one and a half times their hourly rate, she said.

The retail giant sets holiday hours for Sears and Kmart based on feedback the company has heard from customers, Stein said. It's also an aim to stay competitive with other retailers.

Sears Holdings has been struggling for the past several years. The chain hasn't reported a positive quarter of same-store sales since 2005, according to Retail Metrics, a retail data firm. CEO Eddie Lampert has been using a controversial strategy to turn things around that critics argue has little to do with actually selling more stuff.

The company is trying to maximize the value of its real estate by selling hundreds of its stores to a newly formed real estate investment trust and renting out space to stores such as Whole Foods, Dick's Sporting Goods and others. It's shuttering other, underperforming locations by the dozens.

"It's a very difficult scenario that they find themselves in," said Ken Perkins, the founder of Retail Metrics. "There's no buzz."

Those difficulties are compounded by the struggles facing other retailers that cater to low- and middle-income shoppers. Slow wage growth has meant that most Americans have limited money to spend in stores. Chains are ramping up the deals all month in hopes that strapped Americans will spend their money in their stores, but the traffic and high volume of purchases at steep discounts may do little to actually help their bottom lines, according to Mark Cohen, the director of retail studies at Columbia Business School.

Sears and Kmart "are attempting to participate aggressively," said Cohen, a former CEO of Sears Canada. "At the end of the day, it's all for naught. This entire Black Friday window of hyper-promotion is really a race to the bottom for all retailers participating."

Buick Dealership Offers A Free Car -- And A Lesson In The Derivatives Market

Bill Kay Buick GMC is promising a complete refund to anyone who buys a new car on Friday or Saturday if it snows more than 6 inches on Christmas Day in Chicago.

"No one has ever done this in the car business before," Karl Regalado, Bill Kay's general manager, told The Huffington Post. "It's legit. A lot of people think it's a scam."

It's not a scam; it's a derivatives contract.

(Bill Kay Buick GMC)

For two days only, your new Buick comes with what is essentially a weather derivatives contract. Typically the only people dealing in weather derivatives are investment banks and insurance companies with teams dedicated to betting on things like hurricane and flood risk.

For example, to offset its risk of paying out millions of dollars to homeowners in case of a hurricane, an insurance company will set up a derivatives contract with an investment bank. The bank agrees to pay out some amount of money in case the storm actually does hit. If the storm misses land, the bank wins. If the storm hits, the insurance company loses less.

At Bill Kay Buick GMC, the deal is more simple: If it snows 6 inches or more on Christmas at Chicago's O'Hare Airport, you get your money back. And really, Bill Kay means that quite literally -- 2 inches on Dec. 24 and 5 inches on the 25th without melting won't cut it. A half-foot of snow has to fall from midnight to 11:59 p.m. on Dec. 25. If that doesn't happen, you keep your car for the price you paid. That's risky, so Bill Kay bought insurance from a company called HCC that specializes in financially protecting companies and people from odd things, like the chance that a professional athlete's career will be cut short by injury.

Regardless of what happens, Bill Kay gets some publicity (this post included, you're welcome!). That insurance should have been pretty cheap -- a little more than $10,000 based on my estimate. The fair price to insure the dealership's expected $1 million in sales is less than 1 percent of $1 million, but for the sake of round numbers, let's assume it's $10,000, plus a bit more because the insurance company is being conservative and tacks on a fee. Still, the total cost the dealership paid to the insurance company is probably less than $12,500. That's the equivalent of a 10 percent discount on five $25,000 Buicks.

So Bill Kay's Buick GMC, the only weather-derivatives-dealing car dealership in America, is doing something pretty smart: Offloading its entire refund risk to its insurance company at a price that's cheaper than a run-of-the-mill sale to which no one (myself and the Tribune included) would have paid much attention.

That's because, based on historical data, the chance of Chicago getting 6 inches of snow on Christmas is less than 1 percent. Chicago is a cold, snowy city, but heavy snowfall happens infrequently, as you can see from this chart. Snow days of 3 inches or more are the dark blue lines occurring around 2 percent frequency in December:

The record Christmas Day snowfall in Chicago, according to the state's climatologist, was 2.5 inches in 1965.

According to data from the National Oceanic and Atmospheric Administration, from 1981 to 2011, it snowed 5 inches or more in December an average of just 0.3 days. That's just 1 percent of the days. It's not enough snow to trigger the free-car deal, and it includes the entire month of December. The odds of big snow days are the same in January, which is useful. The dealership and its insurer don't need to worry about a more-frequent early January storm happening in late December.

Bill Kay has already seen the deal's payoff. It has "been a great media blitz in the last 24 hours or so," Regalado said. And things will only get better, he says, if they give away cars on Christmas.

"No matter how many cars we sell, whether it's 40, 50, 60 or 70, this is a win, win, win. If it snows 6 inches on Christmas, everyone is going to know who we are."

Black Friday Is One Of The Busiest Days For Gun Purchases

BRIDGEPORT, W.Va. (AP) — More gun sales than ever are slipping through the federal background check system — 186,000 last year, a rate of 512 gun sales a day, as states fail to consistently provide thorough, real-time updates on criminal and mental histories to the FBI.

At no time of year is this problem more urgent. This Friday opens the busiest season for gun purchases, when requests for background checks speed up to nearly two a second, testing the limits of the National Instant Criminal Background Check System, or NICS.

The stakes are high: In the U.S., there are already nine guns for every 10 people, and someone is killed with a firearm every 16 minutes. Mass shootings are happening every few weeks.

"We have a perfect storm coming," FBI manager Kimberly Del Greco told The Associated Press during a rare glimpse into the inner workings of the system.

Much of the responsibility for preventing criminals and the mentally ill from buying guns is shouldered by about 500 men and women who run the system from inside the FBI's criminal justice center, a gray office building with concrete walls and mirrored windows just outside Bridgeport, West Virginia.

By federal law, NICS researchers must race against the clock: They have until the end of the third business day following an attempted firearm purchase to determine whether or not a buyer is eligible.

"They won't proceed or deny a transaction unless they are ABSOLUTELY certain the information they have is correct and sufficient to sustain that decision," FBI spokesman Stephen G. Fischer told the AP.

In roughly two percent of the checks handled by the FBI, agents don't get this information in time. If three business days pass without a federal response, buyers can legally get their guns, whether or not the check was completed.

Americans are buying more than twice as many guns a year now as they did when the background checks were first implemented in 1998. And that means more gun sales are effectively beating the system.

The federal government often takes the heat in debates over gun rights, but the FBI says states are largely to blame for this problem. They voluntarily submit records, which are often missing information about mental health rulings or criminal convictions, and aren't always rapidly updated to reflect restraining orders or other urgent reasons to deny a sale.

"We are stewards of the states' records," Del Greco said. "It's really critical that we have accurate information. Sometimes we just don't."

There are more than 48,000 gun retailers in the U.S., from Wal-Mart stores to local pawn shops. Store clerks can use the FBI's online E-Check System, which federal officials say is more efficient. But nearly half the checks are phoned in. Three call centers — in Kentucky, Texas, and Wheeling, W.Va. — take these calls from 8 a.m. to 1 a.m. every day but Christmas.

NICS did about 58,000 checks on a typical day last year. That surged to 145,000 on Black Friday 2013. They're bringing in 100 more workers than usual for the post-Thanksgiving rush this year.

The call centers have no access to privileged information about buyers' backgrounds, and make no decisions. They just type in their name, address, birthdate, Social Security Number and other information into the system. On Black Fridays, the work can be grueling: One woman took a call that lasted four hours when a dealer phoned in the maximum 99 checks.

"Rules had to be stretched," recalled Sam Demarco, her supervisor. "We can't transfer calls. Someone had to sit in her seat for her while she went to the bathroom."

In the years since these background checks were required, about 71 percent have found no red flags and produced instant approvals.

But ten factors can disqualify gun purchasers: a felony conviction, an arrest warrant, a documented drug problem or mental illness, undocumented immigration status, a dishonorable military discharge, a renunciation of U.S. citizenship, a restraining order, a history of domestic violence, or an indictment for any crime punishable by longer than one year of prison time.

Any sign that one of these factors could be in a buyer's background produces a red-flag, which sends the check to the FBI researchers to approve, deny or investigate. They scour state records in the federal database, and often call local authorities for more information.

"It takes a lot of effort ... for an examiner to go out and look at court reports, look at judges' documents, try to find a final disposition so we can get back to a gun dealer on whether they can sell that gun or not," Del Greco said. "And we don't always get back to them."

These workers have considerable responsibility, but little independent authority. They must use skill and judgment, balancing the rights of gun owners and the need to keep would-be killers from getting firearms.

Researcher Valerie Sargo said outstanding warrants often come up when they examine a red flag, and that can help police make arrests.

"It makes you feel good that this person is not supposed to have a firearm and you kept it out of their hands," she said.

It also weighs on them when the red flags aren't resolved in time. Tacked to a cubicle wall, a sign reads: "Our policy is to ALWAYS blame the computer."

FBI contractors and employees oversaw more than 9 million checks in the first full year, when the NICS system was established as part of Brady Handgun Violence Prevention Act of 1998. By last year, they oversaw more than 21 million. In all, only 1.25 percent of attempted purchases are denied. Denials can be appealed.

People can get guns without background checks in many states by buying weapons at gun shows or from individuals, a loophole the National Rifle Association does not want closed. But even the NRA agrees that the NICS system needs better data.

"Any database is only going to function as well as the information contained within," NRA spokesman Andrew Arulanandam said.

Del Greco doesn't see the states' data improving soon, which only adds to the immense challenge of getting through huge numbers of requisite checks on Black Friday.

___

Associated Press Writer Matt Stroud can be reached through Twitter @mattstroud.

A Quarter Of Uninsured Say They Can't Afford To Buy Coverage

This story was originally published by Kaiser Health News.

Just days before the health law’s marketplaces reopened, nearly a quarter of uninsured said they expect to remain without coverage because they did not think it would be affordable, according to a poll released Friday.

That was by far the most common reason given by people who expect to stay uninsured next year, according to the latest tracking poll by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.) Forty-one percent of individuals without health insurance said they expected they would remain uninsured, while about half said they plan to get coverage in the coming months.

The law includes subsidies to reduce premium costs and cost-sharing assistance for those who qualify, although it was not clear if the uninsured knew that.

Despite heavy news coverage and marketing from insurers about the re-opening of enrollment, about 9 in 10 of the uninsured said they didn’t know when the health law’s open enrollment period began (Nov. 15). That was similar to the findings in last month’s Kaiser poll.

More than 8 in 10 of the uninsured said it is at least somewhat important to them to have health insurance, with 62 percent saying it’s very important. Seven in 10 said health insurance is something they need.

Other findings in Kaiser’s November poll include that most of the public reports their families have not been directly impacted by the health law, with more (24 percent) saying they have been hurt than helped (16 percent).

Forty-six percent of those surveyed hold an unfavorable view of the law and 37 percent view it favorably, a slight change from last month’s survey, where 43 percent of those questioned held an unfavorable view of the law and 36 percent a favorable one.

With the midterm elections giving Republicans control of the Senate and increasing the party’s majority in the House of Representatives, Americans were divided about whether the debate between the two parties over the health law would increase, the poll found. Forty-seven percent expected it, while 42 percent predicted it would stay at about the same level.

This KHN story can be republished for free (details).
There’s a variety of opinion about what Congress should do next with the health law. Twenty-nine percent of the public supports the law’s repeal, 17 percent favors scaling the law back, 20 percent wants the law to move ahead as is, while 22 percent chooses expanding the law.

Republicans are more likely to favor repeal (52 percent) or scaling it back (24 percent), while Democrats are more likely to favor moving ahead with the law in its current form (40 percent) or expansion (34 percent). Independents fall in between, but lean toward repeal or scaling back.

The poll was conducted from Nov. 5 through 13, using a telephone sample of 1,501 adults. The margin of error is +/- 3 percentage points for the full sample and +/- 9 percentage points for the uninsured.

maryagnesc@kff.org | @MaryAgnesCarey

Kaiser Health News (KHN) is a nonprofit national health policy news service.

Goldman Sachs Fires Employees Over Leak Of Confidential NY Fed Info

(Adds details, background, statement from New York Fed)

By Tanya Agrawal

Nov 20 (Reuters) - Goldman Sachs Group Inc said it fired two employees over the leaking of confidential information from the Federal Reserve Bank of New York, raising again questions about the bank's alleged cozy relationship with its regulator.

The bank said a junior employee was sacked for passing on to a colleague information from the New York Fed, his former employer, while a supervisor was fired for knowing about the matter but not escalating it.

The disclosure of the firings comes a day before a U.S. Senate subcommittee is scheduled to start hearings on whether the Fed's relationship with the banks it regulates is too close.

The hearing follows the release of secretly recorded conversations between the New York Fed and Goldman officials that suggested Fed officials were reluctant to push Goldman for answers on a transaction with Spain's Banco Santander.

Goldman said on Thursday it had immediately reported the incident that led to the firings to the New York Fed.

The junior banker had been employed with the bank for less than four months, Goldman said.

The confidential information provided Goldman a window into the New York Fed's private insights, including details about at least one of the bank's clients, the New York Times reported, citing lawyers familiar with the matter.(http://nyti.ms/1yVpoq6)

It is unclear whether Goldman's bankers used the information, the Times added.

The "revolving door" relationship between Goldman and other government agencies such as the New York Fed has been a source of criticism in the past, with frequent movement of employees between the bank and its regulators.

Current New York Fed President William Dudley, for example, was Goldman's chief economist until 2005.

In an internal memo obtained by Reuters, Goldman said the proper handling of confidential information was among its highest priorities and that it had a specific policy prohibiting an employee's use of information obtained from former employers.

Goldman added that it was reviewing its policies regarding hiring staff from government institutions to ensure they were effective and robust.

The New York Fed said in a statement it had detailed rules and controls for protecting confidential information.

"Of course, we also know that we are not perfect, that information today is more difficult to safeguard, and we are resolute to learn from our experiences." (Additional reporting by Rama Venkat Raman and Avik Das; Editing by Rodney Joyce and Saumyadeb Chakrabarty)

Arizona AG Sues General Motors For $3 Billion For Allegedly Concealing Defects To Avoid Recalls

(Reuters) - Arizona State filed a lawsuit against General Motors Co (GM.N), claiming the carmaker put the public at risk by concealing safety defects to avoid the cost of recalls.

Arizona was seeking an estimated $3 billion from GM, the New York Times reported.

Arizona Attorney General Tom Horne said civil penalties could be up to $10,000 per violation. Hundreds of thousands of "unsuspecting" car owners and lessees had been driving unsafe vehicles, he said in a statement.

GM was not available for comment outside of regular U.S. business hours. The New York Times quoted spokesman James Cain as saying GM had not had a chance to assess the complaint.

GM has been hit by a slew of lawsuits this year since it announced the recall of 2.6 million vehicles because a problem with the ignition switch could cause it to slip out of position, cutting power to air bags, steering and brakes.

The recalls have grown to encompass numerous problems affecting millions of vehicles. About 300,000 of the vehicles recalled this year were registered in Arizona, the New York Times reported.

The attorney general said the case was the first by a U.S. state against GM for its alleged role in suppressing knowledge of defects and not recalling vehicles in a timely manner.

The state cited ignition switches and numerous other car parts, including airbags, wiring, brake lights and seat belts.

Though many issues relate to cars produced before GM went bankrupt, Horne said "New GM" was liable because it had concealed known safety defects.

"New GM was not born innocent," he said in the filing.

GM has argued it should not face lawsuits based on safety issues on cars made before its 2009 bankruptcy.

The company is running a compensation program for the faulty ignition switches.

Arizona argued consumers lost money because GM vehicles fell in value. It also said GM Chief Executive Mary Barra, while head of product development, was informed in 2011 of a safety defect in the electronic power steering of several models.

"Despite 4,800 consumer complaints and more than 30,000 warranty repairs, GM waited until 2014 to disclose this defect," the filing said.

The case is State of Arizona vs General Motors LLC, Case No. CV2014-014090, the Superior Court of the State of Arizona, County of Maricopa.

(Reporting by Rama Venkat Raman in Bangalore; Writing by Rodney Joyce and Robin Paxton; Editing by Saumyadeb Chakrabarty)

If Pimco Were A Country, It Would Be The Most Unequal Place On The Planet

The main force driving income inequality in America is the skyrocketing pay of not the 1 percent, but the 0.1 percent and the 0.01 percent. We just got a prime example of that.

Bill Gross and Mohamed El-Erian, former top executives at Pacific Investment Management Co., the nation's largest bond-fund manager, received $290 million and $230 million bonuses, respectively, in 2013, according to a report last week by Bloomberg View's Barry Ritholtz.

Massive pay for the financial elite has become so routine that individual salaries are rarely shocking any more. These were big enough to cut through the torpor. Gross and El-Erian alone made 17 percent of all the pay given to Pimco employees in 2013, according to Ritholtz's report, which was based on leaked internal documents. The top six employees at Pimco took home a quarter of the pay given to 2,462 employees.

Bill Gross has publicly decried rising income inequality, and yet even by financial-industry standards, pay at Pimco is very unequal. In fact, by our estimates, if the firm were its own country, it would be by far the most income-unequal country in the world. And on a smaller scale, if Pimco were a county, it would be the most unequal county in America. These are conservative estimates -- tweak them at all, and Pimco would look more unequal.

This is evidence of what researchers like Emmanuel Saez have been saying about income inequality: Even the merely wealthy are losing ground to the new income elite. That income elite is, like the top earners at Pimco, by and large a financial industry elite.

Pimco claimed that Ritholtz's report was wrong, but didn't offer any numbers of its own. The firm doesn't disclose its pay, so it's hard to know for sure exactly how unequal that pay really is. But it is possible to do a rough calculation of its pay distribution, based on what we think we know about pay at the very top and how much money is divided among the rest of the staff.

There's a full explanation of how I arrived at Pimco's income distribution at the bottom of the post. Suffice to say, for now, that this distribution is fairly typical of financial firms like Pimco, according to Raghavendra Rau, a finance professor at Cambridge University who studies executive pay.

Huge payouts at the top, combined with relatively flat pay at lower levels, give employees an "incredible incentive to get into the top" of the pay scale, Rau said in an interview with HuffPost. Such a pay scheme also gives employees at the top a "huge incentive to stay at the top. It’s a matter of getting these guys to work really hard."

With everyone working incredibly hard to move up or maintain their place at the top, Rau said, “it becomes a treadmill... everyone is working their butts off to stay in the same place.”

Pimco did not respond to The Huffington Post's request for comment. Janus, Bill Gross' current employer, declined to comment. Gross could not immediately be reached for personal comment. Mohamed El-Erian and Allianz, his current employer, did not respond to The Huffington Post's requests for comment.

According to my calculations, and using the most conservative assumptions possible about Pimco's pay, the company's "Gini coefficient" -- a way of measuring and comparing inequality, where 1 represents complete inequality and 0 complete equality -- is an exorbitantly high 0.769. By way of comparison, one of the world's least-equal economies, South Africa, has a Gini coefficient of 0.631, according to the World Bank. The Gini coefficient for the U.S., based on the latest U.S. Census American Community Survey, is 0.476. New York County -- a.k.a. Manhattan -- is tied for the highest county-level Gini in the U.S. at just over 0.6.

Here’s the chart that helps put this in perspective. It’s called a Lorenz curve. It shows what percentage of a population gobbles up what percentage of total income. In a world of perfect equality, it would show a straight line from the lower left-hand corner to the upper right-hand corner. In the real world, where inequality exists, it bows down and to the right and then spikes up at the end, representing how earners at the very top take up much of the income. The chart below compares perfect equality to inequality in the U.S. and at Pimco:

As you can see, the pay distribution is seriously warped at Pimco. 70 percent of Pimco employees make just 5.7 percent of the total income, while 0.3 percent of the employees – six people – take home a quarter of all the pay.

Because the Lorenz curve might be kind of confusing for the uninitiated, here’s the same data in pie charts:

(The percentages correspond to the portion of the population; the size of the slices shows how much income they receive)

In the United States -- where income inequality is relatively high compared to other developed economies -- the top 20 percent take home about half the income. At Pimco, based on Ritholtz's reporting on the size of the bonus pool for the top 60 employees, the top 3 percent take home at least half the income.

A hedge-fund executive once said of Goldman Sachs: “The amazing thing about Goldman... is not that a few talented people make $20 million -- it’s all the mediocre talents that make over $1 million.”

The amazing thing about Pimco is that some talented people make $20 million, while once-extraordinary talents that have recently had mediocre results can make $290 million.

___________________________________________________________

*Some explanation and caveats about the distribution of income at Pimco:

The figure on bonuses for the top six employees comes from Ritholtz’s reporting. Ritholtz also reported that the total bonus pool for Pimco’s top 60 employees (known as managing directors), including the six whose bonuses he specified, was $1.5 billion. Senior employees in the finance industry receive an insignificant salary relative to the size of their bonuses. Adding details of these top earners' salaries would likely have almost no impact on the calculations. If anything, adding salaries would likely make inequality slightly higher.

I made the conservative assumption that the remaining portion of that $1.5 billion was equally split among the remaining 54 managing directors. That’s $14.7 million per MD. It's not unreasonable to assume that large swaths of Pimco's most senior employees are awarded almost equal bonuses, according to Cambridge's Raghavendra Rau.

To estimate the salaries for the remaining employees, I assumed that the rest of the $3 billion in revenue that Pimco withholds from its parent company, Allianz, is used to pay the rest of its employees. This is another conservative assumption: If Pimco paid less than $3 billion to employees, inequality would be worse than my calculations indicate.

Pimco has 2,462 employees. 758 of them are investment professionals, including 60 managing directors. For the 1,704 support staff, I followed Felix Salmon’s assumption that they make $100,000 each. Some, of course, make more and some less, but this is a very generous average income. And averaging it this way understates inequality at Pimco.

For the 698 non-managing-director investment professionals, I assumed they equally split what was left of the pay pool after the MDs got their $1.5 billion, and the support staff got their $100,000 each. That works out to $1.9 million per person.

To be clear, changing these assumptions would change the picture of inequality at Pimco -- but changing these assumptions would likely make that picture look even worse.

(h/t to Felix Salmon for suggesting calculating Pimco’s Gini coefficient. And huge, huge thanks to Guan Yang and Thomas Hauner, PhD students at NYU in finance and The Graduate Center at CUNY in economics, respectively, for reviewing my calculations and suggesting smart refinements.)