Wall Street Fat Cats Are Trying to Pocket Billions in Bailout Cash

http://www.alternet.org/workplace/106195/wall_street_fat_cats_are_trying_to_pocket_billions_in_bailout_cash/

The election results pretty much confirmed the extent to which Main Street is rightly livid about the Wall Street mentality that led to our financial crisis. During his historic victory speech, President-elect Barack Obama told supporters, and the rest of the world, "If this financial crisis taught us anything, it's that we cannot have a thriving Wall Street while Main Street suffers."

But, it seems that Wall Street didn't get that memo. It turns out that the nine banks about to be getting a total equity capital injection of $125 billion, courtesy of Phase I of The Bailout Plan, had reserved $108 billion during the first nine months of 2008 in order to pay for compensation and bonuses (PDF).

Paying Wall Street bonuses was not supposed to be part of the plan. At least that's how Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson explained it to Congress and the American people. So, on Oct. 1, when the Senate, including Obama, approved the $700 billion bailout package, the illusion was that this would magically loosen the credit markets, and with taxpayer-funded relief, banks would first start lending to each other again, and then, to citizens and small businesses. And all would be well.

That didn't happen. Which is why it's particularly offensive that the no-strings-attached money is going to line the pockets of Wall Street execs. The country's top investment bank (which since Sept. 21 calls itself a bank holding company), Goldman Sachs, set aside $11.4 billion during the first nine months of this year -- slightly more than the firm's $10 billion U.S. government gift -- to cover bonus payments for its 443 senior partners, who are set to make about $5 million each, and other employees.

Jesus christ. That is fucking criminal.

people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

Don't even fucking try that line of argument. They're paid enough to attract the best talent already.

Also, clearly, you also don't understand that they're taking this money from the bailout... or maybe you think that's alright. Obviously these executives have shown that they've earned that bonus, right? I mean, look at how well their companies are performing.

TheWoerus wrote:

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

Don't even fucking try that line of argument. They're paid enough to attract the best talent already.

Also, clearly, you also don't understand that they're taking this money from the bailout... or maybe you think that's alright. Obviously these executives have shown that they've earned that bonus, right? I mean, look at how well their companies are performing.

yes, they are. and this news article is them trying to preserve that. i already know a number of people who are fearful they wont get paid this year and who are planning to leave their employer if they dont. what joe bloggs sees is failing banks and huge bonuses. what joe bloggs doesnt see is that his idea of a bank is completely wrong. the retail [high street] banks are minnows. IB divisions dwarf retail banks in both earnings and influence, and thats where the best people are. Did all those guys making hundreds of billions all turn useless overnight? no, they were left exposed by a handful of bad decisions in positions they couldnt get out of. The very last thing the banks need to be doing right now is forcing their top employees to leave at the very time they need them most.

unfortunately, all your average citizens sees is blah blah......city bonuses....blah blah

Pennzoil GT-R wrote:

TheWoerus wrote:

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

Don't even fucking try that line of argument. They're paid enough to attract the best talent already.

Also, clearly, you also don't understand that they're taking this money from the bailout... or maybe you think that's alright. Obviously these executives have shown that they've earned that bonus, right? I mean, look at how well their companies are performing.

yes, they are. and this news article is them trying to preserve that. i already know a number of people who are fearful they wont get paid this year and who are planning to leave their employer if they dont. what joe bloggs sees is failing banks and huge bonuses. what joe bloggs doesnt see is that his idea of a bank is completely wrong. the retail [high street] banks are minnows. IB divisions dwarf retail banks in both earnings and influence, and thats where the best people are. Did all those guys making hundreds of billions all turn useless overnight? no, they were left exposed by a handful of bad decisions in positions they couldnt get out of. The very last thing the banks need to be doing right now is forcing their top employees to leave at the very time they need them most.

unfortunately, all your average citizens sees is blah blah......city bonuses....blah blah

Wow.

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

BULL SHIT!!!!!

If these god damn banks were so successful they would not need govt. handouts. They took the money to use for their own corrupt cronyism. Stop making excuses for cronyism bordering on the criminal Penz. Even at say 1/10th the current compensation these bankers would still be among the highest paid execs in the world. In the real world they would have been FIRED along time ago.

Les_Vipers_rule wrote:

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

BULL SHIT!!!!!

If these god damn banks were so successful they would not need govt. handouts. They took the money to use for their own corrupt cronyism. Stop making excuses for cronyism bordering on the criminal Penz. Even at say 1/10th the current compensation these bankers would still be among the highest paid execs in the world. In the real world they would have been FIRED along time ago.

les stop with the rants. this is something im involved in every day so i know what im talking about. you have retail banks and investment banks, some independent some arms of one large bank. the retail banks are the ones that gave all the shitty loans out in the first place. the investment banks are the ones that pay the big money. through the complex world of financial markets which im sure nobody really understands, they are the ones that keep the world turning. they NEED to retain the hotshots, or else the cogs will grind to a halt. and to address one common misconception....not everyone is paid millions. most traders earn mid 6 figures, and they earn ALOT more than the other 99% of employees. so, it would be quite easy for various oil/energy/telcoms/pharmaceuticals/food companies to poach them, considering money is far from the only thing traded on exchanges.

ps. the guys that made the bad decisions were fired a long time ago...if you think the 'real world' is even close to how cut throat finance is you're deluded. yet, why fire an entire workforce thats being earning billions for years because 0.0001% of them made some bad decisions and were fired long ago. thats just stupid.

If they are that good,I don't see how and why they need the goverment to help them,to be honest.

Pete.Z wrote:If they are that good,I don't see how and why they need the goverment to help them,to be honest.

because losses in finance are not proportionate to how much is invested by who. If i really wanted to and had the opportunity to make the right [wrong] trade, i could pretty much single handedly bring down the biggest bank in the world. A single speculative bet that might have earned a few million can cost billions if it goes the wrong way, and you might have only put a few million down on it in the first place...look at Goldman Sachs and VW for a recent example. This econony is down to a few people who got it wrong, the vast majority never put a foot out of place

At the end of the day, executives have no right to expect bonuses in the current climate. And especially not tax payer funded bonuses. Which is essentially what's going on here.

Pennzoil GT-R wrote:

Les_Vipers_rule wrote:

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

BULL SHIT!!!!!

If these god damn banks were so successful they would not need govt. handouts. They took the money to use for their own corrupt cronyism. Stop making excuses for cronyism bordering on the criminal Penz. Even at say 1/10th the current compensation these bankers would still be among the highest paid execs in the world. In the real world they would have been FIRED along time ago.

les stop with the rants. this is something im involved in every day so i know what im talking about. you have retail banks and investment banks, some independent some arms of one large bank. the retail banks are the ones that gave all the shitty loans out in the first place. the investment banks are the ones that pay the big money. through the complex world of financial markets which im sure nobody really understands, they are the ones that keep the world turning. they NEED to retain the hotshots, or else the cogs will grind to a halt. and to address one common misconception....not everyone is paid millions. most traders earn mid 6 figures, and they earn ALOT more than the other 99% of employees. so, it would be quite easy for various oil/energy/telcoms/pharmaceuticals/food companies to poach them, considering money is far from the only thing traded on exchanges.

ps. the guys that made the bad decisions were fired a long time ago...if you think the 'real world' is even close to how cut throat finance is you're deluded. yet, why fire an entire workforce thats being earning billions for years because 0.0001% of them made some bad decisions and were fired long ago. thats just stupid.

I don't give crap about what you do as some junior level employee. These CEO's and other execs are now taking public money to feed themselves over-inflated incomes. They pushed for and created the base for this crisis and you think somehow they deserve the money. In my books you don't reward incompetence, cronyism and greed.

Penz, I don't know why you think I should be paying to keep the standard of living of the VP's of the troubled banks level, but I certainly resent it.

You don't need any geniuses to unwind the bad investments, you just need an army of moderately paid accountants.

Did anyone else catch the way Pennz tried to deprecate "mid-6 figure" salaries? The disconnect between that glib acknowledgement and the reality of life for 99.95% of people on earth is absolutely staggering.

Ahhh yes, let us absolve the bankers of any responsibility. It wasn't them who ruined their companies...it was their poor investments....made by them. The problem is that if we don't let them continue their lavish existences by funneling taxpayer money right into their pockets they will just up and leave! What then!? Clearly there will be no people to fill the void. Well no one save for the people out of work, and college students who will take any job they can get in a failing economy. If the bankers quit because they aren't able to fatten their wallets with free money given to them after they destroyed their fucking companies so be it. I'd rather watch the world burn.

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

If they were the best people we wouldn't be in this fucking hole. They're the greediest people.

there's plenty of blame for everybody.

i'm obviously pro-market/pro-capitalism, but the bankers and insurers gambled and lost. they levered up 50-1, got blown out, and now want the tax dollars to cover the losses. capitalist profits; socialized losses. that doesn't fly. the only reason capitalism works is because you have to let people get their faces ripped off when they do stupid shit. there's always collateral damage, such as the team members that were just following mandates from the directors, but that's how it is in every business.

the flip side is that banks typically defer senior executive compensation for periods that can extend to years, so they shouldn't lose any salary they earned in the good years. getting a bonus for getting blown up is ridiculous, though.

all i can say is i hope erin callan has the last fucking laugh, and i hope shitbags like dick fuld and chuck prince get aids.

i wish i was a bank exec, that's all i'm sayin'

Aristotle wrote:there's plenty of blame for everybody.

i'm obviously pro-market/pro-capitalism, but the bankers and insurers gambled and lost. they levered up 50-1, got blown out, and now want the tax dollars to cover the losses. capitalist profits; socialized losses. that doesn't fly. the only reason capitalism works is because you have to let people get their faces ripped off when they do stupid shit. there's always collateral damage, such as the team members that were just following mandates from the directors, but that's how it is in every business.

the flip side is that banks typically defer senior executive compensation for periods that can extend to years, so they shouldn't lose any salary they earned in the good years. getting a bonus for getting blown up is ridiculous, though.

all i can say is i hope erin callan has the last fucking laugh, and i hope shitbags like dick fuld and chuck prince get aids.

"In the good years"?

What good years? The whole last decade was built on a crumbling facade that was made to look as if it was solid but was made of proverbial sand. There were no good years only good delusions as like the ones a drug addict may feel until he/she crashes back down. This was the nonsense of Reaganomics which was itself put on hyper speed as per men like Greenspan, Graham and their cronies. Stupid every day citizens thought they too could all live like Kings and Queens accessing money from equity of their homes or by living off credit cards. The equity has dried up and the credit cards are maxed out. Fact is if you are a Joe the Plumber you are not rich and you won't likely become rich. You should not live like you are rich. 95% of society will at best live modest but suitable middle class lives. We won't be driving $60,000-$70,000 SUVs, we will drive $20-$30,000 cars. We won't live in mega homes with oh $100,000-$200,000 home theatres built in. We won't be sending our kids to elite private schools. This is only stuff of the top 5%. So lesson learned from the last decade or more? Live within your means, be more content and appreciate what you may have, use credit wisely, invest any money you have for such with logic and care, work to the ideals of your output and ability, adjust and advance in your live with sound reasoning and logic. Don't be ashamed of being a regular Joe. Take interest in govt. and the basic economy, hold govt., bureaucrats and corporate execs to account.

fucking assholes

GregTX wrote:Penz, I don't know why you think I should be paying to keep the standard of living of the VP's of the troubled banks level, but I certainly resent it.

You don't need any geniuses to unwind the bad investments, you just need an army of moderately paid accountants.

thats where most people get it wrong, moderately paid accountants cant just unwind the investments. or at least not without losing billions, they dont know the first thing about how financial markets work. if accountants went in and tried to sell all the positions overnight the markets would literally collapse in on themselves. it takes the skill of the very best traders to hedge out risk and unwind the positions without losing more than absolutely necessary. what noone seems to realise is that a handful of bankers got us in this shit...and the world wants to take it out on the rest of them. do you think everyone at lehmans was incompetent? of course they fucking werent, most of them were brilliant. they still are, and they're the people who understand the way the markets work and can get us out of this shit. if you send in an army of government paid monkeys to sit at a trading desk for the first time and let them loose on world markets the bank wont last more than a few days.

the bankers dont deserve the multi million bonuses theyre used to ill agree with that, and trust me they arent going to be getting them this year...some banks wont be paying anything out, but to say none of them deserve anything is just fucking ignorant

Aristotle wrote:there's plenty of blame for everybody.

i'm obviously pro-market/pro-capitalism, but the bankers and insurers gambled and lost. they levered up 50-1, got blown out, and now want the tax dollars to cover the losses. capitalist profits; socialized losses. that doesn't fly. the only reason capitalism works is because you have to let people get their faces ripped off when they do stupid shit. there's always collateral damage, such as the team members that were just following mandates from the directors, but that's how it is in every business.

the flip side is that banks typically defer senior executive compensation for periods that can extend to years, so they shouldn't lose any salary they earned in the good years. getting a bonus for getting blown up is ridiculous, though.

all i can say is i hope erin callan has the last fucking laugh, and i hope shitbags like dick fuld and chuck prince get aids.

you understand my 2 major points though right:

1. the banks NEED to keep the top guys to get them out of this shit

2. most front office guys are still making a fuck load of money, its a small handful that made the big gambles and lost vast sums

Where are these top people going to go if they leave because they don't think they're beign paid enough. I can't imagine many other banks around the world will be paying out huge bonuses anytime soon? If their multi-million dollar salaries aren't enough without even bigger bonuses, when the company is on it's knees, then fuck them, fuck them in their stupid asses.

dunnas wrote:Where are these top people going to go if they leave because they don't think they're beign paid enough. I can't imagine many other banks around the world will be paying out huge bonuses anytime soon? If their multi-million dollar salaries aren't enough without even bigger bonuses, when the company is on it's knees, then fuck them, fuck them in their stupid asses.

common misconception. people hear about some guys earning tens of millions and assume everyone earns that. i touched on it earlier...traders make up 0.1% of a banks workforce, and they earn far and away the most money...averaging somewhere around half a million a year depending on what bank they work for and what market they work in, with seniors obviously earning far more in some cases. the other 99.9% of employees earn low 6 figures for the most part if they're lucky. considering these people are by and large the brightest guys from the best schools, there's alot of industries out there that can stump up enough cash to tempt them away especially given the lack of job security in finance right now and the stressful nature of the job.

The article in the first post mentioned $5M bonuses each for 443 people, and that just for one company. That's what we're talking about, not people on 6 figures.

dunnas wrote:The article in the first post mentioned $5M bonuses each for 443 people, and that just for one company. That's what we're talking about, not people on 6 figures.

That article isnt really very credible for a number of reasons...its aimed at the mass public and is geared to get them wound up and annoyed. It bases its numbers around Goldman Sachs....who pay drastically higher salaries than anyone else because their profit per employee has always been about double that of any other bank. That article fails to mention they are planning to cut up to 30% of their workforce and is rife with assumptions. Not all of those 443 gets paid $5 million...some get much more, most get alot less. This is a company that employs 30,000 people total and cuts the bottom 10% every year to make sure they have only the best people. Given that the super senior guys of any large multinational are renumerated in the millions there's nothing odd about Goldman's paying the same when considering that the next largest industries' balance sheets are about a tenth the size of the average bank, and Goldmans have been more successful than any other bank over the past couple of decades.

Whoever wrote that article doesnt really know what's going on and it shows though the amount of opinion and assumption, because business journos just tend to be people who couldnt make it. Everyone is worried alot of bonuses arent going to get paid at all this year and its been accepted noone is going to get what they would have done in years gone by. The article mentions nothing of that which suggests whoever wrote it hasnt actually spoken to a single banker when writing it.

The fact remains though, traditionally the bulk of a banker's income comes from the bonus, and as usual, it will come out of profits made. They have never, nor will ever, pay huge bonuses out of money that results in a loss for the company.

Dunnas has always taken home 5% of what he makes each year, and this year works his ass off and makes $10 million. Ry, Aris, honor man and Wally all do the same.

Rod [i know he'll love the name choice] comes along and loses $50 million in a year through a single bad decision. Rod gets fired.

Do you 5 now think its fair that you shouldn't see a single cent of the money that you have worked 12 hour days all year to make just because Rod fucked up?

The bulk of a banks money comes from whats made on the trading floors, not what joe public sees on the high street. Implicit in the money made is certain costs to be offset against that, some of which is the cut to be paid to the man who made it. No different than the costs for the PC and office chair he made it on. Fair enough various inventory costs will be scaled down, as should the bonuses be. But to cut any of it off completely is ridiculous

Pennzoil GT-R wrote:

GregTX wrote:Penz, I don't know why you think I should be paying to keep the standard of living of the VP's of the troubled banks level, but I certainly resent it.

You don't need any geniuses to unwind the bad investments, you just need an army of moderately paid accountants.

thats where most people get it wrong, moderately paid accountants cant just unwind the investments. or at least not without losing billions, they dont know the first thing about how financial markets work. if accountants went in and tried to sell all the positions overnight the markets would literally collapse in on themselves. it takes the skill of the very best traders to hedge out risk and unwind the positions without losing more than absolutely necessary. what noone seems to realise is that a handful of bankers got us in this shit...and the world wants to take it out on the rest of them. do you think everyone at lehmans was incompetent? of course they fucking werent, most of them were brilliant. they still are, and they're the people who understand the way the markets work and can get us out of this shit. if you send in an army of government paid monkeys to sit at a trading desk for the first time and let them loose on world markets the bank wont last more than a few days.

the bankers dont deserve the multi million bonuses theyre used to ill agree with that, and trust me they arent going to be getting them this year...some banks wont be paying anything out, but to say none of them deserve anything is just fucking ignorant

I completely disagree. There is no way that we can rebuild the nonexistant value that these hedge funds built on. Housing value has evaporated. The losses can either be realized now or later. Individual companies may be worse off for letting accountants unwind the positions vs. crafty traders, but on the whole, the value in the end to the whole market will be the same regardless of who unwinds the positions. We have a good baseline for what the realistic value should be for housing (what it was on average before the 2000 bump, trending back linearly accounting for inflation mostly).

Its simple really. All the complexities of the market made it seem as though housing was a true growth industry when really it isn't.

Pennzoil GT-R wrote:Dunnas has always taken home 5% of what he makes each year, and this year works his ass off and makes $10 million. Ry, Aris, honor man and Wally all do the same.

Rod [i know he'll love the name choice] comes along and loses $50 million in a year through a single bad decision. Rod gets fired.

Do you 5 now think its fair that you shouldn't see a single cent of the money that you have worked 12 hour days all year to make just because Rod fucked up?

The bulk of a banks money comes from whats made on the trading floors, not what joe public sees on the high street. Implicit in the money made is certain costs to be offset against that, some of which is the cut to be paid to the man who made it. No different than the costs for the PC and office chair he made it on. Fair enough various inventory costs will be scaled down, as should the bonuses be. But to cut any of it off completely is ridiculous

Fair or not, I owe dunnas nothing for working his ass off to make $10 million for the company. Assuming Rod's loss of $50 million dollars makes it impossible for the company to pay dunnas, then the company was stupid to put that much risk in one person's hands. dunnas should work for a better company.

Listen Penz, my dad works for one of the companies that's getting bailed out and sits on the board of a local credit union. He knew the company he works for made a stupid stupid decision in regard to subprime loans and promptly started looking for a new job. When his company was about to get bought out by a rival, he risked losing his deferred compensation in the deal, bailout or no bailout, but he never thought taxpayers owed him that amount. Simply put, it was a risk to accept deferred compensation and he might have lost out anyway. The company did stupid things and deserved to fail and allow a better run company to manage the assets. He may have lost his job temporarily, but he could have found employment in the new companies that needed his division. In the end, he would have been just as well off probably. Now, the credit union he sits on the board of got the idea to start giving out subprime loans in the height of the mania, but because they would have had to modify their charter, they had to take the idea to the board of directors. The board, farsighted enough to see the problems with this arrangement, told the CEO "NO, YOU CANNOT SELL SUBPRIME LOANS!!" and because of this, they are at no risk of failing and in fact are doing booming business in new deposits and loans because of the major banks troubles. They were run well and were being rewarded for it before the bailout. Not that the bailout has stopped their booming business, but the idea that the monolithic mega banks MUST NOT FAIL is ludicrous. I don't think they should collapse and take the deposits with them, but that doesn't require a bailout, that requires proper regulation of bankruptcy laws.

In conclusion, nothing you say Penz can convince me the bailout as it is spelled out currently is anything but complete and utter horseshit.

Pennzoil GT-R wrote:

Aristotle wrote:there's plenty of blame for everybody.

i'm obviously pro-market/pro-capitalism, but the bankers and insurers gambled and lost. they levered up 50-1, got blown out, and now want the tax dollars to cover the losses. capitalist profits; socialized losses. that doesn't fly. the only reason capitalism works is because you have to let people get their faces ripped off when they do stupid shit. there's always collateral damage, such as the team members that were just following mandates from the directors, but that's how it is in every business.

the flip side is that banks typically defer senior executive compensation for periods that can extend to years, so they shouldn't lose any salary they earned in the good years. getting a bonus for getting blown up is ridiculous, though.

all i can say is i hope erin callan has the last fucking laugh, and i hope shitbags like dick fuld and chuck prince get aids.

you understand my 2 major points though right:

1. the banks NEED to keep the top guys to get them out of this shit

2. most front office guys are still making a fuck load of money, its a small handful that made the big gambles and lost vast sums

I think you've missed what's occurred at just about every major financial institution, at the expense of the general public. If Goldman Sachs can afford to set aside 11 billion dollars in bonuses, it doesn't need 10 billion dollars in tax payer charity.

Pennzoil GT-R wrote:

Aristotle wrote:there's plenty of blame for everybody.

i'm obviously pro-market/pro-capitalism, but the bankers and insurers gambled and lost. they levered up 50-1, got blown out, and now want the tax dollars to cover the losses. capitalist profits; socialized losses. that doesn't fly. the only reason capitalism works is because you have to let people get their faces ripped off when they do stupid shit. there's always collateral damage, such as the team members that were just following mandates from the directors, but that's how it is in every business.

the flip side is that banks typically defer senior executive compensation for periods that can extend to years, so they shouldn't lose any salary they earned in the good years. getting a bonus for getting blown up is ridiculous, though.

all i can say is i hope erin callan has the last fucking laugh, and i hope shitbags like dick fuld and chuck prince get aids.

you understand my 2 major points though right:

1. the banks NEED to keep the top guys to get them out of this shit

2. most front office guys are still making a fuck load of money, its a small handful that made the big gambles and lost vast sums

oh, i agree that you make some valid points. most talented front guys are an important asset that will always generate revenue.

i'm mainly referring to the risk managers and the ceos. people like fuld and prince and numerous others are the ones that allowed the derivatives guys to go nuts. they were fools and should have been fired a long time ago. the fact that those clowns from long term capital management could pull some BS math and lose a ton a decade ago, only to have these other dolts continue to do the same thing, is unacceptable. we have a rash of horrible ceos in our firms. they need to go, and they shouldn't get a dime of bonus money.

the whole thing is a huge mess. it's going to be interesting to see how much new regulation comes out of this. frankly, i think the days of 8-figure wall street bankers is closer to the end than the beginning. i'm expecting leverage regulations to get really tough in the coming years. however, if it doesn't, then we'll just have this little party all over again in about 15 years.

Aristotle wrote:

Pennzoil GT-R wrote:

Aristotle wrote:there's plenty of blame for everybody.

i'm obviously pro-market/pro-capitalism, but the bankers and insurers gambled and lost. they levered up 50-1, got blown out, and now want the tax dollars to cover the losses. capitalist profits; socialized losses. that doesn't fly. the only reason capitalism works is because you have to let people get their faces ripped off when they do stupid shit. there's always collateral damage, such as the team members that were just following mandates from the directors, but that's how it is in every business.

the flip side is that banks typically defer senior executive compensation for periods that can extend to years, so they shouldn't lose any salary they earned in the good years. getting a bonus for getting blown up is ridiculous, though.

all i can say is i hope erin callan has the last fucking laugh, and i hope shitbags like dick fuld and chuck prince get aids.

you understand my 2 major points though right:

1. the banks NEED to keep the top guys to get them out of this shit

2. most front office guys are still making a fuck load of money, its a small handful that made the big gambles and lost vast sums

oh, i agree that you make some valid points. most talented front guys are an important asset that will always generate revenue.

i'm mainly referring to the risk managers and the ceos. people like fuld and prince and numerous others are the ones that allowed the derivatives guys to go nuts. they were fools and should have been fired a long time ago. the fact that those clowns from long term capital management could pull some BS math and lose a ton a decade ago, only to have these other dolts continue to do the same thing, is unacceptable. we have a rash of horrible ceos in our firms. they need to go, and they shouldn't get a dime of bonus money.

the whole thing is a huge mess. it's going to be interesting to see how much new regulation comes out of this. frankly, i think the days of 8-figure wall street bankers is closer to the end than the beginning. i'm expecting leverage regulations to get really tough in the coming years. however, if it doesn't, then we'll just have this little party all over again in about 15 years.

well the way its going to go now and what jamie dimon said was that they're going to aggresively differentiate. if you hit budget you're not going to get anything, and the big bonuses will only go to the guys who make massively over budget. i think thats probably the best trade off to cutting bonus costs whilst still retaining the best people. the worst thing they could possibly do is remove the incentive to take on risk

i agree with the differentiation. pay for performance is really the only way to go. and, frankly, i'm all for high salaries, if they perform. there were too many ceos that were fucking around playing golf and bridge, however.

the good thing about the markets is risk always prices itself, and i don't think it's going anywhere, even in the face of tougher regulation. i do think the levels of risk, along with the premiums, will come down, though.

the problem recently was that the real risk was effectively hidden deliberately. those that took it, without understanding it, deserve to get nothing. it's equivalent to someone handing you a box with unknown contents and telling you they'll give you $100 to keep it in your mother's house. problem was there was a grenade, with a pulled pin, in the box.

Aristotle wrote:i agree with the differentiation. pay for performance is really the only way to go. and, frankly, i'm all for high salaries, if they perform. there were too many ceos that were fucking around playing golf and bridge, however.

the good thing about the markets is risk always prices itself, and i don't think it's going anywhere, even in the face of tougher regulation. i do think the levels of risk, along with the premiums, will come down, though.

the problem recently was that the real risk was effectively hidden deliberately. those that took it, without understanding it, deserve to get nothing. it's equivalent to someone handing you a box with unknown contents and telling you they'll give you $100 to keep it in your mother's house. problem was there was a grenade, with a pulled pin, in the box.

the problem i have is the people who were taking the risk are not the ones being blamed for it now. the traders in the big investment houses are ultra risk averse and always hedge themselves out....they rarely make mistakes and earn huge bonuses. its the fucking monkeys sat in retail banks and mortgage lenders miles away from wall street and london who were buying all the crap assets without really knowing what they were exposing themselves to. now its all gone bad everyone sees the huge bonuses in wall street and the losses in the retail banks and puts 2+2 together to end up with 5.

its long been the tradition that you work your ass off for 10 years and when thats over live the easy life and reap the rewards of the new generation of hardworkers until you retire and its their turn to fill your shoes. unfortunately, as those super senior guys have at least as much power as any government i dont see that really changing in the long run.

TheWoerus wrote:

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

Don't even fucking try that line of argument. They're paid enough to attract the best talent already.

Also, clearly, you also don't understand that they're taking this money from the bailout... or maybe you think that's alright. Obviously these executives have shown that they've earned that bonus, right? I mean, look at how well their companies are performing.

Pennz is more vile than I thought

Pennzoil GT-R wrote:

TheWoerus wrote:

Pennzoil GT-R wrote:people dont seem to understand that the reason the banks are so successful is because the best people work there. start limiting salaries and you'll be left with shit people when the good ones leave to go and work in countries/industries that wont limit their earnings.

plus, if a person earns $100 million for his company singlehandedly, who the fuck is some politician to tell him he cant take a few % of that for himself. if he cant take a cut, where is the incentive to do a good job? end result is similar to above...the banks that enforce it will start shrinking and failing because the best people leave.

Don't even fucking try that line of argument. They're paid enough to attract the best talent already.

Also, clearly, you also don't understand that they're taking this money from the bailout... or maybe you think that's alright. Obviously these executives have shown that they've earned that bonus, right? I mean, look at how well their companies are performing.

yes, they are. and this news article is them trying to preserve that. i already know a number of people who are fearful they wont get paid this year and who are planning to leave their employer if they dont. what joe bloggs sees is failing banks and huge bonuses. what joe bloggs doesnt see is that his idea of a bank is completely wrong. the retail [high street] banks are minnows. IB divisions dwarf retail banks in both earnings and influence, and thats where the best people are. Did all those guys making hundreds of billions all turn useless overnight? no, they were left exposed by a handful of bad decisions in positions they couldnt get out of. The very last thing the banks need to be doing right now is forcing their top employees to leave at the very time they need them most.

unfortunately, all your average citizens sees is blah blah......city bonuses....blah blah

The first reaction I had to pennz' post was "I can't believe this guy's arrogance. He sees himself as someone over joe bloggs. He is an educated, elite noble so superior to the dirty, ignorant masses, kind of like the despotic kings of Europe".

Then that got eclipses by the disturbing fact that his viewpoint is so distorted. All those "fat cats" and whatnots are victims on his mind.

I am convinced that people like pennz caused the anger that lead to, among other movements, the french revolution.

Turbofrog wrote:Did anyone else catch the way Pennz tried to deprecate "mid-6 figure" salaries? The disconnect between that glib acknowledgement and the reality of life for 99.95% of people on earth is absolutely staggering.

Exactly. His appreciation of the world is so distorted.

Pennzoil GT-R wrote:

Aristotle wrote:i agree with the differentiation. pay for performance is really the only way to go. and, frankly, i'm all for high salaries, if they perform. there were too many ceos that were fucking around playing golf and bridge, however.

the good thing about the markets is risk always prices itself, and i don't think it's going anywhere, even in the face of tougher regulation. i do think the levels of risk, along with the premiums, will come down, though.

the problem recently was that the real risk was effectively hidden deliberately. those that took it, without understanding it, deserve to get nothing. it's equivalent to someone handing you a box with unknown contents and telling you they'll give you $100 to keep it in your mother's house. problem was there was a grenade, with a pulled pin, in the box.

the problem i have is the people who were taking the risk are not the ones being blamed for it now. the traders in the big investment houses are ultra risk averse and always hedge themselves out....they rarely make mistakes and earn huge bonuses. its the fucking monkeys sat in retail banks and mortgage lenders miles away from wall street and london who were buying all the crap assets without really knowing what they were exposing themselves to. now its all gone bad everyone sees the huge bonuses in wall street and the losses in the retail banks and puts 2+2 together to end up with 5.

its long been the tradition that you work your ass off for 10 years and when thats over live the easy life and reap the rewards of the new generation of hardworkers until you retire and its their turn to fill your shoes. unfortunately, as those super senior guys have at least as much power as any government i dont see that really changing in the long run.

yeah, that's true. pretty much anyone on wall st. is considered to be tainted at the moment. this always happens, though. it did in the junk bond days, the LTCM days, and the dot-com days. just needs a few years for the dust to settle.

Pennz is so fucked up.

The only reason he is defending those CEO's and bankers is because he dreams to be one of them. After dropping out of law school, he somehow got an entry level job in the financial industry, and now he feels like "one of them". That explains how he is so empathetic with their suffering, they're "poor little victims exposed", "they need their poor, mid 6 figure payments",etc.

I can picture pennz in a youtube video, crying "leave britney the bankers alone!" while drinking his own tears.

Thing is, if the same case had lawyers (what pennz could never be), politicians or whatnot, pennz would be holding a torch in anger and taking no prisoners. Scary.

Pennz is like the cadillac salesman that would look down on someone telling him "you could never afford one of these cars, sir" to a potential customer, forgetting that he couldn't afford it as well. Pennz is like the snobby server in a top of the line restaurant who looks down on a client for not ordering the most expensive wine, when he couldn't even buy a beer himself.

Pennz, I got bad news for you, you're not "one of them", and you will never be one of them. You're a pawn in that industry, and your level of arrogance and ignorance will never let you progress. I will kick myself in the balls if you ever become one of those CEO's or bankers earning say, 700K a year.

hahaha

speaking of that, here's a funny vid:

http://www.break.com/index/hot-college-chick-pulls-classic-prank.html