Thread: Greed.

Surprise, surprise. The recipients of the massive bailout of $700 billion of US taxpayers money have already earmarked over 10% of that money to pay themselves- most of which will be in discretionary bonuses. Meanwhile, at Deutsche Bank in Socialist Germany the CEO and senior Traders have voluntarily waived millions of Euro's in annual payouts.

Check this out-
"At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank."

I will reproduce this article on full, and as an ex Investment Banker myself I can tell you I think this is nothing short of Criminal :-

Wall Street banks in $70bn staff payout

Pay and bonus deals equivalent to 10% of US government bail-out package


Financial workers at Wall Street's top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.

Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government's cash has been poured in on the condition that excessive executive pay would be curbed.

Pay plans for bankers have been disclosed in recent corporate statements. Pressure on the US firms to review preparations for annual bonuses increased yesterday when Germany's Deutsche Bank said many of its leading traders would join Josef Ackermann, its chief executive, in waiving millions of euros in annual payouts.

The sums that continue to be spent by Wall Street firms on payroll, payoffs and, most controversially, bonuses appear to bear no relation to the losses incurred by investors in the banks. Shares in Citigroup and Goldman Sachs have declined by more than 45% since the start of the year. Merrill Lynch and Morgan Stanley have fallen by more than 60%. JP MorganChase fell 6.4% and Lehman Brothers has collapsed.

At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank.

In the first nine months of the year Citigroup, which employs thousands of staff in the UK, accrued $25.9bn for salaries and bonuses, an increase on the previous year of 4%. Earlier this week the bank accepted a $25bn investment by the US government as part of its bail-out plan.

At Goldman Sachs the figure was $11.4bn, Morgan Stanley $10.73bn, JP Morgan $6.53bn and Merrill Lynch $11.7bn. At Merrill, which was on the point of going bust last month before being taken over by Bank of America, the total accrued in the last quarter grew 76% to $3.49bn. At Morgan Stanley, the amount put aside for staff compensation also grew in the last quarter to the end of August by 3% to $3.7bn.

Days before it collapsed into bankruptcy protection a month ago Lehman Brothers revealed $6.12bn of staff pay plans in its corporate filings. These payouts, the bank insisted, were justified despite net revenue collapsing from $14.9bn to a net outgoing of $64m.

None of the banks the Guardian contacted wished to comment on the record about their pay plans. But behind the scenes, one source said: "For a normal person the salaries are very high and the bonuses seem even higher. But in this world you get a top bonus for top performance, a medium bonus for mediocre performance and a much smaller bonus if you don't do so well."

Many critics of investment banks have questioned why firms continue to siphon off billions of dollars of bank earnings into bonus pools rather than using the funds to shore up the capital position of the crisis-stricken institutions. One source said: "That's a fair question - and it may well be that by the end of the year the banks start review the situation."

Much of the anger about investment banking bonuses has focused on boardroom executives such as former Lehman boss Dick Fuld, who was paid $485m in salary, bonuses and options between 2000 and 2007.

Last year Merrill Lynch's chairman Stan O'Neal retired after announcing losses of $8bn, taking a final pay deal worth $161m. Citigroup boss Chuck Prince left last year with a $38m in bonuses, shares and options after multibillion-dollar write-downs. In Britain, Bob Diamond, Barclays president, is one of the few investment bankers whose pay is public. Last year he received a salary of £250,000, but his total pay, including bonuses, reached £36m.

Wall Street bankers in line for $70bn payout | Business | The Guardian

This isn't Capitalism, this is Corporate Crime. After losing billions of dollars of investors money, after being bailed out by $700bn (at least) from the public purse, after being at the core of propelling much of the worlds economy into recession- the Boys are not even tightening their belt. Thats for you to do, Sucker.

Obama could have a field day with this, but unfortunately he probably won't- Wall St has come out strongly for the Dem's in this election overall.

The USA is indeed a welfare state for the Corporate sector and the Rich- and the average US citizen who is funding it gets no say in the matter. Democracy at it's finest.

Not a bad deal when you think of it-
I take the risk, so if I win I keep the winnings. Fair enough.
But if I lose, you take the loss.
You buy my shit at inflated prices, I'll keep the good stuff.
And I don't drop my huge Bonus, because you have to pay to retain Valuable Guys like us.

Capitalism at it's finest.

^I used to get my little brother on this type of thing everytime.

"Heads I win, tails you lose"!

Being an intelligent lad like the public he soon caught on and insisted we change to,

"Tails you win, heads I lose"!

Where did the Guardian gets its numbers? Fek, the banks haven't even reported 3Q08 earnings yet. This is a crock unless they tell where they got the data. The Guardian is a socialist rag that likes to spew. Gimme the data to back it up. This info won't even be in the 10-Qs for 3Q. Total unsubstantiated muck.

^ The Guardian is one of the Worlds most respected newspapers Jet, and I'm sure you know that. They don't just pluck something out of thin air.

Originally Posted by sabang

Pay plans for bankers have been disclosed in recent corporate statements

It would seem that is their primary source. Hopefully this will be picked up on, and in the resultant chorus of indignation these unconscionable bonus proposals thrown out the window- especially after the example that has been set by Deutsche Bank.

^ Ya, I checked recent corporate statements for a few banks after I read your first post. There is no line specifically for compensation as I know. Please tell me how you would extrapolate comp from the general forecasts, even general expenses.
The Guardian is a socialist rag. Should have been at least three verified sources in that article. All I found was "one source said." Journalistic rules demand three verified sources. I'm part of that biz, I know.

Don't read newspapers and don't even have a personal bank account.
Don't read statistics and don't know how to post a linky here.
No credit cards and certainly no exposure to any banks.

I reckon I'm pretty smart at the end of the day!

Jet crying for a newspaper to have sources, three no less, but she laps up right wing blogs whos' three sources are usually..........well, other right wing blogs.

^ Nice try. Even if I have quoted blogs, it's for an opinion not fact.

Norts, I wouldn't call Fox or the Chicago Tribune libby (altho the Trib now supports BO), but every article must have at least three quoted sources in it. Even when I write for a private investor rag, that's the minimum.
As I worked in the industry, I do know that financial firms usually work out their comp plans around October each year, but these are top secret. I'd like to know how the Guardian got their hands on the info and came up with a figure of $70 bil. And how many firms and people.

Originally Posted by Jet Gorgon

I'd like to know how the Guardian got their hands on the info and came up with a figure of $70 bil. And how many firms and people.

Agree, would like to see how they derived the $70B myself. Too often the media is far to lax in appropriate journalistic practice. Seems these days getting the story out first takes precedence over accuracy. This applies to both liberal and conservative media equally IMO.

I've got to stand up for The Guardian here- one of the reason it carries such high intellectual street cred is that it employs high quality, high brow journalism, but is definitely not afraid to upset the powers that be, or speak out against the prevailing trend. It has been the originator of many a scoop, or leak because of it's status accordingly.

This was an article I quoted, not an Editorial- there is something behind it. I should also point out, The Guardian has been on somewhat of a crusade against the vastly inflated salary packages that were floating about in the City- particularly in the private equity business- and the minimal amounts of tax they were able to get away with paying. So if someone in the know wanted to get the word out about the Investment Banks proposals, they would logically speak to the Guardian.

Agree with Norts -- it is both sides of the media, altho I do trust the WSJ, The Economist and the FT. Business Week also has some poignant info at times, and they always give sources.
Also agree with Sir Burr. But look at it this way, we will never have liens on our property or holdings.
Sabang, the Guardian may be stuffed with intellectuals from the liberal ward of the ivory towers, but making unsubstantiated claims, especially when $ is involved, is unprofessional and misleading, IMO. The Guardian has always been a critic of the Street and the City.

People need to start thinking for themselves and determine what they can afford. Credit has been too easy. Now it's not and values on everything from stocks to property have fallen just when more people are losing their jobs. Nothing will change until the economies turn up. If nobody is lending at reasonable rates, if at all, it ain't gonna happen.

Originally Posted by attaboy

Originally Posted by sabang

Capitalism at it's finest.

No, it's years of teaching moral relativism in the universities that when applied gets translated to: there is no right or wrong, make it up as you go. It's the fluidity of liberalism that isn't bound by ethics and morals. I was very upset to hear that Glass-Steagall had been repealed. When I learned that the uptick rule on shorting stocks has been removed, I thought what are people thinking, is this some sort of attempt to curb the "irrational exuberance" of the late 90s? It was liberalism "change as a constant from preexisting conditions and domestic mores". 'It would be different this time around.'

Now I've heard it all! It's all the fault of the commie-pinko-liberals. Is there nothing that can't be blamed on them?

Originally Posted by DrB0b

And so we learn from history generations have to fight, and those who crave for mastery must be faced down on sight. And if that means by words, by fists, by stones or by the gun, remember those who stood up for their daughters and their sons.

Listen to the sound of marching feet and the voices of the ghosts of Cable Street. I quite like this!

Originally Posted by DrB0b

It's called investigative journalism

So the mods don't trash this for being off topic.

The Watergate piece done by Woodward and Bernstein is a good example of protection of sources in the area of investigative journalism. The piece which ended in the resignation of Nixon was based primarily on one secret source known as "Deep Throat".

Originally Posted by DrB0b

It's called investigative journalism, Jet. You may not have heard of it as you generally seem to confuse journalism with opinion pieces.

Jet is right about 'three verifiable sources'. I too have seen Clarke Kent being asked for just that many times.

Originally Posted by Jet Gorgon

The Guardian is a socialist rag that likes to spew.

And I' saying it is so,
And I' saying it is so,
And I' saying it is so,
And I' saying it is so,

Originally Posted by Jet Gorgon

The Guardian is a socialist rag.

And I' saying it is so,
And I' saying it is so,
And I' saying it is so,
And I' saying it is so,
And I' saying it is so,
And I' saying it is so,

Originally Posted by Jet Gorgon

Journalistic rules demand three verified sources. I'm part of that biz, I know.

Please provide three verifiable sources for your claim . . . both the requirement for sources and you being in the biz . . . the financial biz . . . and not knowing that the Canadian $2 bill is legal tender.

Seriously, though, Jet . . . please provide something concrete about this, I'd be interested as how many stories can be corroborated by three sources?

Originally Posted by AntRobertson

Originally Posted by attaboy

Originally Posted by sabang

Capitalism at it's finest.

No, it's years of teaching moral relativism in the universities that when applied gets translated to: there is no right or wrong, make it up as you go. It's the fluidity of liberalism that isn't bound by ethics and morals. I was very upset to hear that Glass-Steagall had been repealed. When I learned that the uptick rule on shorting stocks has been removed, I thought what are people thinking, is this some sort of attempt to curb the "irrational exuberance" of the late 90s? It was liberalism "change as a constant from preexisting conditions and domestic mores". 'It would be different this time around.'

Now I've heard it all! It's all the fault of the commie-pinko-liberals. Is there nothing that can't be blamed on them?

Poor Ant, so Hell bent on tearing down capitalism. He's got his miner goggles on and can't see beyond his hand pick. You refuse to admit leftists share blame for this don't you? Ant: another termite chewing away at the foundations of our institutions.

Originally Posted by attaboy

Poor Ant, so Hell bent on tearing down capitalism...Ant: another termite chewing away at the foundations of our institutions.

WTF!? Put down the bong, loon.

He's got his miner goggles on and can't see beyond his hand pick. You refuse to admit leftists share blame for this don't you?

Do I really? Or is that the classic strawman? What you need to tell yourself to make your attempt to lay the blame for...oh just about everything at the feet of some etheral 'anti-establishment lefties'. To make it seem balanced, considered, and not in the least bit blinkered and biased.

Your next windmill awaits to be slayed Don Quixote, tilt away!

You're all over the place, Ant. Take your Ritalin. It will help you to focus.

This from the guy that's just accused me of being some radical trying to 'bring down the system'? Your words, or lack thereof, speak volumes...

Originally Posted by attaboy

You're all over the place, Ant. Take your Ritalin. It will help you to focus.

Translation: 'I can't address any actual points or back-up any assertions so I'll make this about you instead, launch a series of increasingly juvenile ad hominem attacks and hope no one notices'.

Originally Posted by Jet Gorgon

...Should have been at least three verified sources in that article. All I found was "one source said." Journalistic rules demand three verified sources. I'm part of that biz, I know.

If that's the case then why have you repeatedly been unable to distinguish between a staff article in the NZ Herald and an AP or other newswire article in the NZ Herald?

Originally Posted by AntRobertson

Originally Posted by Jet Gorgon

...Should have been at least three verified sources in that article. All I found was "one source said." Journalistic rules demand three verified sources. I'm part of that biz, I know.

If that's the case then why have you repeatedly been unable to distinguish between a staff article in the NZ Herald and an AP or other newswire article in the NZ Herald?

a) She is herself a journo, as she has mentioned frequently, and hasn't a clue

b) She is not a journo and hasn't a clue

c) She has no clue

d) She is 'part of the biz' and hasn't a clue

Take your pick.