Contact Congress: Bailout Boosts Wall Street Bonuses

Contact Congress: Bailout Boosts Wall Street Bonuses

www.bloomberg.com

The worst financial crisis since the Great Depression, a $700 billion taxpayer bailout, public outcry over excessive pay and the demise of three of the biggest securities firms won't deter Wall Street from offering year-end rewards to employees on top of their salaries, compensation experts say.

Broken Securities Industry Still Has $20 Billion to Pay Bonuses...

Five straight quarters of losses and a 70 percent slide in its stock this year haven't stopped Merrill Lynch from allocating...

(visit the link for the full news article)


Related News Links:
www.time.com

The related Time link reports that the average managing director at an investment bank, a title typically earned around eight years on the job, will receive a bonus of $625,000. Even a bond trader just out of business school could see his or her bank account enriched by as much as $170,000 this Christmas.

These people are really out of touch with reality.

I urge US-based ATS'ers to contact their Congressmen and Senators over this issue. I don't know if they can legally stop the bonuses but serious questions certainly have to be raised:
1) Are these firms violating their fiduciary responsibilities to their shareholders and now, to the American taxpayer? At a time when capital is so desparately needed and so hard to come by, how can they justify handing out $20Billion plus to employees. Shouldn't these firms be shoring up their balance sheets; preparing for the explosion of the next highly leveraged financial instrument; retaining earnings for their shareholders?
2) Aren't bonuses supposed to be paid for good performance? How can anyone rate the performance of these firms as good? They have literally brought about the collapse of the global financial system. What reasonable person would expect a bonus after that?

I hope you will take the trouble to express your opinions to Congress over this issue.

www.bloomberg.com
(visit the link for the full news article)

Talk about people with a sense of entitlement! Get the torches and pitch forks ready fellow villagers! It is not wonder we are in such a mess.

ya, the redistribution of wealth is fine and dandy, as long as it flows up!!!
but, talk about it flowing down, to the middle and lower class workers and oh, no!!! that's socialism!!!

hope they don't expect my help paying for all this crap, because....
they are not getting it!!!

It occurred to me that a good way to deal with this is a special 'windfall profit' tax on the financial industry.

If they are going to take the $700B TARP funds and use them to pay out massive bonuses then why don't we tax them in April at a 90% rate. Call it the TARP Rescue Recovery Tax.

In one of the Congressional hearings, there was a guy at AIG (a company that has now taken about $100B from the Govt), who had been there only a short time and was getting a massive payout, something like $60Million. When Congress asked if he would give it up, he basically said, "No way!" It would be sweet to simply take it back in April.

As much as I dislike taxes, that's something Congress could do, and in this case, it would be just: If you drive the world financial system into the ground, you shouldn't get to profit from it.

it appears bailouts are being used to ensure who will win and who will lose at the game also.....

in plain simple words....
we've been grossly lied to people!!!

another practical application of the "redistribution of wealth"...

My, this is a good early morning read....
a journalist gained access to a employee conference call from one of the bailed out banks...

"Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?”

It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question. It came toward the end of an employee-only conference call that had been largely devoted to meshing certain divisions of JPMorgan with its new acquisition, Washington Mutual.

Which, of course, it also got thanks to the federal government. Christmas came early at JPMorgan Chase.

The JPMorgan executive who was moderating the employee conference call didn’t hesitate to answer a question that was pretty politically sensitive given the events of the previous few weeks.

Given the way, that is, that Treasury Secretary Henry M. Paulson Jr. had decided to use the first installment of the $700 billion bailout money to recapitalize banks instead of buying up their toxic securities, which he had then sold to Congress and the American people as the best and fastest way to get the banks to start making loans again, and help prevent this recession from getting much, much worse.

In point of fact, the dirty little secret of the banking industry is that it has no intention of using the money to make new loans. But this executive was the first insider who’s been indiscreet enough to say it within earshot of a journalist.

(He didn’t mean to, of course, but I obtained the call-in number and listened to a recording.)

“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”

Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: at another point in the conference call, the same executive (who I’m not naming because he didn’t know I would be listening in) explained that “loan dollars are down significantly.” He added, “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.” In other words JPMorgan has no intention of turning on the lending spigot.

www.nytimes.com...

so, let's pick out the winners and the losers, and let's give the taxmoney to those selected to be the winners so the losers can die much faster!!

" tighten credit to fully reflect the high cost of pricing on the loan side."

what high cost of pricing on the loan side is he talking about? seems rather easy to me, loan out the money, if the people pay you at the insane interest rates that you put into the terms, hey, you make alot of money! if they don't pay, well, you go to the government, and you make alot of money!!!

it's a win win situation, and these fools are so greedy, it's still isn't good enough for them!!!