Obama: big Wall Street bonuses 'outrageous'

Obama: big Wall Street bonuses 'outrageous'

www.msnbc.msn.com

updated 47 minutes ago

President Barack Obama believes the multi-billion dollar bonuses that Wall Street banks awarded themselves for 2008 are "outrageous", White House spokesman Robert Gibbs said on Thursday.

The New York comptroller reported this week that Wall Street firms paid out $18.4 billion in bonuses to employees, despite receiving multi-billion dollar payouts from the government to save them from collapse in the face of the worst financial crisis in decades.
"We're not going to be able to do what is needed to be done to stabilize our financial situation if the American people read about this type of outrageous behavior," he said.

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Well, well... the President is pissed!

$18.4 million...but they were broke...right?? Needed bail out money...right?? Yeah..right!!

I just goes to show you that this was planned(the need to be bailed out) for a long time.

So, how is that bailout money working...It's working just fine, for the people who are behind it! The ruling class has just made enough to last them forever, and enough to keep us poor and in the dark for 10's of years to come!

There is something that caught me as funny in this article. It's the paragraph that starts with Mr. Obama saying "Were not going to be able......"
Does the wording of that strike anyone esle as a bit funny??

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

Originally posted by wolf241e
There is something that caught me as funny in this article. It's the paragraph that starts with Mr. Obama saying "Were not going to be able......"
Does the wording of that strike anyone esle as a bit funny??

No, it doesn't sound funny to me. Seems like he's saying 'we' as in the country.

One thing though, and perhaps you have misquoted or quoted from another article, but that quote that you find 'funny' isn't in the article that you link.

The thing is... those bonuses... were most likely honoring contracts,

the people/brokers, etc are like independent contractors, and they are not
on a fixed salary... so the business & company fees they were able to
generate through their own personal contacts & strategies & networks
needed to be paid-for...hence the term 'bonuses' for performance...

those 'Bonuses' could also be termed as 'Deferred Compensation'
in a legal sense...
Because -> If the monies were not paid out...then there would be a 100,000 lawsuits pending, regarding breach of 'Contracts'...



Payments are not always Bonuses,
Obama needs to get a better staff of advisers surrounding him

Originally posted by wolf241e
...

There is something that caught me as funny in this article. It's the paragraph that starts with Mr. Obama saying "Were not going to be able......"
Does the wording of that strike anyone else as a bit funny??

Actually that wording caught my eye as well.

One could simply suppose that he was using the 'we' in the royal sense (as in the state), but the phrase does not 'feel' like that to me. Strictly subjective, it's like there was another 'plan' in place that requires the docile acquiescence of the American people to function. I guess maybe we are going to be lined up for a bit of 'shock and awe' - although I hope not.

Originally posted by converge

Originally posted by wolf241e
There is something that caught me as funny in this article. It's the paragraph that starts with Mr. Obama saying "Were not going to be able......"
Does the wording of that strike anyone esle as a bit funny??

No, it doesn't sound funny to me. Seems like he's saying 'we' as in the country.

One thing though, and perhaps you have misquoted or quoted from another article, but that quote that you find 'funny' isn't in the article that you link.

Hey there, good catch.

Yeah, they updated the article a few min ago and must have done some re-wording on it. The title now says the he calls the bonuses...shameful.
The paragraph that I saw is included in the OP.

Seeya!

[edit on 29-1-2009 by wolf241e]

Originally posted by St Udio

Payments are not always Bonuses,
Obama needs to get a better staff of advisers surrounding him

He has the right people for the right job.
remember that information let out to the public is released for a reason.

I'm not going to defend them for doing this but some insight into the system might help here.

Brokerage houses plan all year for the bonuses so that, when the time comes, they have the money to pay out. Thus, this money was building up for a long time. Does this mean they couldn't give less and use the money for other things? I don't know. I don't know how they do this, I only know that the money is segregated over the year.

The system is a strange one. Take, for example, Joey. Joey works for Goldman and he is one year from becoming a partner. His annual salary is $130,000. That's right. $130,000. His bonus in 2007 might have been $800,000. His salary is capped. He lives off of $130,0000, paid out monthly or every other week. In NYC that's not a whole lot. After taxes, $130,000 is $60,500 and that is not including deductions for 401(k), medical etc.

So, Joey brings home about $5,050 a month. That's it. Now, Joey is married, has a kid, maybe two. He gets his bonus in January or February, big time money, and he uses it to buy himself a house, a car etc. The rest he needs to get himself thru to the next year because, let's face it, $5000 a month isn't a whole lot when you have a wife and two kids and school and camp and whatnot to pay for.

Now, Joey, knowing he will get his bonus every year in January or February, spends his money as if he makes $800,000 but he must ration it, stash it away etc to ensure that the money lasts until the next bonus. So, come December/January, he's running low on funds, he's got the same bills, the same living expenses and now, suddenly, the boss says "no bonuses this year."

They simply cannot do that. It is impossible.

They need to slowly increase the base and decrease the bonus until they reach a point that is not deemed ridiculous, doesn't bankrupt the employee and doesn't offend the public.

I know it seems odd but, imagine, if you will, working all year for one amount, with the promise of a big payday, only to be told, no, sorry, the public isn't happy with the system so you get nothing.

Sadly, the financial institutions did the only thing they knew that would allow them to pay the bonuses as expected, they laid off enough employees during the year to ensure that they could still pay out the bonuses to those folks who they kept.


Again, this is how it works. I'm not saying it's fair, just saying you can't pull the rug out from everyone. The layoffs sucked, more so since one of the reasons for the layoffs was to ensure the bonuses could still be paid.

One last thing, that I'm finding somewhat odd and I haven't had a chance to look deeper into it is that there are reports here in NYC regarding the bonuses being the 6th highest ever and then there are reports of the bonuses being down, causing a huge decrease in tax revenues here.

Either they're up or they're down.

Didn't one of the banks recently buy themselves a new plane with the bailout money?
I don't really have anything else to add, but there is a fine line between unnecessary and necessary bonuses.

A contract is a contract. If a company truly feels that one individual is worth that much then why should Obama butt in. It is the shareholders that should rise up and demand what their CEO's should be paid. Do you really think obama would turn down a bonus if he was a CEO? Would you?

reply to post by jam321


I'm not sure about who got the bonuses but, from what I've been seeing, the top dogs were not taking bonuses, passing that money along to their employees.

with regards to the plane, that was citibank and they were, apparently, notified by the white house that the plane was not going to happen.

reply to post by Crakeur


I accept your explanation, but I wonder if there isn't a flaw in the mentality of Joey. At what point in time is it ever not reckless to bank on money that is not in your possession?

I mean sure, I may get an $800K bonus, but I sure as hell am not going to spend it before its in my pocket. And I know that to elevate my expenses based on a yearly lump sum bonus can't be regarded as 'a safe bet'. I don't adjust my spending simply because I know I will get a cost of living increase..., why, because I don't spend what I don't have. In fact, isn't this the very mentality that got us where we are today (considering the derivative market debacle)?

Now I don't fault Joey for behaving as his social and professional peers do, this is common in many industries. But the logic fails to serve adequately in this scenario where the upper echelons have apparently served themselves up a great thanksgiving feast without portioning off anything to pay their bills. And their multimillion dollar a year financial geniuses who are of such a high caliber that they 'call for' such compensation, surely did not live up to the stellar performance one should get for the pay they receive. Were they not warned (for that matter wasn't congress?)

I accept that contractual obligations must be justly met, but who decides who's claim takes priority? Who's trust was violated? And why should the system encourage the victimization of the local and national economy so these super geniuses of finance can get 'paid' their due (which some might argue is zero in this circumstance)?

The fact of the matter is, the same folks deciding what is right and wrong in dealing with this pseudo-ponzi scheme are the executors of the scheme itself. Politics has protected them, and we see that no branch of our government has been willing to remove that protection. Why?

I am sure Wall Street is also feeling outrageous. In 2007, the year end bonus of Goldman Sachs alone is $20 billion.

Originally posted by jam321
A contract is a contract. If a company truly feels that one individual is worth that much then why should Obama butt in. It is the shareholders that should rise up and demand what their CEO's should be paid. Do you really think obama would turn down a bonus if he was a CEO? Would you?

But if you are only doing half a job, should you be entitled to a full bonus?
These people made the wrond descisions and are still getting their bonus.
If you flip burgers wrong to many times you get dumped and replaced, why are the big CEO's not getting dumped and replaced for poor choices?.

remember that this isn't shareholder money bailing out the companies, its public money.


[edit on 29-1-2009 by munkey66]

reply to post by Crakeur

citibank and they were, apparently, notified by the white house that the plane was not going to happen.

I was going to ask you this question

Do you think Citibank backed off because of the White house or because its current and future potential customers got ticked off about the move?

but never mind, looks like Citibank is getting a new plane.

The bank signed a contract several years ago to buy a Dassault Falcon 7X and plans to accept delivery later this year, according to a person familiar with the matter.

Citigroup said in a statement that refusing delivery now would result in millions of dollars of penalties. The bank also said it is selling existing aircraft, the proceeds of which will more than pay for the new plane.

The New York Post, which was first to report the bank was still buying the new plane, said earlier on Monday that Citigroup was selling two jets estimated to be worth $27 million each.

www.straitstimes.com...

Originally posted by Crakeur
So, come December/January, he's running low on funds, he's got the same bills, the same living expenses and now, suddenly, the boss says "no bonuses this year."

They simply cannot do that. It is impossible.

Hey there Crakeur.

I have to disagree with your assessment on Joey. No one should live in the mere thought that they "might" get a bonus. I've worked in bonus based places in the past and have heard this same story. People who are near panic because the mortgage was to be paid with that "assumed" bonus. These are the same people who never seem to get ahead in the system.

Joey is clearing living beyond his means. He also seems to have a discipline problem in unnecessary spending practices.

People like Joey are the one's that are strung out on there credit cards and take all of the equity out of their homes to "keep up with the Jones's".

Taking NYC as an expensive place to live...sure I get it..but the responsible thing for Joey should do for himself and the family is move to Jersey and face a longer commute in the morning. No one says you have to live in Manhattan.

reply to post by wolf241e


What is incredible, hipocritical and outrageous is Barrack complaining about the excesses of businesses when he and Pelosi just wrote and passed themselves the a record governmental spending bill (in the name of economic recovery LOL), pork barrel spending larger than anything in history! Record pork barrel spending in the hundreds of billions and Barrack thinks he is qualified to complain about the private sector??

reply to post by Maxmars


I won't disagree with you on the concept of banking on something you don't have but this has been the norm in the finance industry for a long time. It's part of the ego driven aspect of the industry. Announcing the bonuses is a means of showing up the other firms with a "we did better than you" press release. In an industry where base salaries are low, it helps to announce big bonuses if you want to lure away the top performers.

Again, I don't agree with the system but you simply cannot take the bonuses away from the employees without giving them ample notice.

the funny thing is, for folks in the investment industry, many of them will not be able to survive without their bonus. No savings.

Scary aspect - many of them think the issue of bonuses is a one year thing. I've heard from quite a few people at places like Merrill and Morgan Stanley and they all say that the majority of the people think they need to weather this short storm and, next year, back to normal.

They are playing ostrich if they aren't planning for some changes to the entire system which they live and play in.

reply to post by munkey66


Actually it is shareholders money as well because people like you and me have money invested through pensions, 401k's, etc.

But if you are only doing half a job, should you be entitled to a full bonus?
These people made the wrond descisions and are still getting their bonus.

In reality they shouldn't. However, contracts should be structured in a way that reflects how the business is doing. If the business is doing bad, then little or no bonus. If doing good then there should be a nice bonus. Unfortunately, many contracts in place are guaranteed instead of conditional.

But I have a problem with bonuses period. It leads to accounting fraud. I honestly believe a lot of our problems are due to accounting. Everything is overstated or understated depending on what results you want. Just look at the government. Everything the government does is projected and estimated. There is never a real value attached. Nobody really wants to admit that we have an accounting problem.

How much money was spent on Obamas lead up to the election?

wasn't it the most spent on any candidate in history?