Comments on: Wall Street Uses the “S” Word to Denounce Criticizing its Bonuses — Socialism!

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By: Uncle B

Uncle B — Wed, 04 Mar 2009 22:28:50 +0000

The folks at the bottom of the pyramid have gotten very tired. They have laid down their tools, given up the noble “Family” notion, tossed morals to the wind, no longer seek “steady employment', couldn't give a damn about churches , have found pot, booze, and cocaine. Can't afford health care and have let it slide, Won't ever try to “own” a home, they know it is just a con, Look on jails for food and shelter when the streets get cold or rough, Live in cars, vans, cardboard boxes, hidden corners in cities, anywhere cheap, and every day the “disenfranchised”, join the “disenchanted”, hardening themselves for death or revolution, no matter, the consequence is the same. America, the base of your pyramid is crumbling fast!

By: Uncle B

Uncle B — Wed, 04 Mar 2009 14:28:50 +0000

By: Porkchopicus_of_Borg

Porkchopicus_of_Borg — Tue, 03 Feb 2009 10:37:19 +0000

“we all need to be cognizant of is the fact that many of those responsible for the shoddy decisions are gone”

Objection. Assuming facts not in evidence.

By: Derrick

Derrick — Tue, 03 Feb 2009 00:13:01 +0000

Actually I may have messed up – it SEEMS like these are bonuses paid for performance in 2008, although I annot figure out how they would get that information so quickly.

By: Derrick

Derrick — Mon, 02 Feb 2009 23:52:35 +0000

Small guy – you might be right! At least in part. After reading your post, I went back and looked at the press release from the New York State Comptrollers Office, and I think you are correct that the bonuses were paid in 2008 – which SHOULD mean that a certain portion was for 2007. I doubt it is all, as some firms do pay before Christmas and perhaps the office was looking at tax documents that included provisions for bonsues (I have no idea if this is true). In any event, a 44% decline seems pretty rough if you also consider that one out of ten people on Wall Street lost their job (much worse than the overall labor pool – but fair enough given that it was the epicenter of the crisis) and that you could make a case that a lot of people contributed to the profitability of their companies and actually earned a bonus. To put it in non-Wall Street terms: If my job is to sell shovels and I beat my sales targets, but some guy who sells rakes loses a LOT of money, should I get paid ot not? It would also help explain why I dont know a soul on Wall Street (I know a lot of folks in the industry) who made anything more than a token bonus, of they were even employed. This is an interesting issue – thanks for bringing it up. BTW here is n excerp from the release and a link to the site:
“DiNapoli’s office estimates that the bonus pool paid by the securities industry to its employees in New York City totaled $18.4 billion in 2008 based on personal income tax collections and other factors, including industry revenue and expense trends. This represents a decline of 44 percent compared with the $32.9 billion paid in 2007. The decline is the largest on record in absolute dollars and the largest percentage decline in more than 30 years, but the size of the bonus pool is still the sixth largest on record. “
http://www.osc.state.ny.us/press/releases/jan09...

By: Derrick

Derrick — Mon, 02 Feb 2009 23:28:24 +0000

I think you have a fair point. Lack of regulation probably led to this crisis. We risk making equally bad mistakes if the pendulum swings too far the other way. This is a complicated issue and should be treated as such.

By: Derrick

Derrick — Mon, 02 Feb 2009 23:24:21 +0000

I have no interest in defending Wall Street bonuses – now when Merrill can so easily be used as a counter example. However, here is one way to look at it the issue and the “S” word. Suppose you had to take a substantial portion of your net worth and invest it in one of two groups of companies: the first is all the banks that have received TARP. They screwed up, were run by total idiots, etc, etc, etc, and now the government is the de-facto majority shareholder. For the sake of argumet, pretent that their balance sheets are now in relatively good shape thanks to the TARP funds (OK, a stretch, but work with me for the sake of the example). Now take a group of banks who did not take TARP funds, whatever shape their balance sheets are in. If you had to invest in one group over the other for ten years, which would you chose? Without even looking at the balance sheets, I suggest group B. This is not because they are clearly the smarter managers. It is because the TARP banks will be managed via headline and political opinion, not by economic fundamentals. I am in no way excusing the prior bahavior of these banks when I suggest that the more the government has a hand in running these banks, the worse of we all will be. First they will go after bonuses, which I would say is 50% justified and 50% “lets screw the rich.” No problem, the rich deserve said screwing these days. Then they will go after marketing budgets, like BofA's activities at the Super Bowl. Call that 20% justified, 80% “We hate to see bankers have any fun at all.” The next step, and this is not some right-wing consiracy theory, will be to force banks to lend to people. From there, it wil be to force banks to lend to certain groups for political purposes. These are not likely to be the best credit risks, but that will not be the governments concern. Meanwhile, when (if?) the economy picks up, the poor bastards who have been working sans-bonus (and doing just enough to avoid getting fired – why should they do more?) will move over to the non-TARP banks, which will steal market share, make loans to credit worthy customers, and actually think about generating a return on equity. The problem is not that the bankers deserve zero bonuses (I WILL add that I know a lot of banker/finance types, and there was precious little money going around, so I dont know where the heck this bonus number that is so controversial comes from). My point is that the line between rightous anger and banking-by-political-whim is a thin one. I would put all my money on the non-TARP banks, and short the TARP banks, if that is still legal.

By: Lincolnparadox

Lincolnparadox — Mon, 02 Feb 2009 20:30:03 +0000

Technically, the government bailing out the banks in the first place is socialism, too. I don't know why the federal government didn't just give citizens the money to pay off their mortgages and consumer debt. The banks, which own the mortgages and credit card companies, would get their money to remain liquid, and most Americans would be more out of debt. It's a win-win scenario.

The way that it has been done, the banks are either hoarding the money, or using it to buyout other banks (or give their top brass bonuses). It isn't freeing up credit, or maintaining the liquidity of the banks.

By: Porkchopicus_of_Borg

Porkchopicus_of_Borg — Mon, 02 Feb 2009 19:49:13 +0000

Let's hear you call Boris Karloff an asshole.