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Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

bloomberg.com

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Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#41

Post by rayiner »

themartorana wrote: post #7
sjcsjc wrote: post #2

OP here. Given the current story re HSBC's misbehaviour, I thought it worth reminding everyone of the scale of the theft that took place during the bank bailout.

This, HSBC lending money to rouge nations and drug cartels, the LIBOR scandal, and not a single person is in jail. Not to mention that the Fed made available and lent up to $7T to banks (without telling Congress) right before TARP was rushed through. Smoke some weed, go to jail. Do it three times, go to jail for life in CA. MANDATORY. Especially if you're black. If these and other ongoing similar "crimes" don't convi…

California's three-strikes law was supported by a 72-28 vote in a public referendum. At the time of the vote, nation-wide, the public supported keeping marijuana illegal by an over 70-30 margin: http://www.people-press.org/2013/04/04/majority-now-supports....

Our drug and sentencing laws are the result of democracy, not oligarchy.

Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#43

Post by jasonwocky »

mattgibson wrote: post #17
jheriko wrote: post #6

Earlier quoted context omitted.

> Either you let the company go bankrupt or you nationalize. I vaguely agree with that sentiment, but the problem in practice is that government sucks at running things. They introduce layers of infrastructure that business doesn't and turn things into political footballs. Although thinking about that for a moment, its a big problem on its own...

> the problem in practice is that government sucks at running things. They introduce layers of infrastructure that business doesn't Actually, there is no evidence of this. See this report that compares the Govt run industries before and after privatisation: http://www.psiru.org/reports/public-and-private-sector-effic... "The results are remarkably consistent across all sectors and all forms of privatisation and outso…

> "The results are remarkably consistent across all sectors and all forms of privatisation and outsourcing: there is no empirical evidence that the private sector is intrinsically more efficient"

Exactly this. I've spent years in both sectors. People suck at running things, not governments.

Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#44

Post by quaffapint »

tormeh wrote: post #4

>“When the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well,” Cuomo’s office said in the 22-page report. “When the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well. Bonuses and overall compensation did not vary significantly as profits diminished.” Waaat. I think the government should stop bailing out businesses.…

I work in banking as just another cog. We suffered wage stagnation and no bonuses. The executives on the other hand still got at least a 10% bonus each year, because they had contracts. So, please keep that in mind when it says 'employees'.

Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#45

Post by dougk16 »

matthewmacleod wrote: post #15
jheriko wrote: post #6

Earlier quoted context omitted.

> Either you let the company go bankrupt or you nationalize. I vaguely agree with that sentiment, but the problem in practice is that government sucks at running things. They introduce layers of infrastructure that business doesn't and turn things into political footballs. Although thinking about that for a moment, its a big problem on its own...

They introduce layers of infrastructure that business doesn't and turn things into political footballs. Have you ever had any interaction with any large business? They are bureaucratically indistinguishable from governments.

Actually they are distinguishable - many of my interactions with banks and insurance companies make the government look like a well-oiled machine.

Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#46

Post by randomsearch »

javiramos wrote: post #30
MichaelApproved wrote: post #26

Earlier quoted context omitted.

Also, the payment of "bonuses" in the banking industry are essentially an extension of salary. It's not what you'd typically think of as a bonus for hard work during the year. Bonuses are often pre-negotiated and pre-determined, just like a salary is.

Are you referring to investment banking/trading/PE or what? This is definitely not true in IB or trading. Your bonus is a direct function of what you make. This is particularly true for even more senior partners in IB/trading firms. The rainmakers make significantly more money than 'operating' or 'non-money-making' partners.

> Your bonus is a direct function of what you make

Isn't the point of the article that this is demonstrably untrue?

Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#47

Post by growse »

aidos wrote: post #39
pdpi wrote: post #35

Earlier quoted context omitted.

Notice that you're effectively saying "the bailed out banks should renege on contracts". If nothing else, there's enough money on the table that the affected people are likely to litigate, and there's a fair chance you'll just end up paying the bonuses just the same, but now topped off with the expenses of a lawsuit.

Are the bonuses often contractual and not discretionary? If so, they're not really bonuses.

Contractual doesn't mean guaranteed. You could have a bonus that's contractually tied to a certain set of conditions being met (e.g. personal objectives). If the employee meets those objectives and the company doesn't pay out, they could be in breach, regardless of their financial situation.

Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#48

Post by tgb »

pdpi wrote: post #35
javiramos wrote: post #25

Earlier quoted context omitted.

Yeah, but when the bank needs loans to stay in business it shouldn't be paying out bonuses. Particularly so if the government (i.e. taxpayers/us) went through giant efforts and took a significant amount of risk to hand out these 'loans'. EDIT: I believe that the bailout was needed and it did (IMO) prevent significant negative ripples from flowing through our financial system. What I really despise is the lack of disc…

Notice that you're effectively saying "the bailed out banks should renege on contracts". If nothing else, there's enough money on the table that the affected people are likely to litigate, and there's a fair chance you'll just end up paying the bonuses just the same, but now topped off with the expenses of a lawsuit.

Isn't reneging on contracts a standard part of bankruptcy?

Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#49

Post by jevgeni »

javiramos wrote: post #25
tomp wrote: post #21

Earlier quoted context omitted.

I don't mean to detract from your point, but you have to keep in mind the fact that those were loans, and the government actually made money on those loans (AFAIK). Also, if the damage to the economy would be greater than the taxpayer loss of the bail-outs, they still make sense, as long as they are accompanied by legislation that makes hem less likely in the future (which, sadly, hasn't happened yet). > Also I clear…

Yeah, but when the bank needs loans to stay in business it shouldn't be paying out bonuses. Particularly so if the government (i.e. taxpayers/us) went through giant efforts and took a significant amount of risk to hand out these 'loans'. EDIT: I believe that the bailout was needed and it did (IMO) prevent significant negative ripples from flowing through our financial system. What I really despise is the lack of disc…

Not to burst anyone's bubble, but banks need loans to stay in business per definition. Especially in a Glass-Steagal world.

Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)

#50

Post by themartorana »

rayiner wrote: post #41
themartorana wrote: post #7

Earlier quoted context omitted.

This, HSBC lending money to rouge nations and drug cartels, the LIBOR scandal, and not a single person is in jail. Not to mention that the Fed made available and lent up to $7T to banks (without telling Congress) right before TARP was rushed through. Smoke some weed, go to jail. Do it three times, go to jail for life in CA. MANDATORY. Especially if you're black. If these and other ongoing similar "crimes" don't convi…

California's three-strikes law was supported by a 72-28 vote in a public referendum. At the time of the vote, nation-wide, the public supported keeping marijuana illegal by an over 70-30 margin: http://www.people-press.org/2013/04/04/majority-now-supports... . Our drug and sentencing laws are the result of democracy, not oligarchy.

But we don't live in a democracy, and expect better from the Republic bound by the Constitution, which is pretty clear about unjust punishment.

If a democracy and majority rule were the true rule of the land, we may still have segregation, slavery, illegal mixed-race marriages, and so on, and so on...

Now look at what class our electorate is largely made up of. Mix that with a little Citizens United and it becomes clear again that money controls government (and now rather blatantly) and it's not often that decisions are made that benefit the weakest among us - drug policy and the war on drugs being just one example.

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