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

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

#151

Post by tptacek »

rayiner wrote: post #114
collyw wrote: post #87

Earlier quoted context omitted.

Are banking jobs given out based on meritocratic ideals, or who your dad knows?

Most people are there because they got excellent grades at excellent colleges. These criteria objectively select for people who are sharp, though not necessarily geniuses, and have a demonstrated track record of working very hard and paying a lot of attention to detail and deadlines. In many ways, banking hiring is more "meritocratic" than tech hiring. There is less emphasis on "fit" and "culture" and because new hir…

It's funny that this got downvoted grey: my sense is that it really gets under nerd skin that tech isn't a great example of a meritocracy.

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

#152

Post by marcusgarvey »

toyg wrote: post #109
jbooth wrote: post #98

Earlier quoted context omitted.

If the risk was so low, why couldn't a private entity bail out the banks? Would have been a gangbusters investment, right? 8.6% is a good return for that risk?

How many entities do you know with almost 700bn in the bank ? The point of the bailout was to throw all the might of the State behind the sector, in a "ye shall not pass" stance that basically stated that either we cut these banks some slack or our current civilization would burn in flames. It worked, because people got the message and business eventually went back to normal. We can disagree on whether it was "good e…

>How many entities do you know with almost 700bn in the bank?

None but no single institution needed that much. Private investors, especially when working together, could have certainly stumped up funds for individual institutions. In fact, in the case of AIG such an overture by Chinese investors was rejected: http://www.nakedcapitalism.com/2014/10/aig-bailout-trial-bom...

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

#154

Post by jim_greco »

Banks are a collection of loosely related business that are only tied together by their participation in the capital markets. The equities derivatives desk has little to do with the mortgage desk which has little to do with the health care investment banking group.

As such, front office Wall Street bonuses are primarily based on personal and desk performance. In 2008 a handful of desks 'blew up' which took down the entire firm. Meanwhile equity and govie desks had a banner year. Does every desk deserve to get shafted? Do the back-office developers deserve to get shafted? I'm not here to defend the banks, but I can understand both sides of the argument. The Government should have just nationalized the banks if they wanted to control this.

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

#155

Post by ScottBurson »

lucozade wrote: post #75
randomsearch wrote: post #46

Earlier quoted context omitted.

> Your bonus is a direct function of what you make Isn't the point of the article that this is demonstrably untrue?

Not quite. The article is pointing out that the overall level of bonus is not well correlated with the revenue (or profit) of the companies as a whole. The poster is pointing out that that's largely because an individual's bonus, particularly in areas like IB (where most of the bonus pool ends up), is much more of a function of the revenue the individual brings in. Part of the reason for the discrepancy at the time o…

It would make some sense, perhaps, if employees with no responsibility for the catastrophic losses still received some bonuses -- though the company's ability to pay the full bonus ought to be factored in.

What doesn't make sense is that anyone involved with the losses or in the management chain of anyone who was should still get any bonus at all. That, obviously, includes the CEO. If the CEOs of these companies still received large bonuses -- and my impression is that they did -- that is fucked up.

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

#156

Post by dang »

collyw wrote: post #78
JetSetWilly wrote: post #14

Earlier quoted context omitted.

The UK government nationalised RBS and thus far RBS does not seem to be particularly badly run or more bureaucratic when compared to other banks, so I'm not sure there's any real evidence for this statement. In fact the UK government is expected to make a tidy profit when it privatises RBS again.

Ahhhh, cute, you believe what the government tell you.

> Ahhhh, cute, you believe what the government tell you.

Personal attacks are not allowed on Hacker News.

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

#157

Post by danielweber »

maxxxxx wrote: post #139
danielweber wrote: post #89

Earlier quoted context omitted.

The risk was incredibly low. The banks were rather profitable, but they had cash flow issues from deleveraging. And credit vanished in 2008. For the government's balance sheet, getting paid back 8.6% is a lot more reliable than your gut instinct of infrastructure or education or (especially!) health care.

If the risk was that low you would have thought that a lot of rich guys would have stood in line to buy up the banks' assets.

Credit crunch. No one was loaning any money to anybody.

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

#158

Post by tormeh »

danielweber wrote: post #149
atmosx wrote: post #137

Earlier quoted context omitted.

> or our current civilization would burn in flames. Wait a minute, just a minute. The way I see it, the US government didn't disarm a nuclear bomb, it just saved Goldman Sachs (and it's creditors AIG) and let Lehman Brothers die. Smart choice by Henry Paulson, I'd expect no less by a former senior GS manager. It used tax-payer money and I'd be angry if I were an American. I'm angry at the Greek government who did the…

At the time, I supported letting Lehman die. Take your medicine, screw-ups! I was wrong. It's largely regarded as a bone-headed move today. It was the start of the meltdown.

The losses would have to be written off somehow, maybe it could have been done more slowly, but I wouldn't think too much about the trigger for the crisis.

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

#159

Post by themartorana »

arthurcolle wrote: post #112
foobarian wrote: post #70

Earlier quoted context omitted.

That doesn't follow. All the oligarchs have to do is carefully pick the referendum topics to achieve their agenda. You sure didn't see any referendum on whether to bail out the banks.

I'm sure the average citizen has enough working knowledge of monetary policy to make an informed decision about bank recapitalization. Please.

They then also have a working knowledge of the psychological, human, and monetary costs of a never-ending war against our own citizens, the inability to distinguish between crime and addiction and disease, the extremely regressive nature of drug addiction, recidivism rates of minor criminals in to hardened felons, the stifling effect of a felony conviction on upward mobility, and everything else proven to be utterly destructive about the war on drugs.

The majority is rarely well educated about anything. Pretending their support on the war on drugs is somehow more informed than on bank bailouts is silly.

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

#160

Post by themartorana »

rayiner wrote: post #64
themartorana wrote: post #50

Earlier quoted context omitted.

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 cl…

You're trying to tie-together two narratives that make no sense in conjunction. Do we have the drug war because of tyranny of the majority, or Citizens United money overriding the will of the majority? I'd posit the evidence shows that the majority strongly supported making drugs illegal and meting out harsh sentences, at least at the time the laws were put into place. If that's the case, the whole "oligarchy" narrat…

The majority is often in support all sorts of policies that are against their best interests.

That has nothing to do with what agenda is moved forward by the oligarchy.

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