naked capitalism

John Liberty says:

THIS IS AN OUTRAGE. WHAT CAN BE DONE ABOUT THIS. I WISH I HAD TIME TO PROTEST.

Anonymous says:

“THIS IS AN OUTRAGE. WHAT CAN BE DONE ABOUT THIS. I WISH I HAD TIME TO PROTEST.”

write to Senators Pelosi, Reid, and Waxman. They’ve been complaining about high bonuses at the banks; if they get pressure from voters, they might do more than just complain.

tom a taxpayer says:

Barney Frank, Reid, Pelosi, Paulson, Bush, whover is in charge of the bailout money, needs to teach these Goldman Sachs bitches a hard lesson: The government needs to take back all the money it has given to Goldman Sachs, and revoke Goldman Sachs charter as a bank or bank holding company. Let this be a lesson to all the banks that have gotten taxpayer bailout: Don’t mess with the taxpayers.

Independent Accountant says:

Where is Robespierre when you need him? I had read Jesse’s post and laughed as I was reading it. Talk about chutzpah.

Art says:

I think they realize that the party is already over, and they trying to get last bits of what they can get, before this whole thing goes down.

Anonymous says:

“Goldman’s Rule” -he who has the gold gets to make the rules.

Anonymous says:

pitchforks and torches? A few bullets would be a tad more effective. Really wouldn’t surprise me much at all to read about it. This is going to piss off alot of people. ALOT.

Anonymous says:

It is called fascism folks. Like it?

Anonymous says:

There are plenty of Laws Matt. I’ve noticed most of them are never enforced. In fact, once upon a time people attempted ‘do to what’s right’ , whatever that means.

It’s the culture of this country that’s corrupt. There is nothing to aspire to. Our most wealthy and powerful residents are sociopaths.

Abbott_Of_Iona says:

Anonymous said… @ November 2, 2008 10:00 PM

“It's the culture of this country that's corrupt”

If your culture is corrupt the you’re politic & law is corrupt.

You need law whether you like it or not.

Anonymous says:

So what’s the back story? These guys are so in debt that without the bonus they will be unable to keep up payments and go bankrupt?

Are we bailing them out directly and personally because they really need it more than others?

http://sinfest.net/comikaze/comics/2008-10-16.gif

Bankstas!
http://www.sinfest.net/archive_page.php?comicID=2952

Ryan Barnes says:

I don’t want to get eggs thrown on me for saying this, but the bonus package will be at least 50% lower than last year at Goldman, and the money would have been set aside anyway. It’s not correct to say that the bailout money itself is going to pay bonuses…they are all parts of a whole, and a key to Goldman’s ability to generate earnings growth in the future (and therefore be able to pay back the loan) is to retain their top talent, which is the best in the industry.

Just my 2 pennies…

http://epiphanyinvesting.com/2008/11/01/goldman-may-report-first-ever-loss-in-4th-qtr-gs/

Anonymous says:

The revolution will not be televised. In fact it won’t even happen. The average Joe (the plumber was just another fraud) will be tricked into thinking that the government is doing everything it can, with the cooperation of Wall Street no less. But the comment that the execs are hoarding all they can as they know the whole economy is goin’ down, is probably true. If the pitchforks ever do come out, it will give the gov’t and Wall Street the excuse they need to call out the troops to restore order. Wait and see.

Anonymous says:

Re: Ryan Barnes

If Goldman set a precedent and didnt pay bonuses, then its likely the others would follow and the loss of key staff to competitors would be less likely or unlikely. Now the pressure is on for all others to pay competitive bonuses.

That the bonuses are 50% less means nothing – look at what last years effort provided the firm!

Also, if the money was set aside for bonuses, then clearly a bailout was not required and it was erroneously provided.

Anonymous says:

Uhh, rats always flee a sinking ship first? (or so I’ve been told at least).

The USSA is sinking. The fact Sahra Palin is considered a serious contender for President says it all. A moron Beauty queen?

This is not a country anymore, it is a farce. This is what happens when you let grade inflated morons from 40K private schools run your life.

I say, kill the stock market. No more speculative pieces of fluff run by Ethan from Yale. There is no competition between these people. It is all just one big cocktail party!!

fresno dab says:

Fresno Dan used to write “Did Hank Paulson know how Goldman Sachs made money? ANY answer is disturbing”

Now Fresno Dan asks “Did Hank Paulson know Goldman Sachs would continue with bonuses??? ANY answer is disturbing”

This guy just keeps giving and giving – Like Cool Hand Luke, I just wanna say, “I wish you weren’t so good to me”

Anonymous says:

Wanted to post from a different angle to help readers understand why a bank might accrue a large bonus pool even when having a bad year. I'm in senior management in the back office at one of the top 5 universal banks, so I hope you find this credible / helpful.
Banks have got in the habit of hiring the very best people for all its functions. This is not just about 'bankers' but also support functions. Let's say we have 10 major back office operations or IT&infrastructure functions. Each one of these are HUGE businesses in and of themselves running budgets of potentially $1bn p.a. These all need the best customer relationship managers, the best COO's, the best CFO teams, the best sourcing experts and so forth. As banks have earned so much in past years (see: Cantillon Effects) they have been able to accumulate much of the world's best talent from productive industries such as manufacturing and IT. If you look at it from the perspective of bank management – let's say the bank believes its people are the best money can buy. The fact is that even when times are tough your stars probably have other opportunities. All the more so pertinent as many were poached from 'industry' due to high comp. A bonus is about 50% of comp even in the back office for senior staff. This means if you zero them out, there is a real risk they will go. If this goes away, then these folks will, in some proportion, go away back from whence they came. Most people don't like working for banks. Its really hard work (I'm talking from experience here) and senior people in operations for other industries can also make good money – certainly competitive with base salaries at banks. If banks think that (a) business will return in the relevant future; and/or (b) while they need to adjust comp down they cannot see mass exodus as this creates operational risks that are unacceptable then they will take legitimate decisions to maintain bonus pools at some level. I am not defending multi-million pound bonuses for the CDO sales leads but what I am saying is that there are likely some good people in some good departments that legitimately deserve to earn good money. And yes, there are some doing well, not to mention back office where the volumes are up. Even in bad times. I sincerely hope the thought process is working this way.
For the record I am not a supporter of the bailouts, I do not believe in fractional reserve lending, and I do not believe in fiat currency. It will be a good thing to see this industry shrink in size. That will help the economy grow again.

john bougearel says:

The bottom line is this: our bubble blowing lawmakers can not legislate where the bubbles they blow go toward. It can’t be forced to go towards real investment, and lending to stimulate the economy. As Richard Kline reminds us, “negative rates makes it unprofitable to lend money period! If the world goes ZIRP…a by-product of that is the suffocation of real investment.”

Hey Barney, please get over the loss of $850 billion of taxpayer money asap you just blew and start calculating the size of next installment you will expropriate from taxpayers to subsidize the losses of Wall Street.

We told you this Paulson Plan was a bad idea the way it was structured from the git-go. But did you listen. No, you said, “talk to the hand because the ears don’t want to hear.” Instead of modifying the plan thoughtfully, you went out and bought votes to pass the plan by sweetening the deal for lawmakers with another $150 billion pork paid for by even taxpayer dollars. Just a spoonful of sugar may help the medicine go down for lawmakers, but I promise you this, it became far more offensive and distasteful for the taxpayers you are supposed to represent.

While we all agree something must be done, this latest policy mistake is your fault Barney Frank, you and your fellow lawmakers, not ours. It would behoove you and your cohorts to listen up to the inputs of private market participants who have more than willingly offered their wisdom to establishing appropriate and outcomes that are desirable for everyone, not just cash-strapped banks.

The political regime on Capital Hill’s ability to thoughtfully respond to private market participants inputs will be critical towards minimizing the severity of collateral damage. As it stands now, your latest legislation actually prolongs the mess we are in and begins to create another messy bubble.

We might remind you the Paulson Plan was just three pages long, to which you legislators added 447 more pages of pork and proceeded to called it an emergency economic stabilization bill (EESA in its most polite form, TARP as it is commonly referred to )that will stop the bleeding.

The EESA/TARP bill was no more than a substantial piece of garbage, and costly garbage to taxpayers at that. Garbage in begets garbage out, Mr. Frank. When you go back to the drawing board, please give thoughtful consideration to how you structure the next bit of legislation that your constituents will be paying for, so we don’t end up with more messy garbage. We, your constituents simply cannot tolerate garbage any longer from your ilk.

Even the ABA executive director Ed Yingling is complaining to you that “this is not a program the banking industry sought.” Legislators like yourself Mr. Frank might think of taking a hint from Mr. Yingling, if not from us ~ your constituents, before you decide to go cramming down another $700 billion dollars down the banking industry’s throat.

Anonymous says:

anon @ 7:35 —

thank you for your informative post. i for one do agree that most of the back office staff DO deserve it.

however, even knowing this fact, many of us here believe that these talented, skillful people would better serve the economy by taking their skills & talents somewhere else more productive than helping to engage in a high-tech fleecing operation.

paying bonuses just continues the incentive to be complicent and delays the needed subterfuge of these operations.

without it, let's hope that folks like yourself will continue to silently spread the word in the back rooms that this whole endeavor is a farce.

good luck and goddess speed.

Anonymous says:

anon 8.11 -
Appreciate your kind words. I look forward to a career one day outside of banking, perhaps back in manufacturing or IT. In the meantime I continue at a bank because I do enjoy my job and would stay at least in the short term even without a bonus pool.
As we downsize hopefully I can give honest and fair exits to the staff with adequate warning. You are exactly right that the sooner people are repurposed out of banking and into other business the better. This is actually one of the most unjust aspects of the bailout that has not really been highlighted by many – the fact is we should actually be *facilitating* the exit of bank staff and not trying to continue the charade.

Anonymous says:

anon 8.41
I was trying to explain why a bank might think it makes sense to maintain bonus pools ‘at some level.’
Not sure where you got the ‘underpaid’ piece as I strongly implied (see: “Cantillon Effects” and “the industry should shrink” comments) that in fact staff working for banks have been *overpaid* in the past and that this should change.
What worries me in the overall tone of some posters regarding bank staff is that there’s a level of recrimination that is being arbitrarily applied that really does not make sense once one cools down and considers what is being said.
Not trying to be argumentative with you, because I absolutely understand your sentiments (and even share them as I’ve stated), but simply would like you to slow down and understand what I am trying to say, as I am only trying to be informative.

HUMBLE HEALER says:

They Like The Night Life, Baybeh

Anonymous says:

This was reported 2 weeks ago in the UK Guardian.

http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking

MSM failed to pick it up, for some reason.

Anonymous says:

I agree there should be no bonuses, and again, was merely trying to explain the thought process within the banks which will lead them to pay bonuses anyway. I fully expect to receive no cash bonus, but I do think for junior staff there will be some cash pool remaining as those salaries are much lower. Again, I am talking about back office / parts of front office which are profitable. We shall see as the pools are decided in december/jan at most firms.
=

Anonymous says:

Bankers give colossal campaign contributions to politicians, consequently, the entire government and its institutions are shills for Wall Street. The banks continue to pay exorbitant dividends on their stock, compensate their employees with huge bonuses and go on expensive junkets, even after the bailout, i.e., business as usual. The crooked bankers have political tin ears and the cynical politicians won’t do anything to their sugar daddies unless the people hold their feet to the fire. The price of democracy is constant vigilance.

Anonymous says:

If the lack of bonuses causes back office staff to leave for “industry”, that is what we want to happen. We do not want them to be able to keep their “best of the best” in this circumstance. Those people should return to productive industry.

The fact that the reprobates don’t see that as justice (the guy who posted earlier) makes it the more important this happen right now this year.

Charles says:

I am most happy for Mr Buffett. His investment in GS, as well as that of the US taxpayers, have been wisely spent on the retention of productive workers. Well done and long live Wall Street!