Bonus Boomers
The WSJ’s Online Executive Editor has become a Tweetmaster. This morning he points to a WSJ Forum poll running 8-1 that feels Congress is out-to-lunch in its response to the AIG bonuses. How the Obama administration has handled the bonus issue is a bit of mystery. It would seem Obama is trying to steal some of the populist positioning away from the Republicans. In the process, they’ve created a lot of confusion and stirred up some demons, according to the New York Times:
One A.I.G. executive, who spoke on the condition of anonymity because he feared the consequences of identifying himself, said many workers felt demonized and betrayed. “It is as bad if not worse than McCarthyism,” he said. Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, “for their own political agenda.”
The Times also explains that Douglas Poling, a former Merrill executive brought in by Liddy after the government takeover, had sold off 80% of the Financial Products division’s assets. Poling gave up his $6.4 million bonus and now becomes, like Liddy, someone doing the government a service.
As this issue rages, I’ve tried to explain what life is like in one of these suburbs of New York City where the financial class lives and bonuses are more than compensation, they’re a way of life:
For the bonus class, the work-hard-play-hard mentality was a badge of success. It began with the scrum to get into the best schools, the best grad programs, the best firms and ended with the push to be the best in one’s community. Social and professional competition was a way of life.
Money is the one thing that gives this group a sense of solidarity. It’s the admission ticket but also the defining factor of their identity. It’s hard for someone to feel shame when admitting fault means resigning from their way of life.
Take away the bonuses, and the financial class has no safety net. Lose your job out here and you’ve got little margin for error. There’s little social cohesion, too. We live our lives interdependently. Someone might give you business opportunity, but no one can carry you. No one expects to be carried. Affluent towns are not communities; they’re clubs. If you cannot pay the dues, you have to resign.
Sources:
Scorn Trails A.I.G. Executives, Even in Their Driveways
By JAMES BARRON and RUSS BUETTNER
New York Times; March 20, 2009
http://www.nytimes.com/2009/03/20/nyregion/20siege.html?hp
Bonuses Make the Busted Go Boom
Tales from the Suburbs Where Bankers Do Think They Deserve Their Bonuses
By MARION MANEKER
The Big Money; March 19, 2009
http://www.thebigmoney.com/articles/judgments/2009/03/19/bonuses-make-busted-go-boom
March 20th, 2009 at 9:55 am
Take away the bonuses, and the financial class has no safety net. Lose your job out here and you’ve got little margin for error. There’s little social cohesion, too. We live our lives interdependently. Someone might give you business opportunity, but no one can carry you. No one expects to be carried. Affluent towns are not communities; they’re clubs. If you cannot pay the dues, you have to resign.
Welcome to the world that most folks live in.
You’ll find the adjustment difficult at first, but then you’ll settle into a routine. It’s painful, but not life threatening.
March 20th, 2009 at 9:57 am
Crocodile tears are what you get with that story. New york is not sustainable. It won’t be long until we all hear the giant sucking sound, that is bound to happen when the drink gets down to the bottom of the straw.
March 20th, 2009 at 10:00 am
More like the entitlement class, Barry. Get real, folks. Like jpm said, welcome to the real world that other half lives in. These hypocrites have no problem with Main Street taking it on the chin in their uber focus on short term gains but when it happens to them, it’s somehow different. These elitists need to get out of the NYC/Greenwich bubble more often. Good grief.
March 20th, 2009 at 10:00 am
So, losing income is difficult for the recipients of million dollar bonuses and their ilk?
Pity.
Welcome to America.
March 20th, 2009 at 10:00 am
My stomach churned when I read that last little piece about the suburban NYC-ites, and the bonuses they feel they’re entitled to.
March 20th, 2009 at 10:03 am
Take away the bonuses, and the financial class has no safety net.
I second jpm – hey traders, welcome to the real world. I have no safety net either and no one is bailing my company out.
If they now work for a company that accepts gov’t cheese then they better get used to eating Mac and Cheese. If they want to keep their big bonuses then they better make DAMNED SURE the trades they make won’t drive their company into TARP, TALF or whatever.
Hey they could have just gone on the ‘GS’ pay scale you know.
I have little sympathy for them… none. They need to look at it as a ‘live and learn’ moment.
March 20th, 2009 at 10:06 am
Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, “for their own political agenda.”
I agree. They should have, long ago, been sacrificed based on a sound financial agenda. But, funny story about that. Someone used politics to gut the regulations as well as gut the regulatory bodies that would have seen to that in a timely manner. Cleaning it up properly, long ago, would have been far less messier. Absolutely.
Live by the sword . . . don’t later be a WATB when you are forced to die by it, later.
March 20th, 2009 at 10:06 am
I love how we can always count on the WSJ to defend their own ilk with tripe like this. Just one more reason I won’t be renewing my home delivery subscription when it ends in May. This paper is becoming a parody of itself.
March 20th, 2009 at 10:08 am
Again, I keep asking myself “what’s he got in his other hand?” The notion that, with respect to top management, these guys have turned themselves into humble, blithe civil-ish servants is astounding and ultimately supremely naive. $1 a year for now (and thank you so much for your admirable selflessness) but what do they have penciled in for themselves down the road a bit? I am apt to believe they have got themselves covered, whatever the ultimate outcome of the firms in question. They always have done…
March 20th, 2009 at 10:11 am
And it’s going to get better, Barry. I can’t wait to see the SWAT teams swarming 6 or 12 Wall Street brokerages and Greenwich, Conn. Mansions. I can’t wait to see the looks on the faces of these members of the “bonus class” when some FBI assault team member fires a breach-load into their bedroom door and tosses in a cannister of CS gas or a flashbang grenade. I can’t wait for the paddy-wagons to be filled to overflowing with Harvardites and Yalies with snobby accents.
Just a dream? Maybe, but I sure hope it happens. It’s time we treated these people as what they are: Economic Terrorists.
March 20th, 2009 at 10:13 am
They are reaping what they sowed.
But in the end, no matter which class you are in, you still go through all the stages of grief before you get to acceptance.
People don’t change the moment they get a slap in the face. It always takes time… usually in years. Most are going to hold onto what they know and this will make them sink lower.
The ones who will do best are the reality based ones, those who knew they weren’t god’s gift to the world but mostly just lucky for having gotten the opportunity to benefit from this multi decade bubble.
March 20th, 2009 at 10:14 am
Well, boo-frickin’-hoo.
I live out there too with those people. They have zero sympathy from me.
March 20th, 2009 at 10:18 am
They sure will go down fighting though. Unlike Main Street, they have powerful mouthpieces/servants like WSJ, CNBC, etc. to do their bidding. It won’t be easy bringing them through the stages of grief to acceptance. This will take a lot of time.
March 20th, 2009 at 10:23 am
This is is a minor edit for you BR, in the third paragraph above (though you must be sick of copy editors!) The person brought in was Pasciucco. The other guy, Poling, worked there for years as GC.
“Gerry Pasciucco, a former vice chairman of Morgan Stanley who was brought in by Mr. Liddy in November to wind down the financial products unit, said Mr. Poling had sold off roughly 80 percent of the unit’s assets. Mr. Pasciucco said the money from the sales would go to the government, which has handed more than $170 billion in bailout money to A.I.G. in the last six months.”
March 20th, 2009 at 10:23 am
I agree totally with jpm, et al., what whinny little $hits.
The difference between these poor souls and the average Joe is the stash of cash from previous years’ bonuses they got for peddling crap to the average Joes’ pension funds.
Man, are these people in for a whuppin’. If I owned any real estate in the greater NY area, I think I would want to sell… actually, this area is propped up some by NYC… oh, oh…
March 20th, 2009 at 10:23 am
……Oh boy the tar and feathers are out this morning…..I doubt whether this dopey law will get past the senate but even it does I’d bet on it getting thrown out by the courts since it’s essentially a bill of attainder……whether the revolting peasants want to accept it or not you’ve got a business model built around bonus payments which is not going to fundamentally change although I’m all in favor of frightening the bejeebus out of these folks so its most egregious abuses are modified…..On the political front it will largely have blown over in the next week or so……I’d say the admin aren’t too unhappy about populist outrage against “the rich” when they are trying to pass a budget which will increase taxes on “the rich”, create universal healthcare etc…….The Republicans need to be a bit careful assisting in the incitement of a war on capital and big business…..it’s easier to start fire than put them out.
March 20th, 2009 at 10:24 am
I come from the “work hard, play hard”, best b-school, prestigious firm culture. I have absolutely no problem with financial reward. My problem is that my cohorts on Wall Street are getting paid bonuses despite their utter failure, instead of being handed pink slips. The government bailed out these firms because Henry Paulson spooked Congress that there would be a huge credit meltdown otherwise. Sure, we avoided the precipitous meltdown, but we just spread the pain to many years.
Stop blaming the “work hard, play hard” culture. Start blaming the corruption of that culture.
March 20th, 2009 at 10:25 am
“Take away the bonuses, and the financial class has no safety net. Lose your job out here and you’ve got little margin for error.”
That’s what they get for giving all their money to the Club for Growth instead of Habitat for Humanity.
March 20th, 2009 at 10:28 am
@otto: But you’re not an objective voice. Your sons work on Wall Street, no?
March 20th, 2009 at 10:30 am
moham,
one thing that these U$D1/yr princes do is re-file their previous 1040s, and, using ‘income-smoothing’, claw back previous taxes paid..
March 20th, 2009 at 10:35 am
I’m not that angry about the bonuses, in fact, I’d be glad if the government paid $10 billion to anyone who could dissolve AIG in a manner that doesn’t trigger all those CDSs. Instead of rectroactively taxing income, the government should retroactively declare all those god damn derivatives NULL AND VOID, let whoever has to fail fail, and let the rest of us get on with fixing the mess they created.
Oh yeah, and whoever at AIG thought it would be a good idea to sue the US government to get back taxes it paid last year should be put in front of a firing squad if they refuse to kill themselves.
http://www.nytimes.com/2009/03/20/business/20aig.html
March 20th, 2009 at 10:35 am
Mannwich Says:
March 20th, 2009 at 10:28 am
@otto: But you’re not an objective voice. Your sons work on Wall Street, no?
…..Son and daughter actually…..my other son is a penniless musician……but my comments are entirely objective …….much more so I’d say than the rampant hysteria ….which of my comments do you find lacking in objectivity?
March 20th, 2009 at 10:35 am
I can’t wait to see how this soap opera ends.
The Republicans, their ball lickers, and an odd assortment of oddballs are trying to make the diseased vermin who created this financial mess into an oppressed class. It’s a head shaking freak show. These are the clowns who should be put in jail for criminal stupidity. Now, they’re an underclass?
The news networks appear to be sneaking in stories about these poor poor people who deserve their millions each for being total fuck ups. Are these people NUTS!!?? The news idiots who are falling for this are either on the take or among the dumbest people alive. The Republicans must like their circular firing squad … I’m enjoying it. They want up to pity the poor overpaid financial executives who survive on Federal handouts. And they seem to think they will arouse sympathy for these crooks.
There’s almost no words to describe my amazement at the total stupidity of anyone who thinks they can arouse sympathy for the Wall Street Crooks and their enablers. Don’t they think the Democrats in the 2010 elections will remember or have videos? These people are morons. Maybe they’re depending on Rush to charge up his dittoheads to use their sheep like powers and support Wall Street plundering crooks??
March 20th, 2009 at 10:41 am
Humans are social animals, and social animals compete for status.
It’s no different for a troop of chimpanzees or a clique of well-washed bankers.
The bankers think they’ve earned their status, but the chimps are better stock pickers.
March 20th, 2009 at 10:43 am
Barry:
Tell them their bonuses were outsourced. They should understand – quarterly profits are more important than FTE’s, right?
Finance isn’t the only work-hard, play-hard culture. Engineering – you know, where people actually make things and know stuff – was killed in America by these same fools.
Now they want pity? I have none. Quite frankly, Barry, I am ECSTATIC to see the amoral arrogant blowhards begging for quarters.
“Someone might give you business opportunity, but no one can carry you.”
Here’s a thought for these self-centered morons : RETRAIN. After all, that’s what they told the rest of the world for the past 2 decades. Suck it, Wall Street.
March 20th, 2009 at 10:43 am
@otto: Well, to be honest, since it seems you like you defend the elite in almost every comment you make, I would say all of them.
March 20th, 2009 at 10:44 am
if congress does pass the tax on bonuses, I don’t see how people will not jump ship to firms that didn’t get bailed out by the US gov’t.
March 20th, 2009 at 10:46 am
otto, you are talking both sides of your mouth now. On one comment, you are decrying a “war on capital and big business”, now you are telling me greed is bad. Can you define and stick to one position?
My position is that no banks should have been bailed out and has always been that case.
March 20th, 2009 at 10:46 am
Otto,
You’re blinded by your personal interest in this. It’s patently ridiculous to claim that taxing classes of people at rates they might consider punitive constitutes a bill of attainder. If that were true, then ANY form of taxation would be unconstitutional.
The tax code already differentiates between different categories of goods and people. Citizens who make $30000/yr are taxed at a lower rate than those who make $150,000/yr. Is that a punitive bill of attainder?
You might say that the tax rates in question don’t approach 90%. True. But who is to say that a 30% tax rate isn’t “punitive?” Who’s to say that a 5% tax rate isn’t “punitive?” From my perspective, anything above a 0% tax rate can be considered “punitive.”
We differentiate between tax rates on different types of goods: In California, food is taxed at 0%, goods are taxed at 8%.
We differentiate between different types of income: Capital gains are taxed at a different rate than ordinary income.
Clearly, it’s perfectly Constitutional to set any tax rate on any broadly defined group of individuals or any broadly defined form of income.
March 20th, 2009 at 10:47 am
@dead hobo: You put it FAR better than I could. For that, I thank you.
March 20th, 2009 at 10:50 am
ottovbvs said:
“….which of my comments do you find lacking in objectivity?”
For starters, the fact that you put ‘the rich’ in quotations. What else would you call MDs getting $2mm bonuses at Goldman? Or BofA sell-side PMs who underperform the index every year yet still received mid-six figures for delivering less than what their clients could get from Vanguard for next to free?
I have no doubt that some Ibankers deserve their money; when all you do is work seven days a week your entire adult life doing something most people – 99.9%+ – are incapable of doing, you should get paid. What I do have a problem with is the suggestion that those people are not rich when the majority were making $250k a year at 24 (in inflation adjusted dollars) before going back to Wharton or HBS on the company dime.
And, the other big problem I have, is that for all the PhDs beavering away in the windowless corners of Jersey City, Wall Street still created models with holes in them that first year undergrads taking a survey statistics course could have spotted. That the sell-side industry gets billions in bonuses every year for literally doing less than nothing. That some trader sitting at her desk at 10PM on a Thursday night will get half a million bucks for doing her job less efficiently than a machine (but, zOMG, those GM workers making $25/hr doing very hard labor should die in a fire).
Bottom line: most of the ibanking industry generates zero actual value. The men and women making the deals do, but the rest are wildly overpaid paper pushers or wildly intelligent mathematicians experiencing cognitive dissonance and/or principal-agent problems because their division head doesn’t understand or want to hear about pareto distributions.
I love the hedge fund industry because you get paid for generating value. I love the bonus structure of fund managers such as American where bonuses are paid on long-term outperformance. I love the bonus structure of M&A where you’re paid for how many deals you bring in. I loathe the idea that you can blow up the US financial system because you don’t know what you’re doing and still get a 7 or 8 figure check for doing so.
March 20th, 2009 at 10:52 am
ottovbvs Says:
March 20th, 2009 at 10:23 am
……Oh boy the tar and feathers are out this morning…..I doubt whether this dopey law will get past the senate but even it does I’d bet on it getting thrown out by the courts since it’s essentially a bill of attainder……whether the revolting peasants want to accept it or not ….
See my solution will be to have the IRS audit their last seven years tax returns because I bet with a %99 of certainty that they cheated. A group of people that feels so entitle to money will never let a silly thing like a tax law to take any of it. BTW your comment “revolting peasants want to accept it or not ” kind of remind me of these other one: “Qu’ils mangent de la brioche”.
March 20th, 2009 at 10:54 am
~~~
BR: Otto —
The request has been made to ask you to stop the cross talk.
Preferred are original ideas, thoughts, analyses links
March 20th, 2009 at 10:55 am
Roberts and Hudson suggest that the focus on the AIG bonus payments is just a distraction from the real issue, the counter-party fraudsters.
Why has there been no attention paid to the counter-parties who received 100 cents on the dollar for their risky bets?
http://www.counterpunch.org/roberts03192009.html
A Program of Financial Concentration: Was the Bailout Itself a Scam?
By PAUL CRAIG ROBERTS
Roberts suggests that “The Bush/Obama bailouts require serious investigation. Were these bailouts necessary, or were they a scam, like “weapons of mass destruction,” used to advance a private agenda behind a wall of fear?”
http://www.counterpunch.org/hudson03182009.html
Bait and Switch: The Real AIG Conspiracy
By MICHAEL HUDSON
Hudson writes that “…Regarding the timing, I think I have answered that above. The uproar about AIG bonuses has effectively distracted attention from the AIG counterparties who received the $183 billion in Treasury giveaways. The “final” sum to be given to its counterparties has been rumored to be $250 billion, do Sen. Schumer, Rep. Frank and Pres. Obama still have a lot more work to do for Wall Street in the coming year or so.
” To succeed in this work – while mitigating the public outrage already rising against the bad bailouts – they need to strike precisely the pose that they’re striking now. It is an exercise in deception.
” The moral should be: The larger the crocodile tears shed over giving bonuses to AIG individuals (who seem to be largely on the healthy, bona fide insurance side of AIG’s business, not its hedge-fund Ponzi-scheme racket), the more they will distract public attention from the $180 billion giveaway, and the better they can position themselves to give away yet more government money (Treasury bonds and Federal Reserve deposits) to their favorite financial charities…”
March 20th, 2009 at 10:55 am
On this fine spring morning, the Wall St. propaganda machine is in full swing. I guess they all have been talking over $200 lunches about how tough things are getting.
Put CNBC on for a few minutes to see what it was like. Big mistake. Whining about the taxes and nothing of substance. Had Congressman Sherman on so they could berate him when he talked about putting AIG into receivership and told him how we have to keep all these bonus babies in the style to which they are accustomed or the country’s done for. Then they put on some right wing ideologue right afterwards to blame it all on Freddie and Fannie.
I like the argument that if we don’t pay all these hotshots this money, they’ll leave and there will be a “brain drain” on Wall St. Don’t wait for that send in the zombie’s now. We could do with fewer of the brains who created this mess.
Where the hell are the hotshots gonna go if the don’t make a million a year? Did anyone see the story on the hotshot trader who started his own hedge fund and is now way in debt, hasn’t paid a house note in two years, and is delivering pizzas? Sounds like one of the guys Taleb talked about who are masters of the universe until they blow up and don’t understand why.
March 20th, 2009 at 10:58 am
Robespierre Says:
March 20th, 2009 at 10:52 am
……Well my sea green incorruptible it’s none of it’s likely to happen……nor do I think auditing people’s tax returns for political reasons is particularly desirable…but then you’re probably an admirer of Nixon who was rather fond of the practise.
March 20th, 2009 at 10:59 am
“Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, “for their own political agenda.”
Well, duh. When the government is running something, it is run like government. That’s the price… and there are alternatives if you don’t like it.
March 20th, 2009 at 11:00 am
I saw that one, Mike in Nola. I used to deliver pizza as a teen and while in college. It was actually decent work back in those days (I lived next to a military base, so that pizza joint was always humming back in those days….but that base is now closed) and mostly cash, but I wouldn’t want to be doing that now. You really gotta hustle in that job and it’s not always safe since you often have a lot of cash on you. Those guys that deliver to not so savory neighborhoods get robbed all the time, although I never did.
March 20th, 2009 at 11:01 am
Pity the poor financial class who’s losing it all. Maybe Biff and Skippy will have to join the Army for food. Or maybe Muffy and Jennifer will have to work the bars for a sugardaddy. Or, I suppose Biff and Skippy can work different bars for the same thing. All because of the Democrats and their horrible sense of justice. Those Monsters!!
I suppose it will be the family shame if any of their kids go to a community college and study for the kind of work that Daddy and Mommy have always tried so hard to avoid. Will suicide be preferable and more dignified than working the cash register at Wal-Mart?
One more thing you loser Wall Street bitches, I laughing at you. That warm, wet feeling on your leg isn’t rain.
March 20th, 2009 at 11:01 am
No bonuses for people who blow up companies. No bailouts for companies who blow up financial systems. No bailouts for people who have over-extended themselves willy nilly.
BUT my concern is a Thermodore Reaction and that we go too far in the other way. Freedom and Capitalism is still the best wealth generator the world has/will see.
March 20th, 2009 at 11:02 am
Robespierre – have you posted before? Why did you choose that screenname?
I dare say, with the indignation that is taking place with the populace now, I can only imagine what will happen in 20 – 30 years if this Larry Kudlow – Voodoo Art Laffer American Economic System is not thoroughly reformed beginning with Obama. This system is utterly unsustainable and will have dire consequences because the world will not finance in perpetuity our imbalances, incompetencies, and inequities. You are going to see a real Robespierre.
I will be retired living in Europe somewhere.
March 20th, 2009 at 11:03 am
Byno:
You hit the real problem there. Wall St. is really just about finding cash flows to tap into. As Cramer said in a moment of honesty: “It’s all about the commish.”
March 20th, 2009 at 11:05 am
Whine, whine, whine. These guys sound like the worst type spoilt children. Do they not realize how privleged they have been and still are, after going to “…the best schools, the best grad programs, the best firms ..” ? So they don’t get a bonus this year, so what? Life goes on, and even executives at “the best firms” have to accept setbacks just like everyone else. If they are unhappy with their current compensation, doesn’t their educational background give them the wherewithal to find new opportunities?
Let’s face it, if their firms had been allowed to go under, which would have happened without taypayer funded government bailouts, they wouldn’t have any job at all, much less a bonus.
March 20th, 2009 at 11:09 am
I don’t see a war on capital, otto. I don’t equate capitalism with government creating an unlevel playing field for the established. I am just a capitalist who wants other capitalists to get destroyed when they screw up.
March 20th, 2009 at 11:09 am
NJlou Says:
March 20th, 2009 at 10:55 am
Roberts and Hudson suggest that the focus on the AIG bonus payments is just a distraction from the real issue, the counter-party fraudsters.
Why has there been no attention paid to the counter-parties who received 100 cents on the dollar for their risky bets?
Totally agree with that Spitzer pointed that out in Slate:
http://www.slate.com/id/2213942/
At the same time AG of NY is looking into the bonuses (follow the money kind of thing). My guess is that it will lead to some other more important stuff. Sad thing is no Federal agency is investigating any of the players. Makes you wonder why…
March 20th, 2009 at 11:16 am
You can’t feel sorry for the Bonus Crowds. Middle class Americans have had to shoulder the tax burden of these people who pay very little in taxes with their off-shore bank accounts and tax shelters.
The tax system is certainly NOT progressive in which the more you make the more you pay.
Middle Class taxpayers were subsidizing the Bonus Crowds.
If only we could all aspire to become derivative traders producing nothing tangible that added to GDP, just paper profits if any at all.
Recently the NYT had a story in which the profits at these firms were all a ‘mirage’ but the bonues were real.
The government should now require all these firms to restate their books and the bonus money clawed back from the fraudsters.
Every bonus season, the hapless US taxpayer was supposed to gawk in jealousy as the banksters bought the biggest Park Avenue Coop in NYC, the latest German made luxury sedan or a summer share in the Hamptons.
With the help of the traitors in the US Congress, they created a 2-tier income tax system: the regular income tax system and the much lower tax system on capital gains.
Why do we need these two tax systems?
The lower capital gains tax code allowed these banksters to take their conpensation in the form of stock and bonuses taxed at the lower capital gains rate. It encouraged speculation of the leveraged kind that is imploding even as we speak.
March 20th, 2009 at 11:16 am
very simple solution…get a job at company that did not accept TARP money. unfortunately you are out of luck if you were part of the 80% of Wall Street who were just enjoying the rising tide. The best traders and rainmakers have not lost a minute of sleep over their future earnings potential.
March 20th, 2009 at 11:17 am
CNBC Sucks Says:
March 20th, 2009 at 11:02 am
“Why did you choose that screenname?”: I just like history a lot.
March 20th, 2009 at 11:25 am
cry me a river.
March 20th, 2009 at 11:39 am
ottovbvs Says:
……So do I……But Robespierre… that rather murderous little lawyer from Arras…He’s not very different from Stalin or Pol Pot he just lacked their technology for killing
A Robespierre, Stalin or Pol Pot can only come to being when society is dominated by people who refuse to see the harm they have caused by gaming the system to extremes to their own benefit. It is not greed it is corruption. But of course since you like history I’m not telling you something you don’t know already.
March 20th, 2009 at 11:40 am
Yes. Dark days indeed in Fairfraud County….. but not for the real people of NYC and Connecticut.
The Nazi army of occupation is in full retreat. IBers are retreating into the Recihstag.
March 20th, 2009 at 11:40 am
Dead Hobo @ 10:35am, Wall Street is mad as hell and they’re not going to take it anymore!
March 20th, 2009 at 11:41 am
Bloomberg ran a piece earlier this morning showing shuttered storefronts on the “Rodeo Drive” of Greenwich. Oh, the horror, the horror!
March 20th, 2009 at 11:43 am
…….Just for those who may be unfamiliar with what a bill of attainder is and how it’s regarded by the constitution
“Definition: A legislative act that singles out an individual or group for punishment without a trial.
The Constitution of the United States, Article I, Section 9, paragraph 3 provides that: “No Bill of Attainder or ex post facto Law will be passed.”
March 20th, 2009 at 11:47 am
Robespierre Says:
March 20th, 2009 at 11:39 am
…..Robespierre…..This of course is true but I somehow don’t see 21st century America as ancien regime France or Tsarist Russia…..and in all these cases the cure turned out to be worse than the disease
March 20th, 2009 at 11:56 am
That article’s quotes, wow. Just wow. They live in another world. Like the hooker doing business in the North Shore suburbs in Risky Business, “You people have a lot of bonds”
This bonus blowup is exactly what the political class deserves. The money should be paid, just to prove the point that it was wrong not to allow these companies to go into bankruptcy. BK would have solved all this. The USA could still back up the “risk”, but not keep rewarding the screw-ups.
As it stands I support the bonus payouts, just to stick it to the taxpayers that the powers that be are the ones screwing things up going forward by not allowing BK. This is worrying about a mere fraction of the money that has been burned over the last 12 months. Typical political BS.
March 20th, 2009 at 11:58 am
we all seem to forget these folks “earned” their prior big comp packages by taking huge risks with other peoples money.
Not a bad gig.
now we have “entitlement” at the upper end and lower end. Middle class screwed again. whats left of it.
let these putzes run a small solely owned business–let them sweat when they pay bills, Let them puke when there is no business. Then they wil really understand risk and reward.
Let them take money out of savings to meet payroll and pay bills.
their biggest problem is they are so used to the high life they cannot adjust–its an embarrassment.
How many BMWs and MB’s and Lexus’s have been leased to these prima donnas and how quickly will they rub their phony wealth into your face when they have the chance.
If they did not take down the entire economy it would be fun to watch them suffer. Why is it that the big houses made most of their money trading for the firm. I thought the customer came first–no front running (another SEC failure) .
March 20th, 2009 at 12:05 pm
In the end you reap what you sow. It took a while for the harvest but the roots were all rotten.
The Senate will never pass the Bonus Tax legislation but the point of it was to get the Republican hypocrites in Congress to eat crow. At this point I believe they are choking on it.
March 20th, 2009 at 12:13 pm
All the “big houses” made money shorting the crap out of each other in the Fall.
You can learn a lot, just by watching. Bonus seems to be a dirty word, all of a sudden.
There are literally hundreds of for sale signs in Darien, CT and Greenwich.
Here at Schadenfreude Asset Mgmt., we are eagerly awaiting further developments in the Land Of Entitlement.
March 20th, 2009 at 12:15 pm
Help!
M. Ritholz, Gentlereaders, I’m trying to find an article here that linked to site that listed 10 or 15 legislative or regulatory acts that lead to the current crisis. I thought I saved it but cannot find it.
Sorry for the off topic message, but I need to rebut a peice of stupidity that will soon be making the rounds in my family.
Thanks, TPS
March 20th, 2009 at 12:17 pm
ottovbvs Says:
March 20th, 2009 at 11:47 am
…..Robespierre…..This of course is true but I somehow don’t see 21st century America as ancien regime France or Tsarist Russia…..and in all these cases the cure turned out to be worse than the disease
Dude lighten up no one is proposing the same kind of “solution” and the moniker Robespierre is used for illustration purposes only. Now as for the results of the French revolution: It destroyed the monarchic and created a republic not very different from that of good old US. Now those changes came into being in a very bloody way because the ruling class of the time resisted or were blind to their “evil” ways. They saw no difference between their possessions and that of the nation. Funny, sort of what the bankers feel like today between their possessions and those of the tax payers…
March 20th, 2009 at 12:19 pm
“Sorry for the off topic message, but I need to rebut a peice of stupidity that will soon be making the rounds in my family.”
Don’t bother, you’ll just hear about upticks, mark to market, the CRA, Fannie-Freddie.
I would suggest sitting there and smiling along, or be safe and talk about the weather or the NCAA.
March 20th, 2009 at 12:30 pm
Robespierre, I wouldn’t back off too much for otto. Remember that the French Revolution started with France in an American-style deficit economy with a tax system that was favorable to the nobility and clergy but hugely unfair to the Third Estate. Anything is possible when human beings starve and become desperate. We are by no means there, but we need to vote Democratic for twenty years to avoid the same situation.
I think Larry Kudlow and Voodoo Art Laffer may have been economic advisors to Louis XVI.
March 20th, 2009 at 12:32 pm
Bernanke: Exec Compensation Must Be Monitored
What a brilliant epiphany from academic Ben ! Send his worthless ass back to Princeton so he can study more.
March 20th, 2009 at 12:33 pm
Robespierre Says:
March 20th, 2009 at 12:17 pm
…….When it comes to lightening up I think you’re looking in the wrong direction ….I’m just pointing out in as dispassionate a way as possible reality, illogicality and contradictions, and having a bit of Freudian fun with your moniker
March 20th, 2009 at 12:34 pm
Bernanke: Community banks are the “lifeblood of our economy” while basically fisting them with his blatant favoring of the large failing banks at their expense. What a farce.
March 20th, 2009 at 12:36 pm
“Fisting them”, huh, Mannwich? LOL
March 20th, 2009 at 12:37 pm
CNBC Sucks Says:
March 20th, 2009 at 12:30 pm
Remember that the French Revolution started with France in an American-style deficit economy with a tax system that was favorable to the nobility and clergy but hugely unfair to the Third Estate. Anything is possible when human beings starve and become desperate.
…….Let me have your address and I’ll send a food parcel….
March 20th, 2009 at 12:38 pm
It means hitting them with your fists, right? Time for your medication, MW.
March 20th, 2009 at 12:38 pm
@CNBC Sucks: Yes, I thought that terminology was apt in this instance. A little crude (ok, A LOT crude) but apt.
March 20th, 2009 at 12:39 pm
Thanks for the reminder, lb. Need to pop my lisinopril soon (for high BP).
March 20th, 2009 at 12:40 pm
Jeff, time to cut back on European video downloads in the Unabomber basement.
March 20th, 2009 at 12:41 pm
@CNBC Sucks: LOL. Good point. Might need an early workout today or beer.
March 20th, 2009 at 12:44 pm
MW, You need to look at more pictures of CNBC babes. Dull market today.
BTW, I am not getting heavily short until I see April “Fool’s Day” in the windscreen.
March 20th, 2009 at 12:47 pm
As US taxpayers have theoreticallybecome the owners of AIG, we probably should be concerned that the AIG name has become so tainted that it will become challenging for them to write new business. I would like to use my non-existent taxpayer voting rights to campaign for reducing their sales expenses, and selling all components of the business that are saleable. Goal would be to reduce the bleeding, and minimize future bailouts. I find it hard to be optimistic that AIG will throw off cash from operating earnings.
March 20th, 2009 at 12:48 pm
Here’s an idea, make these companies that have traded toxic assets for cash take back these worthless securities and start force these companies to pay their employees with these worthless products that they created valued at 100 cents on the dollar, and tax them at the normal rate. That would in effect claw back previous compensation.
March 20th, 2009 at 12:49 pm
love the hedge fund industry because you get paid for generating value. I love the bonus structure of fund managers such as American where bonuses are paid on long-term outperformance. I love the bonus structure of M&A where you’re paid for how many deals you bring in. I loathe the idea that you can blow up the US financial system because you don’t know what you’re doing and still get a 7 or 8 figure check for doing so.
————–
Hedge funds: They’re not generating any value, the ones working in the underlying companies are. You can actually say that when they use leverage, they contribute to value destruction because they are adding liquidity to the economy without producing no goods and services. This generates inflation.
Overperforming fund managers don’t necessarily create value in the economy… their value in the economy is to direct capital to the right industries/companies…. what a farce that has been!
Most M&A deals don’t work, they just fill the pockets of the deal makers.
Let’s face it most of the finance industry has been one big money grab and a big chunk of it should not have even existed.
March 20th, 2009 at 12:50 pm
Damn lack of a preview function, I meant
Make these companies that traded toxic assets for cash with the fed take back these worthless securities and force these companies to pay their employees with them valued at 100 cents on the dollar, and tax them at the normal rate. That would in effect claw back previous compensation.
March 20th, 2009 at 12:52 pm
“It is as bad if not worse than McCarthyism,” he said.
Exhibit A in the rotting of the American Mind.
McCarthyism destroyed, without any factual basis, peoples’ entire careers and professional reputations so that they could not get any work in their profession for the rest of their productive lives.
It was not about whether U.S. taxpayers are legally obligated to give you a $2 million bonus as thanks for driving your own company and much of the U.S. economy into insolvency.
Am I missing something here?
March 20th, 2009 at 12:55 pm
pvd:
If I were an AIG employee and the government NEEDED me there to help them untangle the spaghetti because I was part of the group who created it, and they did not want to pay me for this work, I’m trying to understand why I would stay there and work for free!
March 20th, 2009 at 12:56 pm
Oh. And a few numbers:
$165 million = AIG bonuses.
$79 million = entire federal govt. funding for heating assistance to elderly and low income people in Maine in 2008.
$30 million = entire amount spent by Hawaii and U.S. govts. to prevent native birds in Hawaii from going extinct during the period 1996 – 2004.
$165 million is a lot of money.
Fill in your own brackets.
Cheers.
March 20th, 2009 at 12:59 pm
Jeff,
LSS: get your serum potassium level tested..
http://www.mongabay.com/health/medications/Lisinopril.html
March 20th, 2009 at 1:03 pm
Thanks Hoffer. BP way down these days, believe it or not with everything going on. Biggest factors for me – changing diet (eating at home a lot) and regular exercise. Does wonders. Maybe venting at TBP helps too.
March 20th, 2009 at 1:06 pm
“It is as bad if not worse than McCarthyism,” he said. Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, “for their own political agenda.”
Hmmmm….life’s a bitch sometimes.
Like I have been saying the giant cash bonuses are just a corporate circle jerk. The investor get’s the short end. For the exectives the public corportation is literally a giant ATM that spits our millions instead of 20’s.
We need to go to stock bonuses that vest over time and increasing dividends.
March 20th, 2009 at 1:20 pm
“Take away the bonuses, and the financial class has no safety net. Lose your job out here and you’ve got little margin for error”.
Yeah, well, if they hadn’t blown all their money on Ferraris, cocaine, and hookers, they’d still be in good shape right now.
March 20th, 2009 at 1:20 pm
“It is as bad if not worse than McCarthyism.”
Someone needs to take their financial genius and do a John Galt.
We won’t miss you.
March 20th, 2009 at 1:22 pm
The sucker’s rally losing steam. Probably get another desperation leg up courtesy of the mutual funds next week but we will be retesting the lows by May/June, maybe sooner.
March 20th, 2009 at 1:23 pm
Japan’s “suicide forest”
http://www.boingboing.net/2009/03/20/japans-suicide-fores.html
The Obama admin should tell the Wall St crooks about this then even send them a FREE one way ticket.
March 20th, 2009 at 1:26 pm
Jeff,
no doubt. food is always the first drug.
you might want to 2x-check why you’re on those scrips, those things prescribed like PEZ..
also, if your doc is giving you the “BP’s a little on high-side”-line, he’s FOS. each, and every has their own ‘average’…
as a +, the more you know about, the better you’ll get..
March 20th, 2009 at 1:26 pm
Mannwich @ 1:22
I’m short a bunch of QQQQ calls, just in case the market goes sideways for a while.
March 20th, 2009 at 1:30 pm
This is lynching Arthur Anderson for Enron all over again. We should outraged over the bonuses for AIG since we’re paying bonuses to people who are effectively insurance claims agents now. If they were introspective enough, they would give their ill gotten gains.
The problem I have with the 90% tax on all recipients of TARP money is that it’s such an overt knee jerk reaction stemming from complete ignorance of the situation. Maybe we should end up taxing bonuses at 90% but shouldn’t it be through deliberation rather than a lynching mentality? With Enron and Arthur Anderson, we got Sarbannes Oxley and look how much that helped in managing off-balance sheet vehicles and the massaging of earnings.
This episode is only a microcosm of the real issue, though: the government’s plan sucks. If you let AIG fail, the a bankruptcy court could deal with these employment contracts based on legislation in place. Lehman had a ton of employment contracts and we aren’t hearing about those so our system works. The government has to either nationalize or let institutions fail because as this episode illustrates, it’s the only fair thing to do.
March 20th, 2009 at 1:31 pm
Douglas Watts @ 12:56
Good observation- I also want to point out that I do not believe people are upset with the bonuses per se- but that bounses were given from companies that would be out of business if not for a USG rescue- no company,no bonus. The companies should have been allowed to file bankruptcy. The USG is complicit by allowing companies to falsely succeed when they should have failed outright. That would certainly take out all uncertainity that the financial system is bust and that this country is in for a long gruelling slog.
March 20th, 2009 at 1:34 pm
@choiway: I think most of us here agree that this tax legislation is a sideshow and distraction away from the real issues but the WSJ and CNBC et al trying to promote the idea that this is somehow an undeserved “witchhunt” of those poor, honest (self-pitying) Wall Streeters is just too much for may of us to take.
Some here and elsewhere like to dismiss this anger on Main Stret as unhelpful hysteria but do it at your peril. It’s real and deserved and will only get worse if Obama doesn’t show some real leadership on the issue.
March 20th, 2009 at 1:36 pm
here’s something that may lighten things up:
http://baracksteleprompter.blogspot.com/
March 20th, 2009 at 1:46 pm
choiway Says:
March 20th, 2009 at 1:30 pm
This is lynching Arthur Anderson for Enron all over again.
______
If I remember correctly, Arthur Anderson employees were as guilty of fraud as were the criminals at Enron. Add to that the crime of obstruction of justice (destruction of evidence).
Arthur Anderson go “lynched” because they were guilty.
March 20th, 2009 at 1:47 pm
Correction:
If I remember correctly, Arthur Anderson employees and management. The criminality was part of the corporate culture.
March 20th, 2009 at 1:50 pm
Is baby going to cry?
I think the peasants have little tolerance for this entitlement view.
March 20th, 2009 at 1:57 pm
@ AndrewShaw
I try, but this was particularly stupid, it was a pdf of a NYT article on the Community Reinvestment acts’ effects of Fannie Freddie.
Also I found it:
Wall Street’s Best Investment: Ten Deregulatory Steps to Financial Meltdown
http://www.multinationalmonitor.org/mm2009/012009/weissman.html
March 20th, 2009 at 2:02 pm
In defense of the Bonus monkeys (hey, somebody has to): File this topic under “Don’t hate the playa, hate the game.”
The Bonus Crowd didn’t create the system. They just fed it, churn ‘n’ burn, hollow men and women chasing and validating someone else’s idea of The Brass Ring. Easy targets. The tragedy is that all this country had to offer its “best and brightest” little monkeys was a narcissistic lifestyle with 5 am spin classes and jobs slaving away to tend to the creation of illusory value. What an epic squander of energy and talent.
The people I really want a piece of are the ones who have turned 16 oz cans into 12.4 oz cans at the supermarket. Talk about negative value.
March 20th, 2009 at 2:35 pm
Marcus Aurelius Says:
March 20th, 2009 at 1:47 pm
Correction:
If I remember correctly, Arthur Anderson employees and management. The criminality was part of the corporate culture.
…….How would you know that…..did you work there….no you saw Chris Matthews or some other idiot bloviating about it……Arthur got destroyed because one office no doubt with a bit of blind eye turning at the top got itself involved with a criminal crowd in Texas….As a consequence tens of thousands around the world who didn’t have a criminal bone in their body got the shaft…..and then about three years later when a great enterprise had been destroyed all charges were dismissed…..no doubt this is creative destruction in your book
March 20th, 2009 at 2:36 pm
Transor,
I like that take best, but, while they didn’t create ‘la sistema’, they animated it, gave it voice and action, and perpetuated it into v.1.1, 1.2, 1.n+1…, IOW they re-created it.
whether they were Professionally duped, or not, though is, to me, a really good Q:.
but, again, they fell out of the same ‘education/indoctrination’ facilities that were peddling Cost Accounting Uber Alles= effective Management. to your point about the cans..
personally, I think we need to hear a lot more from Carl Icahn.
“A lot of people die fighting tyranny. The least I can do is vote against it.”
– Carl Icahn at Texaco annual meeting. Jan. 20, 1988
http://www.icahnreport.com/report/2008/10/compensation-co.html
About CEOs – Anti Darwinian Metaphor – Survival of the Unfittest
Posted by Carl Icahn June 16, 2008 : 8:15 PM
http://www.icahnreport.com/report/2008/06/about-ceos.html
March 20th, 2009 at 2:39 pm
DL Says: “I’m short a bunch of QQQQ calls, just in case the market goes sideways for a while.”
My best guess is that this is a pullback in the rally and we bounce from here. But let’s see how the last hour plays out. A short-covering bounce today and then a retest of 760-765 on Monday seems like a likely scenario. No bad economic numbers until at least Wednesday.
March 20th, 2009 at 2:41 pm
Transor Z Says:
“The Bonus Crowd didn’t create the system.”
Totally disagree. WS created and corrupted the system together with the politicians. How else can they become very rich without actually creating anything of value?
The tragedy is that all this country had to offer its “best and brightest”
The “best and brightest” is another fallacy put forth by these group. Marketing baby just marketing. Just like when the King used to say that he was a direct descendant from God! You know blue blood. Please…
These are mostly the best to steal if nothing else
March 20th, 2009 at 2:44 pm
not sure we can feel for them at all. after all thats the world the rest of us have lived in. and they have been big advocates of wage destruction for the rest of us. while advocating that they need big salaries and bonuses. not sure why that is so though considering the results they have gotten
March 20th, 2009 at 2:45 pm
Through early at the salt mine today…
One of my partners wants to talk about the economy this weekend after the Fed announced it would begin QE….anything you guys would tell him?
(He has lost 50% of his shirt so far…)
March 20th, 2009 at 2:46 pm
Froma Harrop wrote a column that appeared in the Houston Chronicle about Law proffessor and Keating Five (S&L Crisis) prosecutor William Black’s proposal to prosecute the scoundrels:
”
As the bottom was falling out of its derivatives trading, AIG was reporting healthy profits, he [Black] told me. That’s not allowed. Meanwhile, the company created a short-term bonus system for its top execs. The massive prior bonuses should be clawed back, he said,
‘and we do that by establishing that there is accounting fraud and by putting in intelligent, vigorous investigators.’
Speaking of which, Goldman Sachs said that it had no material exposure to AIG, but we now learn that it has received $13 billion in AIG bailout money.
‘That’s a felony to make a false disclosure, Black adds…
… reserves are required under Generally Accepted Accounting Principles (GAAP), according to Black. These are the rules accountants must follow in preparing financial statements…
The “buzz on Wall Street” is that the bonus-deprived AIG employees might leave, then ’simply turn around and trade against AIG’s book’ writes Andrew Ross Sorkin in The New York Times Dealbook column. …
Black …almost laughed. Using that inside information would be securities fraud, ‘and everyone that hires them would be frauds.’
”
http://www.chron.com/disp/story.mpl/editorial/outlook/6320003.html
March 20th, 2009 at 2:46 pm
This line from Rolling Stone’s Matt Taibbi about the AIG mess still has me laughing…..
“The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror.”
March 20th, 2009 at 2:48 pm
and this probably is a sideshow to cover up the fact that a big junk of the bail out bunch owe taxes. which to get bailed out they weren’t suppose to
March 20th, 2009 at 2:48 pm
I also want to point out that I do not believe people are upset with the bonuses per se- but that bounses were given from companies that would be out of business if not for a USG rescue- no company,no bonus. — call me ahab.
True to a point. Myself and many people, hmmm … like elementary school teachers, are very upset and chagrined that our society values and prices the labor of a financial “jockey” at 1,000 times the value of the person who teaches our own children. If the U.S. was an advanced, rather than dying, society, we would be paying school teachers what we are paying financial jockeys. This is the whole purpose of having a society. You get what you pay for and at $35 or $40,000 for a teacher’s salary and $1 million for a financial jockey crashing a company, we are getting exactly what we paid for:
Nothing.
March 20th, 2009 at 2:49 pm
Fuck the WSJ and their poll. who’d they poll, the bonassholes who got my tax money.
On principle I’m a capitalist and feel people have the RIGHT to be rich. But when angry I often go with my gut and vomit my principles up.
As I stated in another thread I’m filing bankruptcy, the IRS has agreed that my tax debt is noncollectable and my wife left my broke ass. Nobodies bailing me out but I’m going to try again.
You know why? I grew up in the south Bronx. I still remember being embarrassed going to the grocery store with food stamps. I remember dropping out of school to deliver groceries on central park south. I remember the rich people telling me not to step on the Persian carpets as I put their bread and milk on dinning room tables. And the only thing going through my head was , I’m going to get rich too and buy a Persian carpet. I never did get a Persian carpet and the rug that I did get was pulled from under my feet. I’m just going to dust myself off and try again.
But with these bonassholes I find my self saying, let’s get these mother fuckers.
March 20th, 2009 at 2:51 pm
This really just isn’t worthy as a footnote in history. AIG et all will get mentioned either as victims or the root cause.
Events are in motion, history is in the making. The Running of the Bulls has begun and there are no artificial wooden barriers to protect you.
March 20th, 2009 at 3:03 pm
Douglas Watts Says:
March 20th, 2009 at 2:48 pm
“If the U.S. was an advanced, rather than dying, society, we would be paying school teachers what we are paying financial jockeys.”
……Some of you guys say the darndest things……The US is not a dying society……Heading into a period of relative decline maybe but still the most important economy in the world and likely to remain so for the forseeable future……..And in what society at whatever time in history have school teachers been paid as much as financial jockeys
March 20th, 2009 at 3:06 pm
otto wrote: “The US is not a dying society”
Voodoo Art Laffer fisted America.
March 20th, 2009 at 3:08 pm
@CNBC Sucks: Am happy you’re putting my term to apt use. Excellent work.
March 20th, 2009 at 3:13 pm
I had to wait two and a half hours for otto to put that one on the tee, but sure enough, he did.
March 20th, 2009 at 3:13 pm
This passage from the Matt Taibbi article is for you, otto. Your homework for the weekend is to let it sink in and marinate.
“There are plenty of people who have noticed, in recent years, that when they lost their homes to foreclosure or were forced into bankruptcy because of crippling credit-card debt, no one in the government was there to rescue them. But when Goldman Sachs — a company whose average employee still made more than $350,000 last year, even in the midst of a depression — was suddenly faced with the possibility of losing money on the unregulated insurance deals it bought for its insane housing bets, the government was there in an instant to patch the hole. That’s the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers’ credit card.
The people who have spent their lives cloistered in this Wall Street community aren’t much for sharing information with the great unwashed. Because all of this shit is complicated, because most of us mortals don’t know what the hell LIBOR is or how a REIT works or how to use the word “zero coupon bond” in a sentence without sounding stupid — well, then, the people who do speak this idiotic language cannot under any circumstances be bothered to explain it to us and instead spend a lot of time rolling their eyes and asking us to trust them.
That roll of the eyes is a key part of the psychology of Paulsonism. The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize “toxic” risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers.”
March 20th, 2009 at 3:22 pm
I kid you not, Erin Burnett just asked viewers if they agree that how Obama handles the AIG bonus issue “will determine what kind of person he is.”
Wingnuttery is now the official religion at CNBC.
March 20th, 2009 at 3:22 pm
@otto: It may be beneath your elitist aristocratic sensibilities to hang with the unwashed masses and read Rolling Stone, but here’s the link to the full article. I want a book report on my desk on Monday morning..
http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print
March 20th, 2009 at 3:28 pm
ottovbvs Says:
March 20th, 2009 at 2:35 pm
Marcus Aurelius Says:
March 20th, 2009 at 1:47 pm
Correction:
If I remember correctly, Arthur Anderson employees and management. The criminality was part of the corporate culture.
…….How would you know that…..did you work there….no you saw Chris Matthews or some other idiot bloviating about it……Arthur got destroyed because one office no doubt with a bit of blind eye turning at the top got itself involved with a criminal crowd in Texas…
_____
Didn’t work there and don’t listen to Matthews. Are you one of their attornies or just an apologist?
Anderson was deeply involved in the Enron, Waste Management (both HQ’d in Texas), Sunbeam (Florida), and WorldCom (Virginia) accounting scandals. Apparently, they get into bed with companies practicing fraudulent accounting wherever they operate. Of course, this doesn’t prove anything – maybe it was just bad luck. Strangely, they’ve settled lawsuits with all of these companies (barring disclosure of terms, and not accepting any guilt, of course). I don’t know what you see – I see a criminal corporate culture.
BTW, and unrelated: you previously accused me of “posting complaints about Geithner for weeks” on this blog, although I hadn’t. Come up with any examples, yet, or was that just your lack of character showing? ottobvs: Blog thug.
March 20th, 2009 at 3:29 pm
@otto: Part of sound leadership is hiring the right people to run things. Obama has shown he is lacking in that regard. Just because I volunteered for/gave to O’s campaign, doesn’t mean that he still doesn’t work for ME/US and that we shouldn’t question his judgment, leadership and decision-making. That’s what many of those on the right did with Bush, followed blindly assuring everyone that he knew best. It wasn’t right then and it’s not right now.
Read the article. You couldn’t have read it by now. It’s quite long. I’m sure you won’t bother though. It’s far easier always dismissing those that disagree with you as somehow not as smart or informed as you.
I’d almost be willing to bet that you probably hang out with many of these folks (black tie “charity” dinners anyone?), which, again, is why you defend them at ALL costs. Dem, GOP, what’s the difference to me and others if in the end they’re only going to protect their friends at all costs to me and this country as a whole?
March 20th, 2009 at 3:30 pm
Mannwich, to add to Taibbi’s thoughts: The truly tragic part about America is that those “NASCAR dads” passionately hate the “broke-ass liberals” for trying to get in the way of the “connected class”. The diversionary culture war divides the middle-class and poor which allows the rich to wage systematic economic class warfare on us all. The sowing of the seeds of our destruction can be seen in footage of the 1964 GOP convention.
In any other nation on Earth, and in the America of the first half of the 20th Century and earlier, today’s Republicans would have been run out of the country for the thieving, conniving, destroying rascals that they are.
March 20th, 2009 at 3:35 pm
Exactly, CNBC Sucks. They’ve been dividing us for years now to keep the attention off of their thievery and other sordid misdeeds. The elites like otto are dismissive at their own peril. The winds are a changin’. They’d better flee the palace soon because the peasants are waking up (with help from absurd apologists like the WSJ and CNBC, thanks a lot!) are coming for them soon.
March 20th, 2009 at 3:41 pm
Mannwich Says:
March 20th, 2009 at 3:29 pm
……You see Mannwich I think he has hired the right people…..furthermore, I think in the midst of the worst financial crisis since the thirties he and they are entitled to a little more than 60 days to sort it out free of monday morning quarterbacking from Rolling Stone type minds…..and I find rubber chicken charity dinners immensely boring btw and have hardly ever been to any….probably because I don’t like giving money away.
March 20th, 2009 at 3:43 pm
ott0- you sure are getting a lot of fan mail- I’ll give you credit though- you are consistent. My impression is that you can’t see the US any other way than how you see it now. However- things change- socities change- countries collapse- look at Germany as an example- a former bastion of fantasism and fascism and now a socially responsible liberal democracy- now that’s change. The US can become something better.
March 20th, 2009 at 3:48 pm
A foolish consistency is the hobgoblin of little minds.
March 20th, 2009 at 3:50 pm
Marcus Aurelius Says:
March 20th, 2009 at 3:28 pm
So on the basis of a few screw ups you see a criminal corporate culture at Arthur…you’ve never worked there, you don’t know anyone from there….but you know that an organization with 85,000 employees around the world and offices from Sydney to Scagway was riddled with criminality….even though the charges that destroyed this business were ultimately thrown out……And yes I’ve know a few people from AA and better, more honest people you couldn’t expect to meet….but based on fa you know they’re all criminals…
March 20th, 2009 at 3:56 pm
leftback says:
“My best guess is that this is a pullback in the rally and we bounce from here”
Alright- please explain. My impression is that the Fed and USG can’t pull one more rabbit out of the hat. People are starting to see that things will remain bad if not permanently so- people have lost wealth in their homes and savings and will refrain from spending and save what they can- the economy was a bacchanalia of credit expansion- without it the economy will contract. Why do you believe in a rally?
March 20th, 2009 at 4:01 pm
call me ahab Says:
March 20th, 2009 at 3:43 pm
……Actually Ahab if you’ll look at my postings you’ll see I’m constantly pointing out the structural flaws in US society and it’s obsession with all kinds of simplistic myths about itself and others…..however I always stick closely to reality and try to avoid over generalizations and judgements based on emotion rather than facts…..You guys are actually a bit addictive…..quite a few of you are obviously very bright…..but the way you wander off into illogicality, emotion, self contradiction, nihilism, and ill founded extrapolations never fails to surprise me
March 20th, 2009 at 4:03 pm
A very entertaining thread. Here’s (part of) why I’m so freakin’ pissed off at bonuses and compensation.
Perspective. Yes let’s do put the bonuses/compensation in perspective, but not against the bailout $.
How about the perspective of the median family that makes, what? 65K / year. Great. Multiply by 30. You get less than $2M for a lifetime of work when the schmucks are pulling that down in bonus for a year?!
And while median income has gone down, the compensation of execs has increased from like 25 times average pay to 400+ times average.
And please don’t talk about value. You can’t tell me that it’s any more complicated to run a multinational or large corp now than it was 30 years or whenever ago. I say bullshit.
And since this is a rant, I’m not gonna take the time to separate those who do earn it and those who don’t. Frankly at this stage, the majority do not add anywhere near the value claimed nor are they engaged in truly productive work. It has become a game of greed, divide & conquor, and screw the masses (as many here have said in more eloquent ways).
March 20th, 2009 at 4:11 pm
On To The Other Verbal Bullshit Variable Shilling for the poor professional class.
Hi ottovbvs.
Some names here for you to defend:
http://www.slate.com/id/2214107/
March 20th, 2009 at 4:20 pm
Worked on both the sell-side (broker/dealers) and the buy-side (hedge funds) for 11 years. Don’t see why anyone should get a bonus if taxpayers are propping up that company.
Let’s be honest here, folks. No performance, no pay, it’s pretty simple. The fact that bonuses paid last year were about equal to the amount paid in aggregate at the height of the dot.com bubble is ASSININE. It’s a true raping of the taxpayer. AND AGAIN, I’VE WORKED ON BOTH THE SELL- AND BUY-SIDE.
The dirty secret about the sell-side is that they’re more like hedge funds than hedge funds are like hedge funds. Leverage ratios of 35-to-1? Gimme a break. The model is broken. You want your bonus? Then raise capital from the private sector. Sad thing is that the banks did that. But it wasn’t enough so they went hat in hand and begged for more and the only person left to pick them up out of the gutter was Uncle Sam. So Sam’s give’s them a loan or buys preferred stock. And what does he get for saving a dead-beat financial has-been that doesn’t deserve to be in business? He gets a crumby subordinated bond stake or a massively over-priced common stock position — just compare Buffets terms with the terms we got.
It’s all about financial rape. The bankers are INSANE. They deserve NOTHING if the fact that they still have a job is due to them ripping my face off via Paulson/Geithner’s giveaways. And that’s what they were: HANDOUTS. And the bankers have the gall to cry about not getting a bonus. Gimme a break. They’re lucky to have jobs.
But here’s the kicker folks. Don’t worry. Banks are going to lay-off another 30% of people. Just wait, it’s coming. The business isn’t out there. Staffing levels are way to high. It’s gonna happen, the banks are as over-staffed as the autos. Capacity is way too high.
March 20th, 2009 at 4:22 pm
Darmah,
Good old ottovbvs and his ilk don’t get it. You see, they’re part of the meritocracy (they studied SO HARD for SO MANY years) and when they deem to even think about a paltry 65k a year, they are merely participating in noblesse oblige. The point is that they don’t realy give a damned about anyone but themselves. Selfishness is a virtue to them. A stuck up attitude is required for a person of, ahem, talent and proper upbringing, don’t you know.
The media is always apologizing for these pathogenic bacteria. See today’s Washington Post (”Let’s put down the pitchforks” article) but it’s the same old story: They think they can game us forever. They love that spot on top of the shit pile. Shit is as shit does.
March 20th, 2009 at 4:23 pm
Everyone Says:
March 20th, 2009 at ??:??
can still…..see period button…..through my gin-induced……stupor……must post……for God and family……rum-runners and slave-traders all……never dip into capital…….NQOSOPD…….blaaaaaargh!
March 20th, 2009 at 4:24 pm
ottovbvs Says:
March 20th, 2009 at 3:50 pm
Marcus Aurelius Says:
March 20th, 2009 at 3:28 pm
So on the basis of a few screw ups you see a criminal corporate culture at Arthur…you’ve never worked there, you don’t know anyone from there….but you know that an organization with 85,000 employees around the world and offices from Sydney to Scagway was riddled with criminality….even though the charges that destroyed this business were ultimately thrown out……And yes I’ve know a few people from AA and better, more honest people you couldn’t expect to meet….but based on fa you know they’re all criminals…
____
I never said anything of the kind about individuals working there. I said “Corporate culture”. I didn’t say I didn’t know anyone who worked there, either (dude – you have a problem with honesty). I do know people who worked for AA who now work for Accenture, and I’d say they’re probably not criminals (how would I know?). Of course, the people you know are the most honest – because you know them. The charges were not “thrown out” – the decision was reversed on appeal (allowing ignorance of the law, no less. Try getting that consideration at your local courthouse). What’s your excuse for their involvement in Wast management, Sunbeam, and WorldCom?
So, any examples of my comments regarding Geithner? Can’t back it up, can you? I’d say you’re a snake in the grass, but I don’t want to libel the snakes.
March 20th, 2009 at 4:28 pm
Hey ottovbvs,
Vega worked there and he has pegged the composite crap for what it is. So your kids work there and you are doing the philial loyalty thing? Then they are crooks too but keep on defending them. We might even believe you if you try real hard.
Give him hell, Marcus!
March 20th, 2009 at 4:28 pm
The straw man is otto’s specialty. Think you should change your handle. We may be tilting at windmills here, but at least they’re real windmills.
March 20th, 2009 at 4:28 pm
“Take away the bonuses and there’s … NO SAFETY NET?” Poor babies.
They didn’t save a dime when they were making millions per year?
Are they asking them to give up bonuses FOREVER? I don’t think so.
This year. These bonuses. Paid with taxpayer dollars. That they don’t deserve. Because they FUCKED UP.
Rich folks don’t wanna pay taxes… but they whine like the earth is coming to an end because rich fuckups aren’t going to get paid bonuses with taxpayer dollars.
GIVE THE BONUSES BACK FUCKUPS … no need for tax… problem solved.
Go live with your parents of kids for a year or two and see how it feels.
March 20th, 2009 at 4:31 pm
ottovbvs Says:
March 20th, 2009 at 4:01 pm
call me ahab Says:
March 20th, 2009 at 3:43 pm
……Actually Ahab if you’ll look at my postings you’ll see I’m constantly pointing out the structural flaws in US society and it’s obsession with all kinds of simplistic myths about itself and others…..however I always stick closely to reality and try to avoid over generalizations and judgements based on emotion rather than facts…..You guys are actually a bit addictive…..quite a few of you are obviously very bright…..but the way you wander off into illogicality, emotion, self contradiction, nihilism, and ill founded extrapolations never fails to surprise me
____
I’ve been the subject of a false accusation by you, with no retraction, and no proof forthcoming – even though you have been invited, repeatedly, to provide some. That’s not “sticking closely to reality.” And since I never did what you accused me of, there can be no “facts” involved (check your last emotional comment to me – again, accusing me of what I had never said). You are all emotion. The way you wander off into character assassination never fails to surprise me.
March 20th, 2009 at 4:32 pm
AGG Says:
March 20th, 2009 at 4:22 pm
……..Now this is a reasonable guy……obviously prefers we get rid of new fangled notions like meritocracy where some guy who grew up on the ss of Chicago can become president or another from Bumf#@$ SC, or pretty close by, can become chairman of the Fed…..Let’s get back to the good old days….
March 20th, 2009 at 4:38 pm
CNBC Sucks,
Thank you sir. You have been one of my teachers in the proper use of homor and irony so I welcome the complement.
It’s too bad tha ottovbvs can’t laugh at himself and ridicule his peers for their high and mighty attitude. I guess he is another closet rigid personality among many out there in elitoland. Do you think he has one of those scrap books with pictures of rallies in germany in the 30s? Who knows. Just kidding otto, dear.
March 20th, 2009 at 4:40 pm
Whoops, I meant humor not homor!
March 20th, 2009 at 4:42 pm
And in what society at whatever time in history have school teachers been paid as much as financial jockeys? — otto.
That might explain our literacy rate.
It also might explain why 47 percent of American adults do not how long it takes for the Earth to go around the Sun.
March 20th, 2009 at 4:42 pm
…..You said this buddy not me:
“Marcus Aurelius Says:
March 20th, 2009 at 1:47 pm
Correction:
If I remember correctly, Arthur Anderson employees and management. The criminality was part of the corporate culture.”
…….If that’s not a blanket condemnation of this business and the people who worked in it I don’t know what is….The case was thrown out on appeal because of misdirection of the jury….If they hadn’t been misdirected maybe they wouldn’t have been found guilty and a 100 year old firm employing 85,000 people, the vast majority of them completely honest, not destroyed on the basis of prejudice…..which I must say you seem to specialize in.
March 20th, 2009 at 4:44 pm
Transor Z Says:
March 20th, 2009 at 4:23 pm
can still…..see period button…..through my gin-induced……stupor……must post……for God and family……rum-runners and slave-traders all……never dip into capital…….NQOSOPD…….blaaaaaargh!
so i am important enough to reply to……They respond therefore I am…..Liddy? I know his second cousin from somewhere……[WE DRINK YOUR MILKSHAKE……Kafka wrote a story about a bug……a name-dropping pseudo intellectual……troll named……….was in Berlin in the early 60s……..once read a Le Carre novel…….no Graham Greene, but, I mean, who is?…….
March 20th, 2009 at 4:47 pm
ottovbvs,
You just don’t get it. If you and I were living in a real meritocracy then you might qualify for doing my garden (as long as it wasn’t organic gardening). That was a tongue in check reference to the plutocratic network of entitlement connections assuring priveledged positions in our social hierarchy through money, bribes and murder. Keep pretending, pal. People who don’t emulate your sophistry are not by definition less educated than you, pal.
March 20th, 2009 at 4:51 pm
mikaeel,
You rock. Don’t give up, don’t ever give up. I totally support you, I can FEEL your determination. Bro, hang in there like you say you are, the fight is 15 rounds, we all want you to WIN. And you can laugh along the way. Ha ha ha.
So it is fucking awesome to see you get back up and dream/move on. For real, you create your own reality. Check out Jane Roberts and ‘The Nature of Personal Reality.’ It’s a little out there, but I swear it’s the next step. It truly is.
Jesus, somebody turn up the radio, Aerosmith’s ‘Dream On’ is playin’.
Peace.
–Vega
March 20th, 2009 at 4:52 pm
to tell you the truth otto I do reject the current society we live in and possibly society itself. It’s indoctrination at best and self immolation at worst- the attainment of something because society values it not because it is something that is truly wanted or valued by the person. One of the best set-ups I’ve ever seen is from the show the Rockford Files- the trailer on the beach- now that’s living- give me the beach- to hell w/the house.
March 20th, 2009 at 5:02 pm
Lets do the torches and pitchfork thing a little – then get back to the point. AIG owes us $170B – how are they going to pay it back?
March 20th, 2009 at 5:21 pm
Wow, I just can’t seem to stop crying for their plight! And the press and executives wonder why the public is demonizing them so much. The AIG CEO and his poor bonus buds might just have something there, when he worries about their safety.
“Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, “for their own political agenda.”
When you work for a company with no moral concern about scamming the public, they damn sure need to be sacrificed.
March 20th, 2009 at 5:25 pm
*Plays the world’s teeny tiniest violin for WS bankers, goes back to working 60-80 hrs a week on PhD for $22k a year, $100k+ post graduation if lucky*
March 20th, 2009 at 5:25 pm
gordo365 Says:
March 20th, 2009 at 5:02 pm
Lets do the torches and pitchfork thing a little – then get back to the point. AIG owes us $170B – how are they going to pay it back?
_______
Cash from them, full investigations into personal and corporate finances for them. I don’t encourage mob rule, but good ol’ accounting proctology and lengthy jail time would serve them right.
March 20th, 2009 at 5:30 pm
ottovbvs Says:
March 20th, 2009 at 4:42 pm
…..You said this buddy not me:
“Marcus Aurelius Says:
March 20th, 2009 at 1:47 pm
Correction:
If I remember correctly, Arthur Anderson employees and management. The criminality was part of the corporate culture.”
…….If that’s not a blanket condemnation of this business and the people who worked in it I don’t know what is….
______
First of all, calm down. Secondly, don’t call me “buddy”. Finally it’s not, and I’ve already explained that. Again: It’s not, because I’m saying it’s not.
I’m done playing Twister with you.
March 20th, 2009 at 5:31 pm
otto, it would be great if our wealthy were old-school, nation-building progressives JD Rockefeller and Junior, AC, or even Morgan or Mellon, but today our rich are blood leeches Larry Kudlow and Voodoo Art Laffer.
Give your riches voluntarily or involuntarily, I care not.
March 20th, 2009 at 5:48 pm
“Our industry has recently seen a tide of negative sentiment rising in Washington regarding compensation,” Pandit wrote. “Of course, some of it is warranted. But I take exception when there is a discussion about spreading the blame to each and every employee in the financial services industry.”
The financial investment industry blew it when they risked all of their employee’s jobs and the crap that hits the fan should hit everyone in the company. Pandit and his ilk put all the financial industry employee’s jobs in jeopardy with their high risk gambling. If the voters had been given a choice and they said buzz off regarding government money, those same employees would probably be out of jobs. Would they rather have that than go through a bonus-free period so that the whole company could recover quickly, become profitable and minimize the impact on the taxpayer? They are all employees of the same company and should have to be a part of what it takes to recover and regain taxpayers confidence.
March 20th, 2009 at 5:55 pm
@CNBC Sucks-
Carnegie at one point, if my memory serves me right was worth 3% of GNP. You can’t compare him to Laffer or Kudlow- that’s a joke. Even Buffet and Gates are sucking wind next to him. That’s like crazy insane amounts of money. But let’s all remember, it was the “robber barrons” that ignited popoulists such as Teddy Roosevelt and led to trust busting. The Federal Government definitely had the last word on that era.
March 20th, 2009 at 6:01 pm
Probably when he sold out US Steel in about 1906 but the record was Rockefeller around 1910 he was worth over 6% of GNP…..He’s arguably the richest man in history….An interesting old cove too….He used to like to go on midnight bike rides with his kids
March 20th, 2009 at 6:04 pm
and thus the break up of Standard Oil
March 20th, 2009 at 6:29 pm
call me ahab Says:
March 20th, 2009 at 6:04 pm
That’s when they calculated that number….Standard Oil was broken up in about 1912 I think….It was all fiction of course…..Rockefeller had effective control of ten or whatever companies instead of just one…. the sum of the parts was probably greater than the whole…..so where more or less is your Rockford trailer(or substitute).
March 20th, 2009 at 7:30 pm
ottovbvs,
Thanks for the kind offer and your words of wisdom but I already have a gardener (she cooks good too), buddy.
I admit sometimes I sound like I have a chip located somewhere on my anatomy. You should be proud of your kid in finance; he must be a chip off the old block. Enjoy next week, pal. I hope your whole family enjoys it too. I’m 100% cash.
You see, it’s easy to dance around and snipe others while avoiding the issue.
March 20th, 2009 at 7:57 pm
otto-
I said that’s the life not that’s my life. Doing the grind in the ‘burbs in DC- kids and whatnot you know- I am a traveling fool though and set out when I can- don’t need much on my end because, as I always tell my kids, make large but live small- will have that trailer some day though- on the ocean.
March 20th, 2009 at 9:45 pm
I’m Only about 60% in my case.
March 20th, 2009 at 11:59 pm
In a time in our future, but not so far away, I’m pretty sure the bonus system that has been allowed to weed up our financial system will be considered another form of corruption akin to bribery.
People talk about thinking outside the box but the current system has proven itself to be rotten to the core. Until we are prepared to root out all of the corruption, I think we are doomed to failure.
March 21st, 2009 at 7:40 am
I’ll be dipped in shit if I give these people another dime to invest. All of ‘em are rotten.
Not another dime.
March 21st, 2009 at 11:28 am
As if it couldn’t get more surreal, we now have this:
“Obama to Weigh Impact of Bonus Tax on Credit Flows, Gibbs Says ” (At Bloomberg.)
Obama is quickly proving how correct Gore Vidal was when he said we have two branches of the same party. The fact that Obama is even considering caving into Wall St. makes me sick. I voted for the guy, and this is what he does?
Meanwhile Bloomberg also reports, with a straight face, that if this tax goes through, Wall St. will lose their “talent.” WTF! First, their “talent” is what got us into this mess, and second, there are now plenty of unemployed bankers willing to be hired, in case the “talent” walks.
Will this nightmare ever end?