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Contrary To Rumors, New York Comptroller Sees An Increase In Banker Bonuses In 2011, As Rick's Cabaret Prepares To Add Locations

Tyler Durden's picture





 

One of the more pervasive recent disinformation campaigns, one which has seen the very active media participation of GE-subsidiary CNBC, has been that bonuses on Wall Street are expected to decline on aggregate by 10-20%. After all, Morgan Stanley has gone so far as leaking information to the broader public that employees they may see a 10-30% cut in bonuses: why they would do this makes no sense, as it does nothing but put the bank in a competitive disadvantage vis-a-vis the only commodity on Wall Street: banker "talent." On the other hand, the information makes perfect sense considering that as we recently disclosed, in a Bloomberg poll, over 70% of respondents stated their firm belief that no bankers (of bailed out institutions, which means all of them), should get bonuses this year. Public anger at the banker class is palpable, and nothing is sure to generate spontaneously combustible public non-DA like overhearing  a discussion over who will foot (or, better yet, expense) the $50k Cristal bill. So while the media is distributing stories about the imminent poverty of Wall Street, quietly, and behind the scenes, the banking class could ostensibly pocket one of the biggest bonuses paydays in history. And while the plan may have been working effectively until now, a brand new report just released by the New York City Comptroller (who has absolutely no incentive to overestimate revenue numbers, and is in fact motivated to show as a bleak a financial picture a possible to also get on the taxpayer gravy train) throws some cold water in the face of this clever scheme. To wit, from page 16 of the report: "total compensation in the industry is expected to be up modestly once year-end bonuses are paid." So, bonuses are going to be... up?

The relevant section from the report (the full thing is a very interesting read):

Because the financial sector generates a disproportionate share of its private wages, the city actually experienced a comparatively severe loss of  income during the recession. In 2009, total wages paid to workers in the five boroughs declined 10.8 percent, compared to a 4.6 percent decline in wages nationally. The City’s steeper decline was primarily attributable to declining employment and lower compensation in the financial sector, in which total wages (including salaries and bonuses) declined 24.4 percent. However, the financial sector’s rapid return to profitability reversed that trend, and in the first quarter of 2010 private wages increased by 8.1 percent, greater than the fourth quarter of 2009. During that period, finance sector wages were up by $4.2 billion, or 14.4 percent, reflecting the higher bonus payments made on the basis of 2009 earnings. Excluding the securities sector, private wages rose only 3.6 percent.

Wall Street profits, as measured by the pre-tax net income of the New York Stock Exchange (NYSE) member firms, were a record $61.4 billion in 2009, almost three times the previous record of $21 billion in 2000. It is estimated that the city’s securities industry paid $25.4 billion in cash bonuses during the last quarter of 2009 and first quarter of 2010. The astounding recovery of financial firm profitability in 2009 has been followed by a mixed year in 2010, yet total compensation in the industry is expected to be up modestly once year-end bonuses are paid.

And if today's earlier report that Goldman's prophets are about to receive $111 million in delayed comp in January, is not an indication of how good the times are for a recently bailed out banker class, then the following report will certainly seal it:

Rick’s Cabaret International expects to add four more locations next year.

The company expressed optimism about 2011, and reiterated its goal of making at least one acquisition per quarter.

Rick’s also said that Dallas hosting the Superbowl, in February, will also be a benefit, given its “terrific cluster of seven clubs ready to welcome fans” in the city.

Well, at least one "banker-derivative" job is set to return to its golden age (that, and of course Alex over at SL).

 

 


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Wed, 12/15/2010 - 21:43 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bankers deserve the bonuses because finance stimulates the economy.  Yep yup.

Thu, 12/16/2010 - 06:16 | Link to Comment MarketTruth
MarketTruth's picture

Perhaps more Americans wielding guns and shooting, and hopefully better aim than the most recent incident, will soon be daily headlines? The nearly daily riots in Europe are quite telling. So what is the home address of those US banksters again?

Am not condoning such things, yet would not be surprised if such thing happen within America since the CFTC, SEC and Congress have shown their true colors on who they support.

We The People...

What country ever existed a century and a half without a rebellion? And what country can preserve it's liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to facts, pardon and pacify them. What signify a few lives lost in a century or two? The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. -- Thomas Jefferson

"My reading of history convinces me that most bad government has grown out of too much government." -- Thomas Jefferson

"Those who stand for nothing fall for anything."
-- Alexander Hamilton

Thu, 12/16/2010 - 08:47 | Link to Comment Popo
Popo's picture

It's all fun and games until bankers start getting shot in the face.

History has told this story hundreds of times.  It always ends the same way. 

Enjoy your cake boys.

 

Wed, 12/15/2010 - 21:45 | Link to Comment max2205
max2205's picture

Oh heck. That's his rev tax so he can forecast meeting his budget.

Then he can say we spent more because bonuses fell short. issue more Muni Bonds NY!!!!!

Wed, 12/15/2010 - 21:47 | Link to Comment financeguru500
financeguru500's picture

Something has to be used to boost the national GDP, might as well be bank profits.

Wed, 12/15/2010 - 21:47 | Link to Comment Mitchman
Mitchman's picture

Trickle up economics!

Wed, 12/15/2010 - 22:06 | Link to Comment Kyron95131
Kyron95131's picture

trickle up economics that starts at the top!

stream line baby!

Wed, 12/15/2010 - 21:58 | Link to Comment spinone
spinone's picture

Take the banker's bonuses and use them to buy Christmas presents.

http://www.usatoday.com/news/nation/2010-12-15-1Asantaletters15_ST_N.htm

Wed, 12/15/2010 - 22:01 | Link to Comment Robslob
Robslob's picture

Bankers are truly brilliant...think about it?
1) You get first shot at newly printed dollars before distribution (the scrape)
2) You get huge bonuses from creating havoc
3) You get bailed out for taking bad risk
4) You get bonuses off of that failure
5) Everyone screams about your pay
6) You collect anyway
7) THEN you agree with everybody and say NO ONE should ever make that kind of money ever ever again!

Kind of like Buffet telling everyone else it was time to pay up in higher taxes.

Brilliant these guys

Wed, 12/15/2010 - 22:05 | Link to Comment financeguru500
financeguru500's picture

Its amazing isnt it. Even better is when they blame the public for all the problems. Guys like Spitzer that call out the government get kicked out of office and lose credibility over ridiculous things like prostitution charges.

Wed, 12/15/2010 - 22:11 | Link to Comment penisouraus erecti
penisouraus erecti's picture

+100

Thu, 12/16/2010 - 08:49 | Link to Comment Popo
Popo's picture

You forgot:

 

8)  Then you re-write estate-taxes so that you can pass on your ill-gotten gains to your spoiled kids, insuring a permanent class structure in what was once the land of social mobility.

 

 

Wed, 12/15/2010 - 22:05 | Link to Comment New_Meat
New_Meat's picture

Gotta love the congresscritters killing on the banksta's bonuses, then worrying about municipal taxes being so low.

- Ned

Wed, 12/15/2010 - 22:07 | Link to Comment penisouraus erecti
penisouraus erecti's picture

Maybe the bankers will buy some electronics and help out Best Buy.........and coke......and whatever The U.S. government this week reported a 0.8% rise in November retail sales, yet our country's largest electronics retailer Best Buy just reported third quarter same store sales down 3.3% from one year ago!

Wed, 12/15/2010 - 22:48 | Link to Comment Terminus C
Terminus C's picture

It's because people aren't buying electronics anymore but rather Harry Wangers consumer discretional custom iron gates.

Harry totally covered Best Buy's losses...

Wed, 12/15/2010 - 23:15 | Link to Comment penisouraus erecti
penisouraus erecti's picture

HAHA, so that's why Harry Wanger is so chipper about the economy.

Wed, 12/15/2010 - 22:22 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

To hijack a famous quote........I may not be able to describe an obscene bonus, but I know one when I see it. I don't give a shit if it's 20% below or 10% above last year, by any measure (save the recipients) it's obscene.

Period. Full stop. End of message.

Wed, 12/15/2010 - 22:39 | Link to Comment nedwardkelly
nedwardkelly's picture

You're right. Giving ANY airtime to the discussion about 10%, 20% lower/higher, legitamizes what should simply be considered to be obscene payouts.

Banker bonuses are a symptom, not the disease. People call for eliminating bonuses, instead of addressing the disparities that enable these banks to accumulate the $$ to pay out the bonuses in the first place. If all you do is eliminate teh bonus, the banks will still be making money hand over fist, they'll just find other ways to dispense it.

Fix the system so these banks can't so easily exploit it and the problem of banker bonuses will be solved.

Bah... who am I kidding. Today Obama met with the heads of a bunch of mega nationals, the sorts that pay an effective tax rate < 5%. He's going to them for ideas on how to fix things. We're completely screwed.

Wed, 12/15/2010 - 22:08 | Link to Comment Caviar Emptor
Caviar Emptor's picture

It's the "Trickle me!" economy. 

Wed, 12/15/2010 - 22:10 | Link to Comment Caviar Emptor
Caviar Emptor's picture

This news will sure help to soothe frayed nerves in Euroland. 

My dystopian vision of the evening: Belgium will be the flash point for the next world war as civil war erupts between Flemish and Walloon factions. Europe fractures as Netherlands and Germany back the North, France and UK the South. US and Russia align on opposite sides. Happy New Year. 

Wed, 12/15/2010 - 22:15 | Link to Comment Black Friday
Black Friday's picture

Trickle me Elmo.

Wed, 12/15/2010 - 22:33 | Link to Comment High Plains Drifter
High Plains Drifter's picture

Good grief.  Do tiddy bars do well in depressions? 

Wed, 12/15/2010 - 22:40 | Link to Comment AccreditedEYE
AccreditedEYE's picture

Certainly a bonus pool worthy of those doing "God's work"....  I wonder if their direct line to heaven will help them save their precious pool next year when the next "balance sheet" doesn't materialize.  

Wed, 12/15/2010 - 22:44 | Link to Comment Pure Evil
Pure Evil's picture

Is that UP, as in Viagra up, or maybe the OTC equivalent, Extenze up?

Where exactly do you sign up to become a Wall Street banker?

I'm mean, if your doing GOD's work, then you deserve a bonus that could fill GOD's bank account.

And since GOD created the universe, we know damn well he's got one gargantuan bank account.

Wed, 12/15/2010 - 22:47 | Link to Comment Robslob
Robslob's picture

Fortunately for the rest of us...God will be collecting from these bankers when it is time...Heaven, where bankers work for people!

Wed, 12/15/2010 - 22:47 | Link to Comment Atomizer
Atomizer's picture

In a game of clue, observers need to dissect the layers of onion. One needs to ask, who paid for the bonuses?

  1. How were the monies funneled within the shell company networks?
  2. Who is accountable for the money laundering network operations?
  3. Were the bonuses earned through enterprise growth or earned by the taxpayer in the form of a Government stimulated subsidy?

The rabbit hole is not as deep as you think.

Wed, 12/15/2010 - 22:58 | Link to Comment traderjoe
traderjoe's picture

Explains why the banks drew down loan loss reserves past couple of quarters => profits 'up' = bonuses up.

Wed, 12/15/2010 - 23:20 | Link to Comment samsara
samsara's picture

A real wikileaks in the form of;

Homes of the Stars meets;

Google Maps  meets;

Board of Directors name and address data bank meets;

Child Molester's Website.

So you can click on a company,  Click on a board director's name,  and up pops a street address with driving directions....

 Just so anyone could knock on the door and thank them personally for what they have done for to the country.

just a thought

Wed, 12/15/2010 - 23:52 | Link to Comment ThirdCoastSurfer
ThirdCoastSurfer's picture

What are actors but very talented liars? Are actors not the best and brightest of our society, the most revered, the most talented, the highest paid? Why shouldn't the rest of the lower (SoHo) gilded class (Upper East) then take the cue and use the actor's craft to create a fictional reality for the masses? It sure works for the Polite-burro, I mean Politburo. 

Thu, 12/16/2010 - 00:45 | Link to Comment trav7777
trav7777's picture

so why the hell was this Florida guy popping caps at the school board instead of bankers?

Thu, 12/16/2010 - 02:46 | Link to Comment chindit13
chindit13's picture

Government is more than happy to intervene in the private economy if it serves their purpose (campaign contributions, not actual governing), but get all CAPITALIST if anyone suggests limiting pay or bonuses.

Let us remember that without the taxpayers' unwitting and unwilling assistance, not a single employee of a major bank would be getting salary, never mind a bonus.  They earned nothing, they deserve nothing, unless getting free money and a heads up from the Fed on how to spend it (by CUSIP number) constitutes "talent".

There has been precious little capital raising activity this year, and precious little lending, so the value added to society at large by the self-annointed few couldn't pay for a '72 Chevy Vega.  The danger they represent to society at large, however, by virtue of their size, exceeds that of al Qaeda, Jama'ah Islamiya, Lashkar e Taiba and SPECTRE combined.

So how about this:  100% tax on bonuses at any institution with assets exceeding $500 billion.  Give them an incentive to get smaller so that they eliminate the supposed threat to the system.  I don't care if the government will waste the tax money;  they can light it on fire for all I care.  Tax policy has always had two purposes, one being to raise revenue and the other being to influence certain behaviors.  This would fit the latter.

And what of the argument that the US financial industry will lose "competitiveness"?  Well, yes, if we had no mega-institutions, we would have a Doomsday Gap with some European countries and Japan, because they alone would retain institutions capable of bringing down their entire system.

Well, I don't envy those countries who retain such threats.  Additionally, a group of <$500 billion institutions could easily form a syndicate to underwrite, if needed, just about anything.  The US would lose nothing except for a Sword of Damocles.

The important point is that banks would once again own their losses and the US would begin again to approach a capitalist state.

Since Santa Claus is real, and knows I've been good, I'm hoping to open this present on Christmas morning.

Thu, 12/16/2010 - 11:25 | Link to Comment sumitchh
sumitchh's picture

To reconcile the contradictory assertions, bonus will be down on the sell-side firms since secondary trading volumes and profits have been lower than last year. But on the buy-side, that is hedge funds primarily, bonuses will be up a lot more since most of the funds were long and the market has rallied a lot this year. So net net for NYC comp will be more while firms like MS will still be paying less to their guys.

No conspiracy here on this one.. just a reconciliation of facts

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