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NY AG Cuomo To Make Statement Monday On Banker Bonuses
Well now you've done it Lloyd - the New York Attorney General has just gotten involved in banker bonus deliberations.
From Dow Jones:
New York Attorney General Andrew Cuomo is expected to make an announcement Monday concerning Wall Street's 2009 year-end bonus plans.
According to a press advisory, the attorney general will discuss the upcoming Wall Street bonus season on a conference call with reporters at 12 noon, EST, Monday.
Wall Street firms, which are facing criticism over potential record payouts while the U.S. economy continues to struggle, are expected to begin awarding 2009 bonuses to employees in the coming weeks.
The Wall Street Journal reported Monday that banks and securities firms have told their employees to expect a higher percentage of their year-end bonuses to be comprised of stock, rather than cash.
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whooooooooo..statements, hearings. I'm sure the kleptocrats are shaking in their boots.
OMG Biff! Cuomo is going to make a STATEMENT!
I'm sure "a strongly worded letter" will be following presently.
Depends on how those Cuomo for Governor campaign contributions are flowing.
As in, "Go F Yourselves." Strong letter to follow.
Logically, the retail guys should be reducing their bonuses just as a PR move. Huffington Post's "Move your Money" campaign gets good PR every time they pay a seven figure bonus.
The fact that BAC and C aren't making an advertising campaign of reducing bonuses is evidence of the kleptocratic, rather then capitalist, leanings of the banks upper management. Surely shareholders would be rewarded if executive bonuses were used to retain and poach customers, rather then alienate and anger them.
Sadly, the snake bites and the thief steals, logic rarely enters the equation.
I hereby propose that we consider changing Shakespeare's line from Henry VI to:
Oh, we'll get there again, eventually...
http://www.marketoracle.co.uk/Article13721.html
Check out my fairly crappy blog when you get a chance.
http://thetaildoesnotwagthedog.blogspot.com/
It dont matter Tyler !! We are all slaves already !! All this talk aint goin nowhere until we get a revolution and that aint happenin in this country !!
can't wait until someone has enough balls to file a Civil RICO case.
A flea fart in a forest fire.
Jump you fuckers, jump!
And 6 months from now AG Cuomo will be set up with a prostitute or something else that provokes sufficient public outcry to make him resign. Call me cynical.
As for the move your money campaign, while I 100% support it (and avoid TBTF banks like the plague), do banks like Citi and JPM really care if 1000's of individuals move 4 and 5 figure accounts? That's not really where they get their deposit base from, is it?
If you want that campaign to be successful, target nonprofits, charitable trusts, state government funds, and large corporations.
Right now, it's not really hurting them much, but if the campaign gains momentum, it could cause some problems. They need deposits more so than the fees that come with them.
+1
"If you want that campaign to be successful, target nonprofits, charitable trusts, state government funds, and large corporations."
Sounds like the perfect idea for Stage II
Barry Ritholz is the Fred Flintstone of stock market analysis. Charles Biderman is the Albert Einstein of stock market analysis.
You guys can scapegoat banks all you want.... the blame for this whole mess lies at the hands of Greenspan and Bernanke (and the next crisis belongs to them too) followed close second by Barney Frank and anyone who voted for him. The banks were a SYMPTOM. Collectively we all got greedy based on free money by the fed.
These generalizations like--- "we all got greedy.." likely do not apply to 90% of the people in this country.
Where does anyone get off writing this kind of hype? I see it all the time and frankly, it's bullshit.
Take it back. Your credibility demands it.
Off Topic - But Some Might Find Important To the Integrity Of This Site - I Do:
I submitted several examples of a very racict joke which was made by "DARK POOLS OF SOROS", last night. Just one was allowed to post - that's ok.
Mr. Soros' post (see complete thread in George Wasgington's contributing post re: terrorism) and judge the tone for yourself. he was responding to a general call to cut down on the racist barbs.
Anyway, whether it be racist comments towards any group, especially towrds someone who is trying to contribute on this site, it does damage to the credibility to of ZH, and certainly takes away from anything of value that the offender has to say.
My guess is that many people were turned off by the nature of the responses that George Washington received re: his "terrorism" post - I was.
GAME ON.
I'm getting tired of saying this but will do so again.
The issue is really not about bonuses.
The issue is that banks made huge profits (and we know this was engineered) as part of the Fed/Treasury bank recap plan. Even though FASB 157 allows a mark to model (i.e. menagerie) under the current paradigm, one cannot escape the fact that those assets are still worth less than market value and that some portion of those assets (and nobody really knows) will never recover and capital will be needed to cover that loss.
The current profits being made, every nickel, should be retained as additional capital to provision for losses that will be incurred when mis marked assets are recognized for market value.
It is an absolute failure on the part of the US regulatory to not force this matter, IRRESPECTIVE of the allowed FASB 157 menagerie. Once again, a total regulatory failure. I redirect all of you to the same thing going on with the FDIC's delay of capital requirements for off balance sheet items under FASB 166/167. FDIC granted banks a 1.5 yr. delay in provisioning for extra capital to offset 166/167 items.
It is an absolute failure of financial risk management on the part of bank senior management to take money for themselves fully knowing that their balance sheets are still in a major state of weakness. Any prudent standard of banking demands that these profits be retained as capital for future loan loss provisioning.
This is not about bonuses except for the piggish grab by senior bank management. The issue is that these profits should be retained as capital due to the near insolvent nature of many bank's balance sheets.
Deadhead, agreed 10,000%. These aholes cannot get out of their own way. Equity holders will eventually suffer I think.
But who knows.
While you are correct from a regulatory and shareholder perspective, you are wrong from the perspective of self-interested management.
It is safe to assume that management both knows about the balance sheet issues and agrees with you re: their condition. If the condition is as bad asI beleive it to be, there will be no better opportunity than now to gorge on faux revenues to binge on bonuses. Once the balance sheet chickens come home to roost, we wil be talking the potential for losses, negative revenues and negative equity for quite some time. Since the shareholders and regulators of theses companies have continuously allowed management to act simultaneuosly in their own interest (in lieu of being a steward for shareholder value) and in direct contravention to the best interests of the shareholder, the depositor and the country, then it should be expected that management will loot the corporate treasury while the gettin's still good!
Reggie, you and I are on the exact same page as to the banks.
My point about management (yes, you are right, they ARE self interested) as I clearly said, it is a FAILURE of management from a prudent financial point of view to loot the money into their own pocket versus placing it back into capital accounts for loan loss provisioning.
I guess its a matter of semantics. If you were a member of management and you recieved 21 million dollars in bonuses over the last three years, more than you ever recieved - EVER, would you percieve your performance as a failure?
I query, Is it a failure to enrich yourself at the expense of the shareholder and the public in general when regulators and the market fail to economically align the interests of management and the shareholder?
85% compensation in restricted stock with 5 yr cliff vesting and stiff clawback provisions going back through the life cycle of each respective deal on a full recourse basis will solve these issues, no?
Don't get me wrong, I am in total agreement with you from an idealistic perspective, but the reality of the situation is that if management is truly self-interested and they enrich themselves by screwing the public, the taxpayer and the shareholder, then they have effectively succeeded, not failed. It may be moral failure, but morality doesn't really exist on Wall Street, does it?
The taxpayer, regulators, and shareholders are the failures in this case. If they finally decide to put their collective feet down, I would preach a different story, but until then...
Reggie...i fully understand what you say and well said on your part.
I see your argument and yes, it is a failure of the taxpayer, regulators, and shareholders as you say.
You are correct about semantics and by failure of senior mgmt I mean moral failure as well as failure of prudent risk management, failure to manage fiduciary responsibilities. Because mgmt, as you correctly say, is self interested, and I clearly agree, we have a failure based on the areas I have noted.
Again, we are in complete agreement from where I sit. I further want to commend you again for your hard work and analysis on banks (and reits etc) and your willingness to share the info. I also compliment you on using your real name and making your calls in public.
In a world where a phony like Welch, former CEO of GE, can get on TV every 30 seconds and proclaim he is a winner, while setting GE owners up for a massive fall by turning it from a superb maker of stuff, to a failed bank, I guess you are right.
The Accounting firm, the shareholders, and others who should have seen through this ruse to enrich himself at all their expense, are ultimately responsible.
But in a way that is like saying it's not your responsibility if you cheat on your spouse (which Welch did also) since she should have had him followed everywhere, taking the position that no one in her life is to be trusted, and assuming 100% that he would eventually fuck someone else.
While morals and law have nothing to do with it in your view,these sleezeball characters taking full advantage of the 'Law (or absence of it) of the Jungle', is it not at least irresponsible, idiotic, dastardly, self-obsessed,unethical,untrustworthy,ultimately destructive to all what is considered, 'good business'?
And why 5 years? GE took more years than that to feel the 'fool' effects of Jacko's shenanigans while he has been paid a billion dollars for ruining a perfectly good company and his cold black heart, satanic smile, rivals the antics of Rasputin and The Donald.
Deadhead:
The bonuses are the only way to get the sheeple to care, and that fact is why it is important.
Everything you said is correct but far too complicated for the mob, and the mob is required to fix the system.
Media grandstanding
Kabuki theater
Nothing will change
Bigger picture is (as many have already posted here) the large bank profits at the expense of economic recovery for the "citizens"
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4PnUdySIink
From the frontrunning article on bb.
“The question is at what point does the government get so involved in the life of the institution that the public has a right to know?” said Charles Davis, executive director of the National Freedom of Information Coalition at the University of Missouri in Columbia. Davis isn’t involved in the lawsuit.
I have an analogy.
We contract a professional military group, say Blackwater, I'm sorry Xe now (the new element mercenarium was just discovered), a mission to keep a known threat managed. Over the course of years, and decades, Xe mismanages the ongoing threat time and again. In this fantasy world Xe is a non profit, but it is obvious to anyone that the Xe business connections are the ones profiting. (armsmaking complex) by this ongoing endeavor. To wit, and in fact, the armsmakers in this fantasy world are the ones who chartered Xe. So... time keeps going by, mistakes and bungles continue to pile on, and the taxpaying citizens want to know what is going on. Why are we still pursuing a failed initiative? Why are huge bonuses and salaries paid to tertiary partners to the mercenary outfits in the light of continued failure? When push comes to shove, and documentation of internal works are requested, Xe claims whatever sticks. Private company, internal company secrets, etc... However they act in the name of Congress. So when the Congress comes calling Blackwater threatens to let the whole occupied area into a shitstorm, and says we're in this together.
The Fed is a government contractor, and though it is not for profit in nature, it benefits greatly the real monied powers who have our government wrapped around their finger.
Bill Moyer (via Jesse):
"Thanks to taxpayers like you who generously bailed banking from the financial shipwreck it created for itself and for us, by the end of 2009 the industry's compensation pool reached nearly $200 billion. And despite windfall profits, the banks will claim almost $80 billion in tax deductions. And nearly $20 billion of those deductions will go to just three institutions — Morgan Stanley, JP Morgan Chase, and Goldman Sachs.
Ah, yes — Goldman Sachs, that paragon of profit and probity — which bet big on the housing bubble and when it popped — presto! — converted itself from an investment firm into a bank so it could get your bailout money. Now consider this: in 2008, Goldman Sachs paid an effective tax rate of just one percent. I'm not making that up — one percent! — while their CEO Lloyd Blankfein pulled down over $40 million. That's God's work, if you can get it. And, believe me, Wall Street bankers know how to get it."
http://jessescrossroadscafe.blogspot.com/2010/01/financial-coup-detat-wa...