Wall Street banks in $70bn staff payout ... 10% of US government bail-out package

[Newsjock]

Source: The Guardian

Financial workers at Wall Street's top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.

Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government's cash has been poured in on the condition that excessive executive pay would be curbed.

... The sums that continue to be spent by Wall Street firms on payroll, payoffs and, most controversially, bonuses appear to bear no relation to the losses incurred by investors in the banks. Shares in Citigroup and Goldman Sachs have declined by more than 45% since the start of the year. Merrill Lynch and Morgan Stanley have fallen by more than 60%. JP MorganChase fell 6.4% and Lehman Brothers has collapsed.

At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank.

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

[UpInArms]

1. color me not surprised

these bottom feeders are going to try to suck every particle off of the host before their parasitic ways are exposed for the crapweasel ways they truly embody

[olddad56]

25. I'm surprised..surprised it was only 10%.

[Occulus]

42. And where oh where have the cheerleaders gone?

All those rank idiots who kept telling us, bluntly, that those of us who didn't "know how it all works" needed to sit down, shut up, and help get the bailout bill passed? All the fools who were telling us that this sort of shit wouldn't happen? All the naive (or worse, perhaps, not naive) shucksters who said the bailout was necessary, and had to be passed now now now dammit, or the sky would fall, reality would collapse, and the stars would go out?

Where the hell are the bailout bill cheerleaders now? I want to rip them a new one, and they're mysteriously silent. Instead, I hear pigs whistling, and look over there- a beggar riding a horse.

By the way, all you con men out there- WE TOLD YOU JUST SO.

Damn, that felt good.

[Nihil]

46. ...

I suppose this is one way to shut them up ... just a very painful one ...
:shrug:

[NuttyFluffers]

49. pain is an excellent, if dramatic, teacher. and often necessary to the stubborn.

learning must be hard, for what other reason could there be that lessons do not stick?

:shrug:

[sarcasmo]

2. Why is this no surprise. Kick and Rec

[WCGreen]

3. It's sad that a British Paper has to uncover this sorid mess...

[Supersedeas]

47. Wallstreet advertising $$$ control US GOP Media Outlets

[CaliforniaPeggy]

4. It doesn't surprise me at all that the Brits exposed this...

I think their press has a lot more on the ball than ours.

K&R

[Robbien]

5. In their bailout package UK and EU forbade any taxpayer money going to bonuses

Dem. Senator Schumer and Sec. Paulson agreed that the US wouldn't go the way of the Eurozone because they felt we had to pay huge sums of money to the men whose corruption and greed got us into this mess. If we didn't pay them, Schumer and Paulson said, we would be able to keep them.

What? We need to pay the crooks in order that they stay and keep robbing us?

[aquart]

14. Because, of course, there are so many jobs in their field right now.

[dipsydoodle]

27. Note our cyncism too

"At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank."

[free_radical]

44. Not true ...

...check out this video at Fox site http://www.minyanville.com/mvtv/?videoid=551&offset=0

Funny and so true.

[geckosfeet]

6. This. Burns. Me. Up.

[Tandalayo_Scheisskopf]

7. I cannot help but wonder...

If it is time for large and unruly mobs on Wall Street.

[wordpix]

18. how about also

marching on the Injustice Dept. in DC?

[unkachuck]

8. meanwhile....

....some banks are now unwilling to renegotiate on many foreclosures and mortgage interest rates are rising....

....why negotiate with people when we can now steal their money from the treasury?....why keep interest rates reasonable when the federal government is guaranteeing our solvency?....why take a pay-cut when we've a license to steal?

....Congress, I hope you're proud....

[go west young man]

9. Daylight robbery and the American people just stand by and let it happen.

Capitalism my ass. The buddy system is more like it. The rich get richer and the poor get stepped on. All those Republicans who complain about higher taxes need to eat their shorts on this one. Bush and company just gave all their taxes away to a bunch of fat cat yacht owners who deserve to lose everything they own. Alas it's a fucked up world we live in.

[dixiegrrrrl]

17. The Congress stood by and let it happen

The American people were overwhelmingly against it, and Congress admitted to getting
messages 90% against the bailout.
The House listened and voted against the bailout, the Senate scurried to make the bailout happen.

[wordpix]

21. and then the House passed it

[JDPriestly]

10. No way!

This is horrendous. What scandalous greed.

[Hannah Bell]

11. k&r

[whistle]

12. $70bn in bonuses???? WTF bonuses for ripping off consumers and taxpayers

...is Paulson fucking insane?

[natrat]

48. nah , just a crook like the rest of them

[aquart]

13. NO BONUSES FOR BUNGLING!

[trudyco]

15. That's catchy. I like it. No bonuses for bungling! nt

[Indenturedebtor]

16. They should be fined double that amount. Then take the extra 70 bln and put it towards debt relief

nt

[wordpix]

19. what? You're offering a sound solution to the financial meltdown?

The geniuses on Wall St. and Washington won't listen. :banghead:

[aquart]

22. I like that. Punishment for grotesque incompetence and greed.

Never happen in America.

[Indenturedebtor]

35. Yeah "fairness" in Murka only works in one direction I'm afraid :( n/t

[ReadTomPaine]

20. Sickening. n/t

[blossomstar]

23. This is the kind of stuff revolutions were made of.

Does anyone else feel like they've been robbed?

[Waiting For Everyman]

24. K&R

And this isn't redistribution of wealth?

OURS. As usual. The banks steal from homeowners with exhorbitant interest and fees and penalties and forfeiture, and then reward themselves on the taxpayers' tab. But that's not class warfare? And that's not redistribution? And that's not a deficit problem?

LIARS. Continual liars and frauds. 24/7 for 30 years. And on it goes.

[JawJaw]

26. Corporate Socialism Alive & Kicking, It Would Appear..

It's just an obscenity.

[panzerfaust]

28. Ah. The Noble Class - so good to have it back.

Still though, they do seem lacking in the quality of true nobles - for they actually, sort of, are willing to answer a question about their actions:

"Many critics of investment banks have questioned why firms continue to siphon off billions of dollars of bank earnings into bonus pools rather than using the funds to shore up the capital position of the crisis-stricken institutions. One source said: "That's a fair question - and it may well be that by the end of the year the banks start review the situation."

Shocking! If they were truly nobles, they would not care what the peasants ask. At least they save some noble quality and dignity, by not actually promising to "review the situation" where they directly steal 10% of our money that was given to save their banks so that JTP can get a loan to buy a plumbing co (if he ever gets licensed as a plumber that it is).

We are indeed living in the "End Times" - not of superstition, ignorance, and greed, just of democracy.

Fair it is I guess, only right and just that we should tithe our rulers directly.

[machI]

29. Kick

[MadHound]

30. But. . .but. . .but. . .I thought that the bailout was a good thing,

I thought that it was utterly, absolutely, positively imperative that we all stampede over that cliff since Bush screamed FEAR!

We're being fucking conned, the bailout was a con, and frankly every idiot who supported the bailout should apologize for once again being an idiot and allowing Bushboy to scare them stupid and enabling Bush to once more take this country right over a cliff. Have you idiots learned? Do you get the point now? If Bush screams FEAR!, do exactly the opposite of what he's telling you to do. Of course, given that Bushco will be out of office in three months, it's a little fucking late now.

[Poseidan]

31. Bush's last act

Some people are so dumb, while Bush steals their money, they praise his every move.

There is a type of person who doesn't care at all for country or people. They spend their time figuring out how to exploit everyone and everything. To them, Bush is a genius.

[panzerfaust]

32. Sadly, I DOUBT this

after all, we do still have a vote, or at least the appearance of having a vote, and Party (GOP that is) membership is not yet compulsory.

[fasttense]

33. Isn't this a lot like a 3rd world banana republic?

People are starving in the streets, citizens can't afford electricity and water. There is very little commerce aside from shipping out natural resources and a few services catering to the uber wealthy. Yet, somehow the elite few can afford huge mansions, backyard pools, limousines, servants and bodyguards.

Our tax dollars being used to pay billion dollar salaries for the aristocracy that has destroyed the largest consumer market in the history of the world. China, India and Korea combined add up to only a quarter of the market the US use to be before 2002. Yet we are paying with our tax money, the billion dollar bonuses of the idiots who destroyed our markets.

Now that's what I call Republican socialism.

[RadiationTherapy]

34. Thank GAWD it passededed!!

If it hadn't, why, Atlas may have shrugged...or something.

Greed is God...I mean good.

[Buns_of_Fire]

36. We MUST retain the experienced executives!

(So we can try to pull off the same scam in a couple of years.)

[LiberalFighter]

41. They were so experienced that they caused the problem.

[Buns_of_Fire]

45. Exactly my point! It apparently takes EXPERIENCE to run an entire economy into the ground!

Okay, maybe a heaping helping of unbridled greed helps.

I like the suggestion downthread of erecting a guillotine on Wall Street. Put it where that statue of a bull sits now, with an enormous vat of tar and several truckloads of feathers next to it, and I'll chip in for the construction.

[wellst0nev0ter]

37. Only One Response To This Travesty

[go west young man]

38. Check this out on Goldman Sachs from Wikipedia.

The firm is also heavily involved in energy trading, including the oil speculation market, on both a principal and agent basis.<8>

Its sizable profits made during the 2007 Subprime mortgage financial crisis led the New York Times to proclaim that Goldman Sachs is without peer in the world of finance.<9> The firm's viability was later called into question as the crisis intensified in September 2008.

In May 2006, Henry Paulson left the firm to serve as U.S. Treasury Secretary, and Lloyd Blankfein was promoted to Chairman and Chief Executive Officer. Former Goldman employees head the New York Stock Exchange, the World Bank, the U.S. Treasury Department, the White House staff, and firms such as Citigroup and Merrill Lynch.

On September 21st, 2008, Goldman Sachs received Federal Reserve approval to transition from an investment bank to a bank holding company. <10>


As of 2006, Goldman Sachs employed 26,467 people worldwide. It reported earnings of US$9.34 billion and record earnings per share of $19.69.<13> It was reported that the average total compensation per employee in 2006 was US$622,000.<14> However, this number represents the arithmetic mean of total compensation and is highly skewed upwards as several hundred of the top earners command the majority of the Bonus Pools, leaving the median that most employees earn well below this number.<15> In Business Week's recent release of the Best Places to Launch a Career 2008, Goldman Sachs was ranked #4 out of 119 total companies on the list. <9> The current Chief Executive Officer is Lloyd C. Blankfein. The company ranks #1 in Annual Net Income when compared with 86 peers in the Investment Services sector. Blankfein earned a $67.9 million bonus in his first year. He chose to receive "some" cash unlike present United States Secretary of the Treasury Henry Paulson, his predecessor who chose to take his bonus entirely in company stock.



So Paulson made the bad choice of taking his payoff in company stock. No wonder he wants to bail them out so bad.

Link to Lloyd Blankfein salary. http://www.neumann-compensation.com/managers/salary/lloyd-blankfein/

Year Base salary Bonus Total cash Stock Options Comments
2004 USD 600,000 USD 14,995,500 USD 15,595,500 No
2005 USD 600,000 USD 19,120,500 USD 19,720,500 Yes
2006 USD 600,000 USD 27,243,500 USD 27,843,500 Yes
2007 USD 600,000 USD 26,985,474 USD 27,585,474 Yes

Year Company Turnover EBIT Number of employees
2004 Goldman Sachs Group Inc. USD 29,839,000,000 USD 15,564,000,000 21,928
2005 Goldman Sachs Group Inc. USD 43,391,000,000 USD 26,426,000,000 23,862
2006 Goldman Sachs Group Inc. USD 69,353,000,000 USD 46,248,000,000 26,467
2007 Goldman Sachs Group Inc. USD 87,968,000,000 USD 59,585,000,000 30,522


And then this nugget from The NY Times in June 2007. http://www.nytimes.com/2007/06/10/business/yourmoney/10lloyd.html?_r=2&oref=slogin&oref=slogin

But he was not Mr. Conservative over the last five years as he led the charge to reshape Goldman from being a firm focused on its advisory business to one that embraces more risk and more principal transactions — including private equity investing, proprietary trading and using the firm’s own capital to facilitate complex client transactions.
The impetus, Mr. Blankfein says, was the 1999 repeal of the Glass Steagall Act, the Depression-era law that separated investment and commercial banking — and had protected the core business of smaller advisory firms like Goldman from lending behemoths like Citigroup.

“If you take an historical perspective, clients want us to do what clients have always wanted their bankers to do — give good advice and provide them with the financial means with which to be able to act,” he says. “We’ve come full circle, because this is exactly what the Rothschilds or J. P. Morgan the banker were doing in their heyday. What caused an aberration was the Glass Steagall Act.”

Goldman recently closed a $20 billion private equity fund, which means it now controls one of the biggest funds in the world. It runs the second-largest hedge fund group globally, manages the largest mezzanine fund and is expected to announce a $2 billion credit fund, all housed in its asset management division.

One more nugget on Blankfein. This time it's Time Magazine kissing his ass for his risk taking.

We can debate whether these changes have been good for America. Blankfein's predecessor was Treasury Secretary Hank Paulson, and before that, former Treasury boss Bob Rubin. There's little doubt he has been deeply involved in Washington's strategy for keeping the rest of the Street afloat. Once, captains of American industry had great economic influence in Washington. Now it's the investment bankers, with Blankfein leading the charge.

http://www.time.com/time/specials/2007/time100/article/0,28804,1733748_1733758_1735103,00.html

And of course the Bush Administration who scared the American people into the bailout/giveaway is completely tied up with Goldman Sachs as are the Carlyle Group. http://www.independent.co.uk/news/world/americas/goldman-sachs-marches-on-with-bushs-candidate-for-world-bank-451094.html

[dysfunctional press]

39. they'll understand guillotines.

somebody needs to erect one...or a gallows...on wall st.- just as a protest to this crap.

[go west young man]

40. Some great videos of Jim Rogers forecasting what was to come.

http://brasschecktv.com/page/433.html

[HCE SuiGeneris]

43. This just makes me so angry

These fuckers need jail time, not multi-million dollar bonuses. Damnit! :mad: :mad: :mad:

[apnu]

50. This is why ALL the bailouts are stupid.

These people couldn't be trusted with their own company's (and their client's) money, so giving them more money just rewards bad behavior. It like giving a bully a lollipop after he got done beating up your kid. Stupid and offensive. They should be held accountable, yet none of the bailout packages had any tooth at all for holding these crooks responsible.