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US Banks Brace for Bonus Backlash
As bonus season begins on Wall Street, U.S. banks are bracing for the inevitable public backlash against multimillion dollar executive compensation as the nation struggles to climb out of an economic crisis.
The Wall Street sign is seen outside the New York Stock Exchange, March 26, 2009 file photo. (REUTERS/Chip East) Despite the recession, financial firms had a blockbuster year. For
some chief executives and top producers, they could be getting bonuses
with six, seven or even eight figures, reports CBS News correspondent Jeff Glor.
Service Employees International Union head Andy Stern tells the Financial Times of the bonuses: "They (banks) backed the truck up to Fort Knox in broad daylight. They emptied it out, we rescued them and they get $150 billion in bonuses."
Another union official tells FT that executives were using banks "like ATMs."
According to the Wall Street Journal, banks are telling employees that the bonuses will contain more stocks and less cash in effort to show the public it is sensitive to their anger amid the economic crisis. The employees, in turn, the Journal reports, are concerned that less cash will restrict their abilities to take care of household expenses such as mortgage payments. ($)
"I don't think it's just whining," one person at a Wall Street firm told the Journal. "There are legitimate liquidity issues that people have."
This week, the financial crisis inquiry commission begins hearings with the nation's top bank executives expected to attend. The commission was created by congress to investigate the near-collapse of the financial system," Glor reports.
Former New York Gov. Elior Spitzer blasted U.S. banks, telling CBS' "The Early Show" Monday their profits were built solely on taxpayer-funded bailouts. "They (banks) believe they are entitled to these crazy sums of money," Spitzer said. "It is inequitable, it is wrong."
Of the major investment banks to receive bailout money, Goldman Sachs is likely to get the lion's share of scrutiny thanks to its soaring profits and list of alumni holding key government positions.
One analyst tells the Journal he expects Goldman Sachs to dole out $18 billion in bonuses, a 64 percent increase from 2008.
Goldman Sachs is trying to buffer itself from criticism by considering telling its top-earners they have to donate a certain percentage of its earnings to charity, The New York Times reports. However, the Times reports Goldman employees could make an average of almost $600,000.
Goldman Sachs declined to talk to both the Times and the Journal for their stories.
In any case, White House Economic Adviser Christina Romer fired the administration's latest shot toward Wall Street, saying Sunday that the bonuses were "ridiculous," adding that it will "offend the American people."
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36 Comments so far
Show AllAlfano sez: "As bonus season begins on Wall Street ..."
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"Bonus season" for these guys runs from Jan. 1 through Dec. 31.
Grab yours before this offer expires!
With lines like "the American people are offended" Obama's mouthpiece Chris Romer must be trying out for a part in the remake of CASABLANCA where the authorities are always "shocked" when serial criminal activity continues.
These bonuses clearly are the reward for their responsibility in destroying the middle class. They are the self proclaimed victors before the fight has begun.
New York and Washington DC now have the world's hghest crimes rates. 95% of that crime statistic is white collar and "off the books".
Home owners that are under water might start kidnapping bank CEO's to help make their mortgage payments.
If you can get past the CEOs' bodyguards, armor plated vehicles and fortified homes and offices, payed for with your tax dollars, you might be able to.
Not to mention that any ransom you might get would also be paid for by US taxpayers.
Why should the banks "brace themselves?" What are we going to do to them? Be offended? Ooooh that should teach them a lesson.
Lots of very angry people who have been thinking about other kinds of "lessons".
Ever wonder if Wall Street billionaires look over their shoulders?
"In any case, White House Economic Adviser Christina Romer fired the administration's latest shot toward Wall Street, saying Sunday that the bonuses were ridiculous, adding that it will offend the American people."
And then she added "But'll they get over it."
If they didn't get off on offending the American people, they wouldn't have their jobs.
The banksters will have to care first about what the serfs think.
Fight back..move your savings and other financial business to your local Credit Union...where YOU get the bonuses.
I second Mujeriego's post.
Also, instead of holding Congressional hearings, let's build scaffolding to publicly hang some of these banksters to send a clear message to Wall St. Since we can't depend on our government to take any action because they are so closely tied to Wall St., let the people deliver justice.
"One analyst tells the Journal he expects Goldman Sachs to dole out $18 billion in bonuses, a 64 percent increase from 2008."
How lovely that Goldman employees can enjoy $18 Billion in bonuses while taxpayers are helping them build a new skyscraper in New York. Life is just wonderful for those who do "God's Work":(http://shockedinvestor.blogspot.com/2009/12/goldman-sachs-build-new-headquarters-in.html)
"Off with their heads!"
Off with their heads? Nahhhh Too painless.
I think they should all get Water Boarded for a good month!!
This is an act of out right treason!!
Water Board Wall Street and all of those who looked the other way knowing that all language in the Bail Out bill that would interfere with these Bonuses would be removed!!!
Water Board Wall Street!!
What? It's just like frat hazing anyway right? RIGHT?!!!
I understand sadism but I do not practice it. I care not how they meet their end as long as they meet it.Quick and painless is fine with me.
But. To do nothing surely is masochistic.
They are holding all the cards. We all watched them deal themselves the only winning hand and nobody said a word.
Not the congress, not the president, not the supreme court.
We are on our own.
The cards are abstract human made inventions that have nothing to do with natural law...
Yes, and when we realize the cards are worthless, and find a practical way to avoid using them we will be free from that moment on.
If I supported capital punishment (and I don't), I'd do my damnedest to make sure that the TARP-grabbing non-lending bankers, and Goldman Sachs, were put up against the wall and shot. The American people are not "offended"; the American people are enraged at being ripped off again by conscienceless greed. Why are we not suing these people for fraud, fiduciary
malfeasance and accountability?
"Why are we not suing these people for fraud, fiduciary
malfeasance and accountability?"
Some states have sued and have gotten money out of these too-big-to-fail bloodsuckers.
“The situation since March provides all the clues that TARP funds found a home in equities. In other words the fix was in." You can read the full article here: (http://www.financialsense.com/fsu/editorials/galakoutis/2010/0111.html). Another good one (http://www.financialsense.com/editorials/fekete/2010/0104.html) talks about pension funds and how they could become a disaster as a result of the way our monetary gurus are handling this crisis.
Former senator Phil Gramm, the SOB who did his very best to bring you the very situation that we are in now, called us all a bunch of whiners. So why is it whining when WE, the people whose shoulders this burden falls on, complain about not being able to afford life in republican America, but when THEY do it, it's NOT whining, it's "real"?
There isn't a privately held bank in this country that shouldn't be nationalized. Take away the power they have, the bankers and financial scum have proven time and time again that they can't be trusted, why do they not go to JAIL? If any one of US had pulled anywhere near what they have done, WE would be in jail, you can bet your butt. They bankrupt the whole country, and walk with the money WE paid to save their sorry asses, and they get BONUSES?
Jail time. ONLY jail time will ever convince me that there is ANY honesty left in the high places of this country. But none of them will get a minute. After all, could YOU throw the jerk who owned your hide into jail? Hardly likely.
Wall Street is probably working on a new financial term to confuse the public about how much they are ripping us off. Remember, these business school types specialize in word games that redefine "compensation" in order to get around the IRS. In the USA, straight income and wages are taxed in a straight forward manner. The drones on Wall Street don't want to admit they are drones so they dream up "bonuses" and pass them off as capital gains to the IRS - WHAT A DEAL! - 15% tax rate!
Now they have another minor problem. Bonuses are getting bad press. Summers did the "sanctity of contracts" bullshit for AIG at Obama's direction. Citbank and others did the "delayed compensation" horse hockey but that didn't fly too well. Orwellian terms are really in these days so they may start saying these million dollar payoffs are really not bonuses; they are "LOANS" to "talented" members of Goldman Sachs et al. Loans are NOT income or compensation so you pay ZERO tax, keep all the money, don't get bad press and can claim your worker drones are toeing the line that those fierce defenders of the people Obama and Geithner are forcing on them.
Then we can all go to sleep again.
Like Emanuel the prize politician says, it's all a matter of fixing the "message" problem.
Right...
GREED IS THE CREED
DEBT IS THE NET
Join a Credit Union.
I just did that myself. You would not believe the sweet deal I got. An interest-bearing checking account with no fees and no minimum. No maintenance fee. A credit and a debit card. $10 of free foreign ATM fees per month. Free travelers checks. 2 free boxes of checks per year. I can't even remember what other perks I get. Man! I switched over from Wachovia were it was nothing, nothing and no more nothing on top of fees for this and that and the other thing after having switched from Bank of America who required a minimum balance of $35,000 (yes, thirty-five thousand - gasp!) or a $40/monthly fee. I highly advice the switch!
"I don't think it's just whining," one person at a Wall Street firm told the Journal.
Oh, well in that case, my heart really bleeds for those executives, trying to figure out how to tell their wives to cut down on the Patrick Cox, wondering whether they can really afford those shiny new golf clubs, possibly having to *gasp* cook meals at home sometimes. What a wretched existence!
Well, it isn't just whining. Some of the bankers are having trouble making the mortgage payment on their third vacation homes, and several are troubled by the tuition for the 3-year-old child at the Ivy prep pre-school. Not to mention the outrageous cost of new furs, since last years' are so 2009. And we would expect them to take stock rather than the 7 figure cash bonus they expect? How heartless!!
It would appear that the only 'change we can believe in' will come if the American people rise up and form a new constitutional convention, as is provided for in our current constitution. A new constitution would necessarily include provisions that restrict corporate size and power, provide for public financing of all state and national political campaigns, strictly limit time in office, and forbid former legislators and their staff from lobbying the legislature for at least 10 years after leaving government service.
Odds of this happening? Estimated at fifty million to one. Odds of our republic surviving past 2025? Probably one in three. Wonder if we could become a province of China? Hmmm.
Please! "They" are not "bracing" for anything! We can't touch them. They will hear the outrage and laugh their asses off all they way to their bank. THEY. DON'T. CARE.
Goldman Sachs is trying to buffer itself from criticism by considering telling its top-earners they have to donate a certain percentage of its earnings to charity
For doing God's work, The Jewish Bald Fund (Lloyd Blankfein, CEO) will receive the majority of charitable donations.
Please don't forget that these 'charitable contributions' are tax deductible.
"White House Economic Adviser Christina Romer fired the administration's latest shot toward Wall Street, saying Sunday that the bonuses were "ridiculous," adding that it will "offend the American people""
She said we are offended. Ooh, that smarts!! Watch out banks! Here somes a mild verbal rebuke accompanied by nothing. I am sure the sociopaths who run the banks will lose sleep over this.
They don't have to "brace" themselves unless we do something, like take our money out of their banks, as mujeriego suggests.
Joe
"Wall Street Employees Grumble over Bonuses
In other economic news, Wall Street firms are preparing to give out billions of dollars in annual bonuses. The average employee at Goldman Sachs is expected to receive a bonus worth nearly $600,000. Many executives will earn far more. At JPMorgan the average bonus is expected to top $450,000. But the Wall Street Journal reports many employees at Goldman Sachs, JPMorgan and other firms are grumbling because much of this year’s bonus will be in stock instead of cash."
http://www.democracynow.org/2010/1/11/headlines#2
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The poor, poor dears...
This disgusting information is not surprising anymore. I guess we must give up on meaningful reform for those in need of adequate pay, honesty, health care, etc. The crooks in the system must be removed. Most recent elections did not do it, and the future looks even worse. Just imagine how bad it will be after another election.
Hit 'em where it hurts! Take your money out of the big banks and put it into community banks and credit unions. Going local makes all the difference. I switched to a credit union from Chase/Wamu in October last year and have closed credit card accounts with HSBC, Cap 1 and Wamu. I now have a higher credit limit with sweetheart terms and I am now getting my debt under control. Screw the big banks!! The "bank local" movement is gaining steam. Be a part of it by voting with your dollars.
Regarding the outrage that we are all experiencing at the blatant arrogant conceit of the big banks, insurance companies and other financial institutions, channel that anger into something productive. Call your state legislators and urge them to reconsider the state's relationship with the big banks that write the bonds and collect the fees from the state. Curbing the money at a legislative level could also have an impact, although it may be a long shot. Get your legislators to push for a moratorium on foreclosures. Stop allowing the banks to evict people from their homes. Start lobbying for campaign reform!!! No more unlimited contributions from big businesses that expect quid pro quo or return on their investment into a politician or political party.
On March 20, get out into the street and protest!!! against the wars, the banksters, for health care and for an end to the corruption in our government that allows such white collar, criminal activity to persist.
There are innumerable ways to strike significant blows against the empire and its beasts. Get creative!!! But be cautious....if civil unrest turns violent, martial law could be imposed or worse.