Has anyone seen the news this am about the amount of $$$ that has gone to executive bonus's since the TARP funds were released? 33 BILLION DOLLARS. 3 of the largest financial institutions that received huge amts of TARP $$$$ paid out MORE in bonus compensation than revenue they generated from their operations. In other words, they used TARP money for the bonus pay! TARP money is money you and I earned but were forced to give to the govt so they could give it to these financial institutions. This is so outrageous I wonder how long it will be until true anarchy and revolt by the American taxpayer becomes a reality. Oh, didn't Obama create a "compensation czar"???

Anytime the government takes mass amount of the people's money and redistributes that money, waste, looting and incompetence come to mind. I heard that the new program "Cash for Clunkers" is a massive boondoggle. Imagine if the government passes government "Health Care"? Scary...real scary.






"If you think health care is expensive---wait till it is free"

testimony to the phony existence....no responsibility....no accountability...no plan....no expectations....hence when the deliverables are non existent....no problem.

W hat we are seeing is the results when a no experience executive...Obama...tries to do anything...he has no legislation experience and defers to congress....he has no executive/managing experience, has never managed anything, hence he defers to his whiz kid advisors or czars.

He has no intuitive ability to know if what is being done is appropriate or not.

It will be his down fall. Leaders must lead...good, bad or other wise. He defers the responsibility. A back slapping, campaigner. He can win at least once (hopefully).

btk

I can't help but find this thread odd. Don't get me wrong I believe that CEO and Wall Street compensation is totally out of line but that has been happening for years.

In a previous thread on this subject someone posted this in response:

http://www.naplesnews.com/news/2008/...s-its-ivan-an/

It really isn't about the TARP money nor Obama's salary czar.

Originally Posted by cologal

I can't help but find this thread odd. Don't get me wrong I believe that CEO and Wall Street compensation is totally out of line but that has been happening for years.

In a previous thread on this subject someone posted this in response:

http://www.naplesnews.com/news/2008/...s-its-ivan-an/

It really isn't about the TARP money nor Obama's salary czar.

You completely missed the point. The point was (as reported on MSNBC last week), 3 of the largest financial institutions passed out MORE in bonus pay than revenue they generated as a result of business operations. That would be like me running a pizza shop with 100 thousand dollars of gross annual revenues and paying the pizza delivery people 150 thousand in annual bonuses... a feat that is only possible when the gov't pours taxpayers money into these institutions and they then give it away i obscene bonuses. The next tea party is gonna be scary. Tax increases for "the middle clas" have now appeared on the table. OUCH.

First, let me say that I believe that many, many people who work in the financial sector, particularly on Wall Street, are way overpaid. I've been saying that for more than two decades, and I've been retired from banking for one of those two decades.

I've also said here that for the government to think they can outsmart the bonus-driven culture of Wall Street is pure and unadulterated folly. Remember the law that Congress passed to limit executive bonuses in banks to no more than $500,000? How long did it take the banks to simply increase the base salaries of executives by huge amounts to avoid the restriction of the new law? A couple of months?

There's another current story of a guy that works for a subsidiary of Citicorp called Phibro. Phibro is an international commodities trading firm. If you recall, Citi is probably the weakest of the big banks and if they haven't taken more of the TARP money than anyone else, they're close. They are still a vastly undercapitalized, very weak bank.

Anyway, this Phibro employee is an expert in trading oil futures. He has a contract with Phibro that he will be paid a fixed percentage of the gains he produces by trading oil contracts. This year his bonus will be about $100 million. He truly did make Phibro and Citi a huge amount of money. In fact, it's been documented that his trading alone has had a major impact on the periodic escalation of the price of oil and the cost of gasoline. His profit-making activities for Citicorp truly has moved markets, much to the detriment of all the world economies and all of us personally.

But those are not his problems. Trading oil futures is perfectly legal, regardless of the effect on oil and gas prices. And he has a contract that pays him a percentage of the money he earns for his employer. He is very good at what he does and has a contractual right to the bonus money. If the terms of his "deal" with Phibro were to be lessened, there are dozens of other firms that would hire him on the same basis overnight. If he left Phibro/Citi, future monies he might earn for them would be lost, of course.

So, if you were the "bonus czar", what would you do? You might...and I mean only "might"...be able to slow down the payment of the bonus. But there is no question that Phibro has a legal obligation to pay the man. If as czar you dictated that his bonus deal be changed, he'd simply go to work for another firm that never took any TARP money and wasn't under the regulatory control of you, as czar.

What would you do? All this is an example of my assertion that there is no sense in the government attempting to control, regulate or even influence Wall Street. Those guys are way smarter than anyone that works in government and with the lure of huge bonuses, they will have no trouble whatsoever staying two or three steps ahead of the feckless government employees. Even if our government became totally socialist, as many here assert they already are, the financial markets are well-established world wide, so if certain transactions were made illegal here in the U.S., the people who did them could simply move to somewhere else where they have no prohibitions or controls on what they do. A nice, warm place like the Cayman Islands might do nicely.

So again I ask, Mr. Czar--what would you do?

Originally Posted by rshoffer

You completely missed the point. The point was (as reported on MSNBC last week), 3 of the largest financial institutions passed out MORE in bonus pay than revenue they generated as a result of business operations. That would be like me running a pizza shop with 100 thousand dollars of gross annual revenues and paying the pizza delivery people 150 thousand in annual bonuses... a feat that is only possible when the gov't pours taxpayers money into these institutions and they then give it away i obscene bonuses. The next tea party is gonna be scary. Tax increases for "the middle class" have now appeared on the table. OUCH.

CEO compensation and the bonuses paid to Wall Street types are obscene. But they existed before the government bailout and TARP.

Obama will raise taxes on the middle class at his own peril.

Sorry though....not part of the Tea Party crowd.

Originally Posted by cologal

CEO compensation and the bonuses paid to Wall Street types are obscene. But they existed before the government bailout and TARP.

Obama will raise taxes on the middle class at his own peril.

Sorry though....not part of the Tea Party crowd.

It's one thing to pay bonuses from moneys received from the marketplace. It's another thing to pay bonuses from moneys supposedly received from the government to keep the market afloat.

Yep, they are indeed smart dudes, and the ones in politics who bankrolled all of this with taxpayer "contributions" aren't dummies, either. Those folk will receive their bonuses downstream.....

I just don't get it.....Months ago there was a thread about this same subject I, as usual, was in the minority. At that point most in this forum were saying these bonuses were contractual and therefore had to be paid. I pointed out that the UAW workers had a contract which was reworked to help the auto industry so why could that contract be voided but not the Wall Street contracts.

Now its not ok to pay the bonsuses because its out of the TARP funds...it was out of the TARP funds earlier this year?

Bottomline they shouldn't be paid.