tagged w/ Wall Street Bonuses
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This past week I learned that I only offer condemnation of our nation, rather than solutions. How do I know? Well, Roseanne Barr told me so. After seeing my article (the Thoroughness of a Good Whore: Buying into what's left of the American Dream), she commented on Twitter that she offers solutions, not only condemnations. In the interest of not upsetting Roseanne, I will begin writing of solutions, or I could whip up a palatable mix of condemnation to go with them.
I'm not an expert, but I do aim for a certain level of professionalism in my writing.
Johnny Argent, Roseanne Barr's partner, lover, hubby (I'm still not sure what the exact connection happens to be), said I was preaching it righteous. Laying it down straight. He retweeted my article, Occupy Wall Street is Dangerous. I tend to think he's a very smart man. He's got long hair and looks like Sir Richard Branson, who once flew to the moon, took a piss, and then rocketed back home. I like Argent, we could easily be good friends.
As I write this, I'm trying hard to avoid condemning things: the current American political situation, the coming austerity measures like those going on in Europe, the Occupy uprisings, the fact that Homeland Security is now turning its twitching, bloodshot eyes toward social media networks, and the fact that 46 million Americans live in poverty, and 50 million don't have health insurance. Just shit like that. I'm staying away from condemnation, because frankly, I don't have any solutions.
When I hear the word solution, I think of eye drops, specifically, and in general I imagine the interactions between molecules and ions. Are they energetically favored or not, I don't know, but interactions just the same. I think of even distribution of molecules. Perhaps Roseanne's an amateur chemist. In that case, she would know more about solutions than I. But let me say, without condemning:
The wealth in our society is not like a solution. It's a mixture, unevenly distributed. I can imagine a dollar bill like a molecule floating within that system we call American society (assuming society exists). I can imagine a solution where the molecules, when stirred and shaken, evenly distribute and create a satisfying balance. Like sugar in water.
I don't have to imagine what an unevenly distributed mixture would look like. I can see it everywhere I go. A thin layer of oil on water. One percent oil, ninety-nine percent water. You can shake and stir and raise a ruckus, but you can't get that oil to evenly distribute throughout. This is not a solution, but a frustrating problem. Someone should condemn it.
More specifically, the American economy and financial prosperity of its citizens. The Rolls Royces and Ferraris on Sunset Blvd, blasting past homeless hillbillies and desperate hungry people. So desperate they would eat dead pigeons falling from the skies and landing in Larry King Square.
More specifically, the billions of bonus dollars on Wall Street, awarded to CEOs and hedge fund managers responsible for our financial crisis, bailed out by our taxpayer dollars, while our government works to defund Planned Parenthood, lay off teachers and firefighters, cut education, slash Medicare, and scale back on nutrition programs for kids.
What can we do? We could get an untainted third party, like a responsible entity with a steady hand, to carefully scrape and gather that one percent that greedily supports and suspends itself atop the ninety-nine, and cast it out to burn up in the pounding sun. Cut it off from the greater system it has tainted and polluted. Then you might be closer to a harmonious solution, rather than a chaotic mixture.
http://www.associatedcontent.com/article/9106815/a_mixture_of_prosperity_roseanne_barr.html?cat=9This past week I learned that I only offer condemnation of our nation, rather than... more
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As if to put the icing on the cake, the investment bank Goldman Sachs is set to shell out another $5 billion in bonuses to employees.
What's more, the bonuses are expected to cover the employees' work for just the first three months of the year, according to the UK Sunday Times.
According to the report, bankers will receive remuneration of about $170,000 per person for the firm's 32,500 employees. Some traders are set to receive millions.
Earlier this year, Goldman's "junior" bankers were told they'd begin receiving salaries that were double their previous takes.
"It's made me rethink everything," a Goldman Sachs employee, "sipping champagne," told the site. "I like the new structure even better. My monthly take home just went way up."
In 2009, Goldman set aside a total of $16.7 billion for employee bonuses, which amounted to about $700,000 per employee. Goldman Sachs CEO Lloyd Blankfein received $9 million in restricted stock.
News of the new bonuses comes as the Securities and Exchange Commission announced that its charging Goldman with civil fraud over a pre-packaged mortgage instrument they say was designed to fail.
Goldman Sachs created the derivative -- called Abacus 2007-AC1 -- in response to a request from a hedge fund manager who predicted that the housing market would collapse and wanted to bet against it. The trader, John Paulson, later earned $3.7 billion for his wager. Goldman's practices cost investors $1 billion, according to the filing.
more at link...As if to put the icing on the cake, the investment bank Goldman Sachs is set to shell... more
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Dean Baker, CEPR
President Obama proposed a tax on the country’s largest banks to help recover the money lost under the TARP program. This tax is a positive step. However, it will not come close to recovering the losses incurred in the bailouts and it will do almost nothing to change the way that the banks do business. For this we will need a larger financial speculation tax.
First, it is necessary to be clear on the extent of the losses incurred in the bailouts of the financial system. The losses in the TARP program are currently pegged at close to $120 billion, most of it due to the bailout of AIG, the giant insurance company. This money was virtually a direct handout to several large banks as the government’s money allowed AIG to make payments to Goldman Sachs and other large banks that would not have been possible if it had fallen into bankruptcy.
But these losses are far from the complete picture with TARP. On the night before Christmas, the Treasury Department lifted the $200 billion cap on the amount that both Fannie Mae and Freddie Mac can draw on the Treasury. They both now have unlimited lines of credit.
No one knows how much their bailouts will eventually cost taxpayers, but it is almost certain that their losses are not entirely attributable to the portfolio that the mortgage giants held on September 7, 2008 when they were put into conservatorship. Much of the losses incurred by Fannie and Freddie are almost certainly due to losses on mortgages they purchased from banks after they went into conservatorship. In other words, Fannie and Freddie were paying too much for the mortgages they purchased from the banks. This is exactly what the TARP was originally supposed to do.
In effect, the Treasury Department has run a version of TARP through Fannie and Freddie. If we want to calculate the money taxpayers lost from the TARP program we should certainly include the money lost bailing out these mortgage giants, which can now exceed $400 billion if events turn out badly. This means that if the point is to recover the money lost in the TARP, the bank tax is likely to fall short by a large margin.
The other key consideration in making the banks pay should be to structure a tax that changes the way the banks do business. This money lost in the TARP program is just a small fraction of what the banks’ greed cost the country. We will likely lose more than $4 trillion in output in this downturn, more than 40 times the projected revenue from the tax over the next decade.
The $9 billion that is projected to be collected each year is equal to about 5 percent of their annual profits and bonuses. It is unlikely to have any noticeable impact on the way they do business. In other words, we can still expect them to be pursuing short-term profits and giving little consideration to long-term investments.
A tax on financial speculation more generally, which would also apply to hedge funds and other financial institutions, would be a far more effective mechanism in changing behavior. It could also raise very substantial revenue. In the United Kingdom, a tax of 0.25 percent on the purchase and sale of shares of stock raises the equivalent of $30 billion annually in the United States relative to the size of its economy. A broadly based transactions tax, that would apply not only to stock, but also to options, futures, credit default swaps and other financial instruments could raise more than $150 billion a year in the United States.
http://www.guardian.co.uk/commentisfree/cifamerica/2010/jan/18/obama-financial-speculation-tax-bailouts
http://vimeo.com/9070205Dean Baker, CEPR
President Obama proposed a tax on the country’s largest... more
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Remuneration for Wall Street bankers set to exceed $65bn-
US investment bank Goldman Sachs is expected to reveal a pay and bonus pot of $20bn (£12.3bn) for 2009 tomorrow, reigniting the row over City pay and taking the total amount being paid out by Wall Street financiers to more than $65bn.
Goldman has made sure to report after its rivals in an attempt to deflect public attention from its profits and bonuses, which are forecast to top more than $600,000 per person on average.Remuneration for Wall Street bankers set to exceed $65bn-
US investment bank Goldman... more
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Former New York Governor Eliot Spitzer made an appearance on The Ed Show Friday. Spitzer weighed in on the scandal surrounding emails from the New York Fed to AIG, telling the bailed insurer to stay quiet about overpaying Wall Street firms with taxpayer money. The emails were sent when current Treasury Secretary Tim Geithner was in charge of the agency.
Headlines about the emails have put the White House on defense. Press Secretary Robert Gibbs defended Geithner Friday, saying that the Treasury secretary was "not involved in any of these emails" and that "these decisions did not raise to his level at the Fed."
Spitzer told Ed that he was skeptical of Gibbs' certainty regarding Geithner's role because the emails have not been released. Neither the House, nor the Senate banking committees have subpoenaed AIG for the messages. Both, according to Spitzer, should be demanding all the emails from AIG, a company that is now majority-owned (77.9 percent) by the U.S. government and in turn, the American people.
Spitzer explained why it's so important for the emails to be released:Former New York Governor Eliot Spitzer made an appearance on The Ed Show Friday.... more
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Last week, over a pre-Christmas dinner, the two of us, along with political strategist Alexis McGill, filmmaker/author Eugene Jarecki, and Nick Penniman of the HuffPost Investigative Fund, began talking about the huge, growing chasm between the fortunes of Wall Street banks and Main Street banks, and started discussing what concrete steps individuals could take to help create a better financial system. Before long, the conversation turned practical, and with some help from friends in the world of bank analysis, a video and website were produced devoted to a simple idea: Move Your Money.
The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, the Big Four banks -- JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo -- all of which took billions in taxpayer money, have cut lending to businesses by $100 billion.
Meanwhile, America's Main Street community banks -- the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of -- are struggling. Many of them have closed down (or been taken over by the FDIC) over the last 12 months. The government policy of protecting the Too Big and Politically Connected to Fail is badly hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so.
We talked about the outrage of big, bailed-out banks turning around and spending millions of dollars on lobbying to gut or kill financial reform -- including "too big to fail" legislation and regulation of the derivatives that played such a huge part in the meltdown. And as we contrasted that with the efforts of local banks to show that you can both be profitable and have a positive impact on the community, an idea took hold: why don't we take our money out of these big banks and put them into community banks? And what, we asked ourselves, would happen if lots of people around America decided to do the same thing? Our money has been used to make the system worse -- what if we used it to make the system better?
Everyone around the table quickly got excited (granted we are an excitable group), and began tossing out suggestions for how to get this idea circulating.
Eugene, the filmmaker among us, remarked that the contrast between the big banks and the community banks we were talking about was very much like the story in the classic Frank Capra film It's a Wonderful Life, where community banker George Bailey helps the people of Bedford Falls escape the grip of the rapacious and predatory banker Mr. Potter.
It was a lightbulb moment. And, unlike the vast majority of dinner conversations, the excitement over this idea didn't end with dessert. It actually led to something -- thanks in great part to Eugene and his remarkable team, who got to work and, in record time, created a brilliant, powerful, and inspiring video playing off the It's a Wonderful Life concept. Watch it below.
http://www.huffingtonpost.com/arianna-huffington/move-your-money-a-new-yea_b_406022.htmlLast week, over a pre-Christmas dinner, the two of us, along with political strategist... more
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Today, hundreds of workers, clergy members, community leaders, and other taxpayers converged on the Washington, D.C. headquarters of Goldman Sachs to demand the bank put an end to multi-billion dollar bonuses, reject the Too Big To Fail Doctrine, and use their anticipated $23 billion bonus pool to help families facing foreclosure. Taxpayers also called on Congress to take immediate action on real financial reform.
“Lloyd Blankfein and Goldman Sachs have rightfully earned the leading role in the story of ‘all that is wrong with Wall Street,’” said George Goehl, Executive Director of the National People’s Action. “Now is the time for them to start making amends for past transgressions. A good first step would include showing a little holiday spirit by directing a significant portion of their estimated $23 billion-dollar bonus pool to a fund to prevent foreclosure. It’s the least they could do.”
Today’s demonstration was the latest in a series of national mobilizations launched last month as 5,000 taxpayers from 20 states converged on the American Bankers Association convention in Chicago to demand Wall Street and big banks stop fighting reforms that would protect our families from the next economic crisis.
http://www.progressivenewsdaily.com/?p=8807Today, hundreds of workers, clergy members, community leaders, and other taxpayers... more
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The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.
DEAR Mr. Liddy,
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:The following is a letter sent on Tuesday by Jake DeSantis, an executive vice... more
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lvp
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added this
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3 years ago
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a tongue in cheek look at the wall street bailout.
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Bonuses will be paltry on Wall Street this year, at least relative to the excesses of past years, but this may be for the best, according to The New York Times. "Critics say bonuses never should have been so big in the first place, because they were based on ephemeral earnings. These people contend that Wall Street's pay structure, in which bonuses are based on short term profits, encouraged employees to act like gamblers at a casino — and let them collect their winnings while the roulette wheel was still spinning." In 2006, Merrill Lynch's head mortgage honcho made a $35 million bonus. That same year, Goldman Sachs paid more than 50 people $20 million each. "Compensation was flawed top to bottom," said Lucian A. Bebchuk, an expert on compensation from Harvard Law School. "The whole organization was responding to distorted incentives."Bonuses will be paltry on Wall Street this year, at least relative to the excesses of... more
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Wall Street executives don't get to where they are with small egos, but this is beyond the pale: John Thain, the CEO of Merrill Lynch, has requested a bonus of as much as $10 million, claiming that his leadership helped the bank to avoid a much larger crisis. Merrill, mind you, was taken over by Bank of America amid concerns that, once Lehman Brothers failed, it would shortly follow. Shareholders approved Merrill's merger with Bank of America on Friday. Merrill's compensation committee has not yet reached a decision on Thain's bonus, but is leaning toward denying him and other executives bonuses this year, according to sources close with the proceedings.Wall Street executives don't get to where they are with small egos, but this is... more
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