This is why I hate bailouts

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maxiep

RIP Dr. Jack
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Now, our Government is sticking its nose where it doesn't belong.

http://news.yahoo.com/s/ap/20090130/ap_on_go_pr_wh/obama_bonuses

Funny, I don't hear any complaints about the cost of redecorating the White House, the cost of keeping the thermostats so high that one can't wear a jacket in the Oval Office, the cost of Air Force One or how much the Waygu beef cost for his soiree.

These people spend their lives working and scarificing toward a goal, work harder than almost anyone else for the sole purpose of earning a bonus (the salary is a pittance on Wall Street) and then get told that you should be in prison by the Vice President.
 
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It should further be noted that President Obama and Vice President Biden were commenting not only on banks that had taken bailout money, but those who had not.
 
Who cares, throw em in the brig like Biden said. The temperature in the White House should be of nobody's concern; however CEO's that are getting hand-outs from Bush's/Government "stimulus" shouldn't be reaping rewards.
 
I read this earlier too.

WTF? So because we bailed out some companies, Obama thinks he has the right to dictate which other companies should get bonuses? Ridiculous.

I got a bonus this year. Apparently I should be going to prison.
 
I read this earlier too.

WTF? So because we bailed out some companies, Obama thinks he has the right to dictate which other companies should get bonuses? Ridiculous.

I got a bonus this year. Apparently I should be going to prison.

I don't think that's entirely what he was saying. I think he was referring to the people that got bailed out and how they were getting bonuses. If that's not the case, then ya, I agree with you guys.
 
I don't think that's entirely what he was saying. I think he was referring to the people that got bailed out and how they were getting bonuses. If that's not the case, then ya, I agree with you guys.

As maxiep said, they were not just commenting on the companies that got bailouts.
 
It should further be noted that President Obama and Vice President Biden were commenting not only on banks that had taken bailout money, but those who had not.

What's the evidence that they were talking about non-bailout banks?

barfo
 
What's the evidence that they were talking about non-bailout banks?

barfo

I made an assumption based on the following paragraph:

The president's comments, made with new Treasury Secretary Timothy Geithner at his side, came in swift response to a New York state comptroller's report saying that employees of the New York financial world garnered an estimated $18.4 billion in bonuses last year.

The NY Comptroller provides this analysis every year for the entire NY financial industry. It would be unusual if this year he only decided to include those firms that had accepted bailouts.
 
I made an assumption based on the following paragraph:



The NY Comptroller provides this analysis every year for the entire NY financial industry. It would be unusual if this year he only decided to include those firms that had accepted bailouts.

That would be unusual, and unlikely.

However, that doesn't mean that Obama has in mind taking actions against banks w/o bailouts. I agree he didn't specify, but he wasn't proposing legislation or executive action here, so specificity isn't really a requirement.

This part suggests that he does draw a distinction between bailout and non-bailout firms:
"And part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility."

barfo
 
That would be unusual, and unlikely.

However, that doesn't mean that Obama has in mind taking actions against banks w/o bailouts. I agree he didn't specify, but he wasn't proposing legislation or executive action here, so specificity isn't really a requirement.

This part suggests that he does draw a distinction between bailout and non-bailout firms:


barfo

I read that quote differently. I believe he sees "Wall Street" as a single unit that is collectively asking for relief. Besides, the bailout didn't really come with preconditions for non-executive level bonuses.

The bailout happened late in the third quarter/early in the fourth. Bonuses are earned thoughout the year, even though they're only paid once a year. Not everyone had a bad year--the losses in investment banks were pretty narrow. Bottom line, I guarantee you that the lion's share of those bonuses went to people who deserved them. In fact, I would offer that the bonuses were lower this year because of the financial crisis.

If bonuses are limited for firms that accepted bailouts, quite quickly they're going to lose their corporate finance and S&T divisions. Those people are like NBA free agents; they'll go where the money is. And the money will be with those firms that aren't limited in the bonuses they can give.
 
You know, I'm not a tax guy or accountant, but every bonus I get is taxed immediately at 28% before it shows up in my account.

28% x $18B = $5.04B in tax revenue. Just from New York financial guy bonuses? That builds you a squadron of submarines. :)

And since Gitmo will be empty soon, let's jail incompetent CEOs rather than Al-Qaeda members. Thanks, VP.

And while we're at it? Steve Francis gets paid 16M this year to sit at home. He should be in jail, too. Jerome James' $5M? Throw him in the brig, too. Stephon Marbury? He's being paid 21M this year (the high end of the compensations packages of those who "stood with Obama"). So, going after a CEO of a multi-national, multi-billion dollar corporation for making the same as an entertainer? That's much closer to the "height of irresponsibility" than anything these BoD's are paying out, IMO.

I can think of a bunch more things I'd wish my Pres and VP were worried about than Wall Street Bonuses.
 
Yes, Steve Franchise DEFINITELY needs to be in the brig! ;)
 
You know, I'm not a tax guy or accountant, but every bonus I get is taxed immediately at 28% before it shows up in my account.

And that is just the Federal tax. When is all said and done, my bonuses gets taxed at 42%.
 
And that is just the Federal tax. When is all said and done, my bonuses gets taxed at 42%.

BB30, you need to stop highlighting your greed. Money for nothing and your chicks for free. When are you going to start sharing the wealth?
 
Exactly! Stomp everyone into the ground that gets in your way! Fuck the world! Your rich! :lol:
 
I read that quote differently. I believe he sees "Wall Street" as a single unit that is collectively asking for relief.

I believe he's not a complete idiot.

Besides, the bailout didn't really come with preconditions for non-executive level bonuses.

True. But if you don't want government sticking its nose into your business, you should run your business in such a way that you don't need a government bailout.

If bonuses are limited for firms that accepted bailouts, quite quickly they're going to lose their corporate finance and S&T divisions. Those people are like NBA free agents; they'll go where the money is. And the money will be with those firms that aren't limited in the bonuses they can give.

Ok by me.

barfo
 
BB30, you need to stop highlighting your greed. Money for nothing and your chicks for free. When are you going to start sharing the wealth?

My bad. I forgot that Uncle Biden told me it is patriotic to pay almost half of my income to the government.
 
I believe he's not a complete idiot.

I believe he doesn't have much of an idea what he's talking about when it comes to finance.

True. But if you don't want government sticking its nose into your business, you should run your business in such a way that you don't need a government bailout.

When the government tells you who to loan to, when the GSE's are allowed to securitize bad debt and when most firms aren't taking bailout money, the Government shouldn't tell you how to conduct your business, especially when they have a really bad track record at doing so.

Ok by me.

barfo

It shouldn't be. These bailouts are meant to be paid back. If you lose your top flight Corp Fin and S&T guys, your businesses aren't going to be as profitable, or may even lose money. If you want to see real losses, take out all the money the vast majority of the I-bankers brought in. Like I said, this collapse was pretty narrow. There were a ton of groups that had pretty good years. I don't know about you, but I'd like to see some of that $700B coming back to the Treasury.
 
My bad. I forgot that Uncle Biden told me it is patriotic to pay almost half of my income to the government.

"Time to chip in, time to be part of the deal, time to be patriotic..."

There's nothing like a lifetime government employee telling us how to run a business.
 
"Time to chip in, time to be part of the deal, time to be patriotic..."

There's nothing like a lifetime government employee telling us how to run a business.


Ahh ain't life grand? yet look who they go running too once they find themselves up shits creek.
 
I think thats great they are doing this. When Wall Street is soo incompetent that they need a bailout then they lose say when it comes to things like bonuses. They obviously cant control themselves
 
I don't read anything there that says Obama plans to limit bonuses on companies that don't ask for a bailout. The numbers thrown out there were to show just how much money is being dished out as bonuses. It is an indusrty where bonuses are a big part of the picture.

Whether they are deserved bonuses or not could be debated round and round. (I heard even the companies that were failing were giving out bonuses.) I feel if a business is run so poorly they need to go to the government and get taxpayer money to survive . . . then hell yes the government gets to say to those businesses . . . stop the bonuses!

In fact I pray to god that the government isn't just printing up cash and dishing it out . . . but tracking exactly where the money goes, how it is being used and that it doesn't all jsut disappear . . again.
 
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I believe he doesn't have much of an idea what he's talking about when it comes to finance.

Well, I believe I heard someone say I know nothing about finance, and I know that every bank didn't get bailed out. And I don't even have a team of economic advisers. So I'm guessing he knows at least as much as I do.

when most firms aren't taking bailout money, the Government shouldn't tell you how to conduct your business, especially when they have a really bad track record at doing so.

I agree the government shouldn't be telling non-bailout firms what they can pay in bonuses. Bailout firms, however, are a different matter. I agree our government isn't well suited to run investment banks. It's too bad that they now have to.

It shouldn't be. These bailouts are meant to be paid back. If you lose your top flight Corp Fin and S&T guys, your businesses aren't going to be as profitable, or may even lose money. If you want to see real losses, take out all the money the vast majority of the I-bankers brought in. Like I said, this collapse was pretty narrow. There were a ton of groups that had pretty good years. I don't know about you, but I'd like to see some of that $700B coming back to the Treasury.

I'm not very optimistic about getting the money back. The way I look at it, we spent that money in order to avoid a sudden collapse of multiple firms at once. I'm willing to let them collapse slowly now rather than having to throw more money down the rathole to keep them afloat. Of course, I'd be happy with any outcome more positive than that.

barfo
 
It seems pretty reasonable to me that companies who receive a portion of the bailout package should not be able to pay their employees bonuses.

It's funny to me that maxiep is all up in arms about this. You would think a guy who goes on and on about meritocracy and accountability would be in full agreement with the idea that if you are part of the reason your company is going down the drain that you shouldn't receive a performance bonus.

Even if you just look at it on the surface, without the bailout money, it's a ridiculous concept to give performance bonuses when your company can't keep it's head above water.

But when you throw in the fact that they are paying bonuses from the taxpayer-backed bailout they received, it goes from ridiculous to disgusting.

-Pop
 
THAT is why you hate bailouts? Funny. I hate bailouts because of the incompetence, greed, and shortsighted profiteering that made them happen in the first place.
 
THAT is why you hate bailouts? Funny. I hate bailouts because of the incompetence, greed, and shortsighted profiteering that made them happen in the first place.

Yep, FNMA and FHLMC should never have been allowed to expand their businesses. Banks should never have been forced to make loans they knew would never get paid back. Rating agencies should have been held responsible. And investors should have better analyzed the securities they were purchasing. You'll get no argument from me.

If you want to teach these firms a lesson, let them fail and rise from the ashes.
 
Yep, FNMA and FHLMC should never have been allowed to expand their businesses. Banks should never have been forced to make loans they knew would never get paid back. Rating agencies should have been held responsible. And investors should have better analyzed the securities they were purchasing. You'll get no argument from me.

If you want to teach these firms a lesson, let them fail and rise from the ashes.

Well the Bush admin helped the banks give loans they knew would never get paid back. By passing the Bankruptcy Abuse Prevention Act it made it so the people who filed for bankruptcy still had to pay back the money and give back everything they borrowed, because of this financial institutions loosened their regulations allowing people who had poor credit or low income to purchase things they knew would never get paid back, but didn't care because the bankruptcy act protected the institution. Before they would have to be careful who they loaned money too, now it doesnt matter, until all those people dont pay them back and they crumble, which is what happened
 
Govt. regulations do absolutely no good. They're enacted after the horse has left the barn, and do nothing to prevent the next disaster. Thank goodness for Sarbannes-Oxley as it saved the day this time around. Oops, no it didn't.
 
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