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View Diary: 10% of $700 billion bailout to cover Wall Street banker pay and bonuses (41 comments)

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  •  Well bonuses are given at year end (1+ / 0-)
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    Magnifico

    Yay, JPMorgan Chase for cutting bonuses 30 percent to 50 percent? Remind me again why they should be getting a bonus at all?

    JP Morgan is a profitable company.  That they are essentially being ordered to take $25 billion in Treasury loans in order to bolster their capital should not preclude them from compensating their employess solely on the grounds that they have been "bailed out" or anything like that.  Yet they are apparently cutting bonuses up to 50% while you claim that "The disparity between the rich and the rest of America just gets grows larger and larger" in the context of this article, as if US bank execs pay is increasing this year at a greater rate than the average worker.  It's very unlikely that that is true if Wall Street execs are getting their bonuses slashed by up to 50% this year.

    And the story about John Mack skipping his bonus is from last year because Morgan Stanley took "a $9.4 billion writedown on debt securities and posted a fourth quarter loss he called 'embarrassing.' "

    Mack skipping his bonus last year is relevant because Morgan Stanley's bonuses, if any, haven't been announced this year to my knowledge.  The last time Mack would have gotten a bonus, Mack didn't take it.  Mack didn't take a bonus long before the Deutsche Bank execs chose to forgo their bonuses, yet you set the foreign bank up as the good guy and rake the American institution over the coals. I'm just trying to bring in a little bit of perspective here.  

    Paulson is letting his former employees at Goldman Sachs keep their ungodly pay and bonuses. Bonus are being slashed, great. The bonuses are outrageous in a year of stupendous losses. Bonuses should be eliminated and the pay should be cut.

    Goldman Sachs is also still a profitable company, so what "stupendous losses" are you referring to when you're talking about Goldman Sachs?

    The remainder of your comment represents a moving of goalposts.  To claim that Paulson and Bernanke have made mistakes is an entirely different thing to claim that they have orchestrated a scheme to loot the taxpayer.

    •  Risky and bad investments now rewarded (1+ / 0-)
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      skymutt

      Was it orchestrated? Only by greed. Who's getting saved now? Those who created the mess.

      As you first noted: "Paulson and Bernanke's record does not square with a portrayal of a gang that is looting the taxpayer."

      So, I think their "mistakes" are part of their record and yes, now that you mention goal posts, I think those "mistakes", especially on Paulson's part, were done intentionally to punt the problem into at least 2009 and therefore run out the clock.

      I think, for example, Paulson pushing for corporate tax cuts last year as part of a scheme to loot.

      “Now, when our economy is in a position of strength, is an opportune time to discuss the business tax system and its impact on workers, investment and the United States’ ability to compete in the world marketplace,” Paulson said in opening remarks for a one-day tax conference hosted by the Treasury.

      That was in July 2007 and the economy was already showing indications of the collapse and the Bush administration had a budget deficit and a growing national debt. If anything, the Bush administration, which Paulson is part of and advocated on behalf of the administration's policies, were and are looting from future generations of Americans. They borrowed money when times were good leaving for nothing when times became bad.

      No money to pay for healthcare or invest in alternative energy when times are good, but hundreds of billions of dollars are found when the markets collapse. Is $700 billion going to be enough?

      Then there was this from McClatchy, Can you trust a Wall Street veteran with a Wall Street bailout?

      At a minimum, there's irony in Paulson being in charge of so large a bailout.

      In the last annual report at Goldman that Paulson signed off on in November 2005, a year in which he received $38 million in compensation, investors were clearly told that the federal government wouldn't be there to save them from bad investments.

      "Goldman Sachs, as a participant in the securities and commodities and futures and options industries, is subject to extensive regulation in the United States and elsewhere," the report said.

      But those regulations are designed to protect the interests of clients in the market, it said. "They are not ... charged with protecting the interest of Goldman Sachs shareholders or creditors," it said.

      That's a different tune from the one Paulson was singing Sunday.

      Now he has a position to bailout the risky investments, he's doing so... on tax payer borrowed dime.

      Those bonds, called mortgage-backed securities, are precisely the bad assets taxpayers will now be buying back from Paulson's colleagues on Wall Street.

      During Paulson's tenure, Goldman was not as big a player in issuing mortgage bonds as two other investment banks that have gone under this year, Bear Stearns and Lehman Brothers.

      But the 2005 annual report shows that Goldman was still a significant player. Its trading division, which included the mortgage bonds and complex financial instruments called derivatives, reported pre-tax earnings of more than $6.2 billion, up sharply from $3.5 billion in 2003.

      These mortgage-backed securities were all but counterfeit money. They are crap and they are at the center of the collapse.

      Bernanke shares a smaller part of the responsibility for the mess — the majority of the blame falls on his predessor, Alan Greenspan.

      •  responses (1+ / 0-)
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        Magnifico

        Was it orchestrated? Only by greed. Who's getting saved now? Those who created the mess.

        This is just rhetoric.  I'd rather get into facts and specifics.  

        So, I think their "mistakes" are part of their record and yes, now that you mention goal posts, I think those "mistakes", especially on Paulson's part, were done intentionally to punt the problem into at least 2009 and therefore run out the clock.

        Paulson has been one of the most active cabinet members in memory, and you say he's "punting" the problem into 2009?  If they weren't doing anything, that would be punting.  The problem will extend into 2009 and probably beyond no matter who was Treasury Secretary; that doesn't mean that the problem is being punted.  

        I think, for example, Paulson pushing for corporate tax cuts last year as part of a scheme to loot.

        Charlie Rangel was pushing for a corporate tax cut last year also.  Was that part of a scheme to loot?  Or was it intended to promote business investment in the US instead of overseas?  

        And as for Goldman Sachs owning mortgage-backed securities during Paulson's tenure, I don't understand what your argument is.  They aren't anything like counterfeit money, and they weren't in 2005.  They were a bad investment to make in 2005 because it turns out that the price of houses fell.  Gold would have been a bad investment in 1981 because the price of gold fell after that, but gold is not like counterfeit money.

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