The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said.The outlines of the plan are expected to be unveiled this week in preparation for President Obama's first foreign summit meeting in early April.
Officials said the proposal would seek a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.
Administration Seeks Increase in Oversight of Executive Pay [The New York Times]
Related: After The Jump
"Pray I do not...." (9mb Quicktime)
Posted by guest , Mar 21, 2009 8:55PM
Bam's view of the world
non-athletic = like your in the special olympics
midwestern - cling to guns and bibles
people who care for you and love but are pale - typical white people
Posted by guest , Mar 21, 2009 9:05PM
And JetBlue is ahead of the curve.
http://www.welcomebigwigs.com/
Posted by guest , Mar 21, 2009 9:12PM
http://dealbreaker.com/2008/03/michelle-obama-urges-the-poors.php
This has been in the works for a while, no? Only now there's the opportunity.
Posted by StupidEquityGuy , Mar 21, 2009 9:24PM
Pray that they don't just keep "Changing" the rules again and again...
So now we have public company CEO caps coming in some form... Does this mean that private CEOs have to worry about being next?
Is there going to be a cap and trade of all executive pay?
~SEG
Anyone else noticing the increase in crazy ideas being leaked and trail ballooned for April 2nd?
Posted by guest , Mar 21, 2009 9:26PM
Barack Obama's America, enjoy:
http://www.youtube.com/watch?v=NqNvVN2MXkk&feature=PlayList&p=0169E19104D257DD&playnext=1&playnext_from=PL&index=4
Posted by guest , Mar 21, 2009 9:48PM
Since this wealth redistribution project is in full swing, why not limit pro-athlete compensation, which has obviously become bloated due to the evil of capitalism.
Implementation:
- Fans will to vote on player compensation at the end of the year.
- Player comp should be tied to long term team performance, measured by Win/Loss record and game attendance for the subsequent 3 years. Clawbacks of up to 90% will be permitted.
- Players who pose a systemic risk to a team (e.g., A-Rod, Lebron), would be heavily regulated and be subjected to constant, diligent oversight.
- A new federal agency, the Federal Ballbusting Agency, will be created to implement the plan.
- Existing contracts deemed excessive will be voided by
the government.
Sounds like satire, but who really knows where we are headed.
Posted by guest , Mar 21, 2009 9:56PM
WaMu holding company sues FDIC over bank seizure
http://news.yahoo.com/s/ap/20090321/ap_on_bi_ge/wamu_lawsuit
Those calling for Geithner's removal, beware. His replacement could very well be Sheila Bair. Any hope we have is riding on Geithner acting as the voice of reason in all this. Once Bair is on board, I go from "all bets are off" mode to "sell your house and find another country to live in, NOW" mode.
Posted by guest , Mar 21, 2009 10:01PM
"This deal is getting worse all the time"
&
"I am altering the deal. Pray I don't alter it any further."
EP, you put a bounce in my step.
-LA
Posted by Equity Private , Mar 21, 2009 10:02PM
"You feel you are being treated... unfairly?"
Posted by guest , Mar 21, 2009 10:19PM
3,
I was just going through the comments on that post and I am surprised at where all those very very vocal 'hope and changers' have disappeared of late!
They got their change. The messiah is changing the world. Why are they so quiet all of a sudden?
Posted by guest , Mar 21, 2009 10:22PM
Didn't make it to the bridge the other night (work, dinner...you know; things got in the way), so I might have to take you up on the opiate-induced "farewell." We'll see. God (I'll take any of them) help us all.
-LA
Posted by guest , Mar 21, 2009 10:31PM
The tree of liberty is nourished by the blood of patriots and tyrants. That is its natural manure. --Thomas Jefferson
Posted by guest , Mar 22, 2009 12:09AM
@7,
The WAMU lawsuit against the FDIC will go exactly nowhere, and it will stay there.
Posted by guest , Mar 22, 2009 12:17AM
This sucks.
The question now becomes: what's the eventual outcome?
I think that most of us can agree that it is starting to feel like our self-preservation is being threatened by more than just a salary cap.
Our biggest enemy is the poor with the $60,000 wake-boarding boat, Escalade and $700,000 house that he is WALKING AWAY FROM. These are the freaks most likely to be desperate enough to get violent. There are just as many self-identified liberals and conservatives in that group so political finger pointing isn't going to accomplish much for us.
This is starting to feel like a potential Great Terror situation and I don't know about you, but I don't want my head to wind up in the proverbial wicker basket.
I think it's time for all of us that value our way of life to hit up our friends in DC and start trial ballooning our own ideas, foremost being the reinstatement of debtors prison.
The "walk away freaks" are the single greatest enemy to this country and it's time WE did what we can about them.
Posted by guest , Mar 22, 2009 12:19AM
Kudos to the reader who posted this same article earlier on the Write-Offs section.... Perhaps S/He deserves consideration as a contributing blogger for finding EP material to riff on?
As I posited on the Write-Off section, this is truly first-round posturing. Purely grand-standing. The real story? The Fed is now the "Bad Bank" we've been waiting for, handing out Treasury securities for those "tired, poor and huddled toxic assets, yearning to breathe free".
Posted by guest , Mar 22, 2009 12:25AM
@13, terrific legal analysis. Now, take a step back and realize that the post was not whether the lawsuit goes anywhere.
Posted by guest , Mar 22, 2009 1:47AM
Have they defined who an executive is?
Posted by guest , Mar 22, 2009 2:22AM
@17 - yes. anyone who makes over $73,000 per year.
Posted by guest , Mar 22, 2009 2:47AM
"Responding to Kroft's observation that Wall Street types in the New York area thought the appointments of Geithner and Lawrence Summers to his cabinet indicated he would be more supportive of them, Obama said those people need to get out of town. "They need to spend a little time outside of New York. Because … if you go to North Dakota, or you go to Iowa, or you go to Arkansas, where folks would be thrilled to be making $75,000 a year - without a bonus - then I think they'd get a sense of why people are frustrated."
http://www.cbsnews.com/stories/2009/03/18/60minutes/main4873938.shtml
Posted by guest , Mar 22, 2009 2:50AM
Oh My God
Posted by guest , Mar 22, 2009 2:50AM
"The president acknowledged his need for the support of Wall Street for his banking plan that he will reveal next week. But many of those executives, particularly in New York, need to appreciate populist perspective, too, he said in a discussion of the proposed 90-percent bonus tax for workers making over $250,000 a year at companies receiving large taxpayer bailouts."
http://www.cbsnews.com/stories/2009/03/18/60minutes/main4873938.shtml
What does he have against New York?
Posted by guest , Mar 22, 2009 3:03AM
http://letrememberpubli.blogsspot.com/
Posted by guest , Mar 22, 2009 3:24AM
#22, keep blogging
Posted by guest , Mar 22, 2009 7:32AM
Let's face it, this prick is turning out to be far worse than even his most ardent enemies could have imagined. What a complete douche. @14 - the country is chock full of these morons...we ultimately get what we deserve. Lasting as long as Rome was always a pipe dream but I hoped we would make it a little longer than this.
Posted by guest , Mar 22, 2009 7:38AM
This is not the country that I grew up in.
Posted by guest , Mar 22, 2009 8:09AM
So - the financial industry was given the power to self-regulate.
They looted America, got filthy rich and left a 20 trillion dollar bill.
And now people on this site are freaking over what Obama is going to do.
Hello? The wealth of this country is already gone. Destroyed by moronic bankers. And you reserve your outrage for Obama?
What sad sheep people are.
Posted by guest , Mar 22, 2009 8:11AM
@25
http://www.youtube.com/watch?v=MJRF8xGzvj4
Posted by Seaman Bodine II , Mar 22, 2009 8:28AM
@26
You are a tool. Spend a few days outside your volvo centric suburban douche center, and realize that this country was built up over 300 years by people who held private property. This anchored their wealth, their families, and their communities.
The moment you let fuckstains like Obama dictate new terms, you destroy wealth, families, and communities. Ironic, that a "community organizer" is at the helm.
Of course, I'm a racist, and it's all Bush's fault. In this defining moment.
Posted by guest , Mar 22, 2009 9:13AM
@28 but 300 years ago there was not enough wealth to produce a fuckup of that scale when concentrated in few hands. volvo centric suburban center is to the point, but gulfstream centric mansion center seems to be getting over the top as well, you really can produce the same results with monetary incentives being on a lesser scale.
Posted by guest , Mar 22, 2009 9:19AM
Next stop for anyone inclined towards free will certainly be Chocolate Stalin's gulag. He should be ass fucked with the blunt end of a telephone pole and sent back to Indonesia.
Posted by guest , Mar 22, 2009 9:35AM
One of his goals is to redistribute wealth. We all knew that. He is fulfilling his promise. I'm sure all the wealthy executives, entertainers and athletes who voted for him would completely understand having to live with a $250k family income cap, as it's for the greater common good. No one really deserves to make more than $250k anyway. It's just not fair. Now let's all join hands and sing a song together. Then start planting a community vegetable garden. All will be fine in the end comrade.
Posted by guest , Mar 22, 2009 10:06AM
@29...Obviously things have gotten out of hand, for a myriad reasons. However, if you are suggesting we allow our government to cap compensation at an absolute level, then you are our of your fucking mind.
The financial meltdown is one thing, but if our government takes a severe turn to the socialist left, then we are going to have bigger issues to contend with than bank nationalization, etc.
I agree with @28, our country was built upon the ideals of private property and free market capitalism. Although we are moving further and further away from a free market right now, to infringe on private property i.e. - capping compensation at private companies, or even taxing AIG bonuses at 90% rate is a slap in the face to our core beliefs. Be careful what you wish for...you tread on a very slippery slope.
Posted by guest , Mar 22, 2009 10:39AM
What kind of free market you have if you pay that much to a bunch of dumbasses who produce the shit that you have at AIG now? And with lots of talented people learning DCF instead of something productive because you are paid for being a monkey, so why bother? Turns out its works are shameful when it comes to intertemporal decision making.
Free market works as long as it doesn`t distort the social interactions that happen outside of market, like gratification of those who produce a contribution that lasts far longer than any kind of MBS. The government is a crappy agent to get things back on track when they go awry, but it is the only channel through which the public at large can influence the outcomes. Shame on those with the wealth that they have severely limited other channels.
And yes I agree that capping the salary at an absolute level is a nonsense, but I would consider any kind of legislation that would imply some special treatment for people who can afford to have half a congress at their disposal because as we can see now they may be able to fuck up a system with hundreds of millions of people involved, which to me kinda high a cost of sticking to the free market principles.
Posted by guest , Mar 22, 2009 10:55AM
@33 - the invisible hand would never have given mortgages to the mass of cretins had the government not held a gun to it's head in the name of fairness. The government, driven by populist fuckoff leftists, is the genesis of this whole crisis. Any insinuation that the free market is not the most efficient guarantor of liberty and wealth is a steamy pile of bullshit. Your blather makes me sick. There are so many others like you too...we are truly fucked.
Posted by Gordon Ghetto , Mar 22, 2009 11:00AM
19- You bring up an interesting point. America is such a vast country that we need to make widely known a conversion scale to account for the difference in cost of living between say, North Dakota and New York. A compensation limit of even $250,000 will still seem unfair to many in rural areas, as it would be a large amount in their communities, despite the fact that someone in New York with student loans, a mortgage, etc., could have trouble getting by with that amount.
Posted by guest , Mar 22, 2009 11:07AM
You guys are still blinded by smokescreens. The real scandal is here:
http://www.calculatedriskblog.com/2009/03/geithners-toxic-asset-plan.html
Posted by guest , Mar 22, 2009 11:08AM
It is utterly disturbing that no one - not politicians nor the media - seems to mention or acknowledge that there were multiple bad actors that got us to where we are, most importantly irresponsible borrowing and bad spending habits of "main streeters".
Blaming all of this on Wall Street and limiting compensation in response, while, at the same time, bailing out those borrowers without making them pay a price for their bad acts will create a moral hazard the likes of which we've never had to deal with.
Posted by guest , Mar 22, 2009 11:13AM
@33 -- absolutely agree.
Capping salaries isn't a solution although pay levels for this industry have been built around propellilng a false economy for years...
It's not fair to tar a whole industry for what has happened, but people on the outside just don't really care for the nuance -- it's way beyond that and quite frankly, from the sounds of many who continue to feel entitled to huge bonuses/payouts, a huge waist of time trying to "understand" where they are coming from -- no one really gives a damn about why they think they deserve anything!
The free market is speaking right now -- it's not supposed to be some tidy, predictable thing -- and that upsets a lot of people on Wall Street and Main Street because you cannot divine where it's going and make your money like you could in the past. Oh, it's not that those players have left...they will be back (never really left) or are already back gaining a new edge.
Posted by guest , Mar 22, 2009 11:15AM
This is a war on capital formation, let me be clear on that specific distinction: The ability to form capital is a threat to a socialist order and it gives the individual the power of his/her destiny.
Americans are industrious, entrepreneurial, socially mobile people. But the current Architects in the government are doing everything they can to stifle capital formation and calcify the U.S. into a classist system based on a European model.
Happy Sunday, I'll go back to clinging my Bible now.
Posted by guest , Mar 22, 2009 11:19AM
@37 check your foreclosure rates...you must be a renter.
Posted by guest , Mar 22, 2009 11:20AM
26, 33, whatever...
Financial scandals and screw-ups have been going on since the beginnning of mankind. The South Sea Bubble, the Mississippi Scheme, the Tulip craze, etc. all produced big blow-ups hundreds of years ago and making the move to socialism or just having the government determine what everybody gets paid has never been a successful response in any country, ever.
If you actually looked into what happened instead of just hopping onto "rich = bad" as your explanation, you'd know government intervention, in encouraging sub-prime loans played a decent role in helping to cause this in the first place.
As far as the class warfare rhetoric about us oppressing you or looting the country (um, no), when you work 80-100 hours a week at your job on a regular basis and spent years pulling all-nighters at previous jobs and in school, I'll have more concern over what you think is fair about our salaries and yours.
Posted by guest , Mar 22, 2009 11:21AM
I've got a cabin in Montana...who wants to join me?
Posted by guest , Mar 22, 2009 11:29AM
@39
Some might argue that huge bonuses/payouts to wall street dealers, over inflated salaries, has effectively created trolls that really get in the way of capital working efficiently.
What's a troll? In the simplest sense they would collect a toll to cross the bridge and increase the cost of business//living.
Posted by guest , Mar 22, 2009 11:29AM
@41
USA! USA! USA!
It's a nice day outside. Please spend yours spewing on this blog.
Posted by guest , Mar 22, 2009 11:32AM
"@41
USA! USA! USA!"
----
The Dems use this as a sarcastic response and yet they complain about their patriotism being question.
Posted by guest , Mar 22, 2009 11:33AM
hey guys..what do u think about this? just chat with me --I am an open-mineded single girl and I love sports. I want to end my single life by meeting a guy who likes sports too. Let's mingle at the club " _____^^^^ A g e l e s s M a t e C om ^^^ _____" which is a popular meeting site for couga rs and sex y young men!
Posted by guest , Mar 22, 2009 11:34AM
@33, from 32. I agree with you wholeheartedly that any kind of market that produces risk takers who reap the benefits of the upside, with little or no downside responsibility is utterly insane. This is, in a sense, what I was alluding to earlier. Over recent years we have continued to stray further and further from a true free market (not that it ever truly was a free market). The government, through tax code, played a part in distorting the housing market by increasingly offering incentives to buy a home, among other things.
Now, it seems as though we have no choice but to turn to the government to fix this problem, which they have done a shitty job thus far. However, turning to the government to institute further tax laws to target individuals and to raise trade barriers "to buy american", etc, will only further distort what little of our free market system we have left.
In my own opinion, we would have been better off letting everything fail, deal with the ensuing chaos, and start with somewhat of a clean slate. However, I am still very young and have time to build wealth, hence my opinion as such.
Posted by guest , Mar 22, 2009 11:35AM
44-
I said nothing about the USA, dude.
I just said the guy posting didn't know anything about economics and probably doesn't have much grounds to complain about pay.
That's all.
Posted by guest , Mar 22, 2009 11:44AM
The new "false economy" theory is quickly becoming a cliche used by anyone with an anti-Wall Street agenda.
This type of simplistic glossing over, disguised as complexity and understanding, is fast becoming the norm.
The only thing false about the economy was the asset bubble at its heart. That bubble was created by Main Street as much as Wall St. Last I checked, "free market" did not mean Wall St exclusively.
We need to identify the mistakes and rectify them without otherwise destroying our system. Attitudes like "What kind of free market you have if you pay that much to a bunch of dumbasses who produce the shit that you have at AIG now?", see @33, will only assure us further pain.
Yes, AIG is a collosal problem, but how about some thought about what should have been done differently, and how that can be implemented. Here's a start: changing the fundamentals of our capitalist system should not be the first thing to come to mind.
Posted by guest , Mar 22, 2009 11:45AM
#42, wouldn't you need a cabin on a small private island?
Posted by guest , Mar 22, 2009 11:47AM
The funny thing is if Bin Laden had set a nuke off in NYC instead just flying a plane into some buildings we might be in better shape today...
That being the Street's cockroaches and rats would probably have survived...
Posted by guest , Mar 22, 2009 11:47AM
The funny thing is if Bin Laden had set a nuke off in NYC instead just flying a plane into some buildings we might be in better shape today...
That being said the Street's cockroaches and rats would probably have survived...
Posted by guest , Mar 22, 2009 11:48AM
51/52, To yahoo you go. Now, please.
Posted by guest , Mar 22, 2009 11:50AM
43: Oh, capital working inefficiently... So the capial products that Wall Street created for you and every other American to live a fuller life:
1. credit card
2. auto loan
3. home loan
4. student loan
5. etc etc
Is an inefficient use of capital?
Street created the ability for Americans to live a fuller life. But Americans got greedy, got in over their heads, and want to blame someone else, so they blame the dealer.
People are greedy by nature. Everyone wants power upon power... Hobbes has a fair point.
Let me ask you: With all the power given the government, do you think that they will effectively execute their power? No, they will become the same "trolls" that you claim to hate in the financial sector.
Except these trolls will own your health care system - enjoy the IRS, LOVE the Dept of Living Healthy! "Oh, that cancer treatment? And you are... Over 50? Give'em a toe tag... next!"
Posted by guest , Mar 22, 2009 11:54AM
@49
Who was responsible for creating the asset bubble?
Posted by guest , Mar 22, 2009 11:57AM
i am in total agreement that this whole compensation argument is a crock. but, that being said, the financial industry has brought this on themselves. do you think d.c. wants to be doing this? fuck no, they just want to pass earmarks and make the yokels happy back home. big heros.
the problem is not wealth or class warfare, it's that finance fucked up, royally. not just here , but worldwide. nobody would have disputed anything, and in fact no one did when the wheels of commerce moved smoothly. you guys made millions, whatever. who cared.
it isn't about mortgages and housing . if it was just a housing bubble this would have been a minor recession. it was the financial bubble on top of it , dwarfing it , that made the situation so dire.
stop crying about free enterprise. free enterprise went out the window along time ago. SEC rule changes allowing leveraging up created this mess, along with a lot of stupid decisions. you want free enterprise, fine. so....all the banks are insolvent, let's let them fail, bring down the worldwide economy, and then start over, that's free enterprise.
you cry to congress, and you get what you deserve..there is always strings attached, some large enough to hang yourself.
Posted by guest , Mar 22, 2009 11:57AM
@55, Are you kidding me?
Posted by guest , Mar 22, 2009 12:05PM
@57
Sorry to make you have to think...let me give you two choices:
A) Main Street
B) Wall Street
Posted by guest , Mar 22, 2009 12:13PM
And who gave the gun to the government so it could hold it to the head of those bankers? It couldn`t be senior execs that are happily retiring now, right? Because they have no influence on such kind of things...oh wait!
So these are fundamentals of the system? Well to me it seems you gotta reflect on them once again then.
Posted by guest , Mar 22, 2009 12:14PM
58- I'll add in three:
C) the Government
D) all of the above
E) individuals, people who lied on their loan applications, companies that didn't do due diligence, government officials who pressured companies to make loans that they never used to make in the past - who certain people now want to exploit to advance their own political agenda by muddying up the water into a fight of "Wall Street" vs. "Main Street"
Posted by guest , Mar 22, 2009 12:16PM
@60 Among the 3, I see only one that had a direct channel of influence over the incentives of others together with a major interest in the outcome, how about you?
Posted by guest , Mar 22, 2009 12:18PM
"@60 Among the 3, I see only one that had a direct channel of influence over the incentives of others together with a major interest in the outcome, how about you?"
Yeah, I do -
"E) individuals, people who lied on their loan applications, companies that didn't do due diligence, government officials who pressured companies to make loans that they never used to make in the past - who certain people now want to exploit to advance their own political agenda by muddying up the water into a fight of "Wall Street" vs. "Main Street"
My guess is we differ...
Posted by guest , Mar 22, 2009 12:19PM
@58,
You are either totally ignorant or have some explaining to do. I'll assume for now that it is the latter. Since you are doing the thinking here for me anyway, please explain how WS, exclusively - and that is the key word here - created the asset bubble.
Predatory lending, securitization, derivatives and the like, you say? Let's be real here. Don't try to boil down a complex matter into something it's not. When a homebuyer signs on the dotted line, he is assigning the asset a value and don't try to take that out of the equation.
Posted by guest , Mar 22, 2009 12:24PM
@62 And how would individuals affect the behaviour of any of streets or government? And what do they have now, abysmal credit rating?
And what was officials` direct interest in the outcome?
Posted by guest , Mar 22, 2009 12:32PM
Maybe the banks and financial firms better hope card check passes, then the workers can form their own unions and collectively bargain for higher wages, free medical care, old style defined benefit pensions, retiree health benefis, job banks so the workers can get paid their normal wage while not working,etc. It has worked for GM and Chrysler, and they are getting billions of taxpayer handouts.
Posted by guest , Mar 22, 2009 12:34PM
"@62 And how would individuals affect the behaviour of any of streets or government?"
Are you kidding?
There wouldn't be these loans or any of this mess, if people didn't take out loans they couldn't afford and, often enough, lie on their loan applications to do it.
"And what was officials` direct interest in the outcome?"
The same ones who are now trying to control every single decision in the entire financial sector. The same ones who complained for years about "red-lining," about poorer people not being able to get loans, then pressured companies to stop this, and now--voila--when those people can't pay back loans, that they never should have taken out in the first place, are running away and trying to deflect blame.
If you guys were enterprising, you could easily include Bush in this group as well as Dodd, Barney Frank, etc. but you're so intent on turning this into a fight of "Wall Street vs. Main Street" and deflecting any blame away from the government that you're even overlooking that.
Posted by guest , Mar 22, 2009 12:39PM
@63 I see, the homeowner was "packaging" the deal and not payng fees to the lender? Who owns the mortgage?
Come on...you mean you aren't capable of synthesizing facts or it just doesn't suit you in this case.
Posted by guest , Mar 22, 2009 12:39PM
@49
"...changing the fundamentals of our capitalist system should not be the first thing to come to mind."
No, you are right, bankruptcy is the first thing that comes to mind. But, back in September, the financial brain trust (a.k.a. the best and the brightest talent) ran to D.C. to get a bailout because the sky was falling. What is happening now is Wall Street's fault since they lobbied for it to happen in September. They just didn't think it through.
Posted by guest , Mar 22, 2009 12:48PM
@65
"Maybe the banks and financial firms better hope card check passes, then the workers can form their own unions..."
I know, it is hilarious. The government is being the most capitalistic right now - it is saying pay back TARP or no bonus. All the Wall Street people are being the most socialistic. They want their guaranteed benefits because they are hard working, not productive. Fucking hilarious.
Posted by guest , Mar 22, 2009 12:49PM
@54
You list important financial innovations that should accrue to the innovators...your posting on this forum probably means you and your organization are not one of them. You are likely in good company though, because the vast majority in the financial industry aren't among them as well.
Trolls do not care about inovation...they like to keep things the way they are.
Posted by guest , Mar 22, 2009 1:00PM
A global savings glut created the housing bubble, halfwits. Why was there a global savings glut? Because shitty third world countries like China, India, ect. don't have transparent equity markets with protections for minority shareholders, so much of the world's savings still goes to places like the U.S. and UK.
Posted by guest , Mar 22, 2009 1:10PM
This it so easy to shift the blame on the homeowners who lied their way to get a loan.
Of course they did, because there were cheap loans available and they could scarcely believe their luck and took full advantage. The worst case for them was a ding to the credit score and then could walk away from their loans. But it was the mortgage originators and the banks who had the most to lose (as it has become clear now).
No one ever talks about how excess leverage due to the multitude of structured financial products was the core problem. If it was only the mortgages which were doing poorly, only the MBSs would have declined in value and the losses would have tolerable. It's all this hard-to-value structured finance crap built on top of the underlying assets which responsible for huge writedowns and why no one trusts a bank's balance sheet.
While I agree that a compensation cap is a stupid and hasty idea which can have LOTS of unintended consequences, blaming "loser" homeowners for this mess
is just irrational.
Posted by guest , Mar 22, 2009 1:13PM
@71 I hope that was sarcastic.
Posted by guest , Mar 22, 2009 1:22PM
The financial meltdown does have one silver lining:
http://biz.yahoo.com/ap/090322/economy_adult_entertainment.html?sec=topStories&pos=1&asset=TBD&ccode=TBD
Posted by guest , Mar 22, 2009 1:29PM
@72, if you would like to get a real idea about how the deleveraging works read john mauldin's "law of unintended consequences". Sorry for any typos I'm on my phone.
Posted by guest , Mar 22, 2009 1:33PM
I pity all those who are justifying this thing thinking that it is only targeted at Wall Street / New York.
Not that I have much sympathy for the ultra liberal 100% Democratic New York. Serves those fuckers good.
Posted by guest , Mar 22, 2009 1:33PM
http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1
Read and cringe.
Posted by guest , Mar 22, 2009 2:22PM
#73 = art school grad
Posted by guest , Mar 22, 2009 2:29PM
There is plenty of blame to go around...it doesn't really change what needs to happen at this time. We need to move on to the task of rebuilding and re-energizing this country.
I may not love Wall Street for our current state but they deserve our help (minus the big bonuses) because the vast majority of them are just like all of us -- families to support and lives to live.
Posted by guest , Mar 22, 2009 2:38PM
There are a whole bunch of whiners on this board. Bootom line is that all these banks came hat in hand to the federal government- the CEOs are all supplicants now and can't dictate terms.
The collective disdain for middle America here is why you're elitist, status conscious losers who wonder why the bouncers won't let them into Marquis without bottle service.
$250,000 a year is a tremendous amount of money in the real world- the place where people actually have real jobs and build products that add value to the economy. Not a bunch of money shufflers and con artists who populate 10021.
-Wharton grad and business owner
Posted by guest , Mar 22, 2009 2:48PM
@42 put that cabin in Texas. At least they'll secede if it gets much worse.
Posted by legal eagle , Mar 22, 2009 2:49PM
80: I think a lot of people are missing the point here, and therefore misdirecting the argument. It's absolutely irrelevant whether $250k is a lot of money. What's relevant is that the government is stepping in and dictating a salary cap. There is something fundamentally wrong with this. Now, if there was some provision built into the TARP that said, if you take these loans from gov't you will be subject to X,Y & Z restrictions until the termination of this contract, that would be one thing, but that is not what's going on here. Parties negotiate terms and come to some reasonable meeting point in every contract, BEFORE they sign those contracts. But, entering into a contract with someone and then unilaterally determining, at a later point, that the other party is subject to additional restrictions is mind-blowing.
Posted by guest , Mar 22, 2009 2:56PM
@78 Not even close, moron.
And India doesn't invest in "places like the U.S. and UK". It doesn't have a sovereign wealth fund and doesn't bankroll your debt. If anything, yield seeking junkies like your brethren (assuming you are even peripherally related to finance) were pouring billions into the Indian economy pumping up asset values everywhere.
Posted by guest , Mar 22, 2009 2:58PM
@82
You are thinking of contracts between private entities. The government is not a private entity. If it wants to draft you, it can. Why is it mind-blowing to realize that the entity that writes the rules can change them? Grow up.
Posted by guest , Mar 22, 2009 3:00PM
"Bootom line is that all these banks came hat in hand to the federal government- the CEOs are all supplicants now and can't dictate terms."
---
No, they didn't all come in hat in hand.
Some came in hat in hand. Some needed it. Then others were pressured to take help also so the government could 1.) prevent the public from seeing which banks were on the brink and having their business affected, and 2.) because the banks that did receive help could get a competitive advantage by the extra infusion of capital, whether the other banks actually originally received help or not.
---
"$250,000 a year is a tremendous amount of money in the real world- "
---
That's fascinating. When I get a job offer for above 250k, and have now been forced to have my pay limited to 250k, I'm going to do exactly what you'd do when you receive a better job offer. Leave.
That may be easier said than done in this economy, but the time will come and good luck building up those banks and having the government, and you, get your money back when it does.
BTW, you might want to do more research into this - that's 250k per "household." For married people filing separately, it's $125k.
Enjoy thinking that this is going to stop at us and they won't turn to you next.
---
"the place where people actually have real jobs"
---
Where they work half as many hours per week as I do. Spare me your lectures on work.
---
"-Wharton grad and business owner"
---
This only further diminishes my respect for the school.
Posted by guest , Mar 22, 2009 3:06PM
72-
"This it so easy to shift the blame on the homeowners"
Actually, I'd argue it's quite difficult since they, and their friends and family, constitute more votes where the banks (with the beating their taking) are becoming less likely to be a good source of future political contributions.
"No one ever talks about how excess leverage due to the multitude of structured financial products was the core problem."
I'm willing to buy that I'm in a bubble, but from my perspective that's all anybody seems to be talking about. The other groups come in for much less blame because a politician and the media did not get where they are by attacking their electorate and audience.
Posted by guest , Mar 22, 2009 3:07PM
@77
former banker here:
"But before you even finish saying that, they're rolling their eyes, because You Don't Get It."
sounds like a lot of the kooks on this site. we're all fucked.
Posted by guest , Mar 22, 2009 3:08PM
Anyone who didnt see this coming has only been deluding themselves. The moment this subprime crisis blew up and swallowed BSC, LEH, and MER the "golden era" on Wall St died forever. There will be no more "bottles and models" for 26yr olds working at whatever is left of the bulge bracket.
In fact, bulge bracket is a misnomer right now, there is no bulge bracket anymore.
Its time to embrace the fact that Wall St has been permanently changed and so is comp.
Posted by guest , Mar 22, 2009 3:12PM
@83, the world invests fuckloads of money into the US and UK every year notwithstanding our relatively slower growth rates because places like India and China have shit for markets. I'm not saying there isn't some hot money going into India, but not nearly the money that would be going in there if they had their shit together. This is well known, it's not even a controversial statement.
And when did anybody mention sovereign wealth funds, bitch?
Posted by guest , Mar 22, 2009 3:18PM
The Government better double or triple the amount of money they are printing. Given the choice of getting a capped Total Reward of 250,000 or moving to a Private Firm (or starting one)watch the talent leave. Then they can light a fire to the money they have already invested.
Posted by guest , Mar 22, 2009 3:23PM
@80 I am a money shuffler and honest enough to admit you are right. There is nothing free market about receiving 250k+ bonuses for 5 yrs and get bailout money when the shit hits the fan.
Of course the real story for next week will be the new Geithner plan ... Sounds like a money shuffler's wet dream!
Posted by guest , Mar 22, 2009 3:27PM
91-
Really, you're a "money shuffler"...
Is that a line on your resume, or a technical term?
Posted by legal eagle , Mar 22, 2009 3:32PM
90: That's the humor in all of this--the gov't needs the banks to produce revenue to pay back the loans but it's adopting measures that will (probably) ensure that the revenue of those banks will decrease. The greatest asset at a bank is its people because of their connections and book of business. If they take that book elsewhere (whether to a non-TARP institution or to a new firm they create) then the bank revenues go down and the ability for the TARP banks to service their debt decreases.
Fun times contracting with the government ...
Posted by guest , Mar 22, 2009 3:38PM
"Mr Bernanke has argued that America's deficit is the innocent by-product of a saving glut in emerging economies. If the rest of the world saves more than it invests (ie, runs a current-account surplus), then America has to run a deficit. The implication is that America's deficit is more sustainable than generally thought. But this still begs the question of why emerging economies have excess saving when their return on investment is higher than in rich countries.
A paper presented by Raghuram Rajan, chief economist of the IMF, at this year's annual symposium of the Federal Reserve Bank of Kansas City offers a tentative explanation. -->Mr Rajan argues that fast-growing poor countries tend to generate more saving than they can use because of their underdeveloped financial systems (emphasis mine, fuckstain).
Thus when a country experiences rapid productivity growth, consumers save much of their income gains. But the opportunities for transferring those savings into domestic investment through the financial system are limited, so saving typically exceeds investment and the country runs a current-account surplus. This also explains the unexpected finding that emerging economies that rely least on foreign finance tend to enjoy the fastest growth. Faster-growing economies simply generate more domestic saving.
But this means that capital flows to the United States are sustainable only as long as emerging economies' domestic financial systems remain immature and unable to offer the usual range of financial instruments; and such shortcomings have a clear economic cost."
--Economist Article, "A Topsy-Turvy World" Sept 14, 2006
http://www.economist.com/surveys/displaystory.cfm?story_id=7878118
Posted by guest , Mar 22, 2009 3:43PM
I'd be curious to hear opinions on how many couples are going to fall into the sweet spot where one spouse's income pushes the other spouse's bonus into the red zone.
I'm guessing there are a lot of guys making 150 - 200 base who got a bonus of 50 - 100k. In this range unless the wife's comp is really high she'd be a fool to work.
I doubt this will pass, but I'd be pretty amused to see a couple thousand school teachers and nurses walk off their jobs with no notice.
Posted by guest , Mar 22, 2009 3:44PM
"Real interest rates in the past few years have remained lower for longer than at any other time during the past half-century. -->Despite recent tightening by central banks, average real short-term rates and bond yields in the developed economies are still well below normal levels (see chart 13). Most commentators have concluded that a new era of cheaper money has arrived."
--Economist article, "Unnatural Causes of Debt" Sept 14, 2006
http://www.economist.com/surveys/displaystory.cfm?story_id=E1_SRSRDPR&source=login_payBarrier
Posted by guest , Mar 22, 2009 3:44PM
@89
you just restated what (s)he said.
Posted by guest , Mar 22, 2009 3:59PM
@77 Give that man a medal. Looks like he reads posts from douches on DB:
Verbatim from the article:
When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40.
"But wait a minute," you say to them. "No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what's left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead?"
Posted by guest , Mar 22, 2009 4:01PM
TGFD agrees that America was built on private property; yes it was, but it was not built on douchebag derivative contracts like "naked", 3rd-party CDS contracts, which BTW account for 80% of that rediculous $45 Trillion market for those f'n things. They're what put AIG in the f'n morgue and what $Billions in taxpayer debt are paying for via AIG.
BTW, the premiums paid on "Naked" CDS contracts are what all those "Best & Brightest" revenue generators at AIG-FP collected, and for which they were paid all that $215Mil bonus money recently. It doesn't matter that the things blew up; all that matters is that they generated revenues.
TGFD's solution? Shut the damn CDS market down, and restart it only with legitimate CDS holders, those who actually own the underlying bonds. Cancel the "naked" contracts. There goes 80% of the damned crisis. Right out the window.
We don't need any more help from the "Best and Brightest". They created a mess that they have no clue how to solve.
Hell with them. The solution will come from elsewhere, from others, from the "Less than Brightest".
TGFD is sick of all the financial engineering I've read about for the past year. So is America.
The Guy from Delaware
Proudly among the "Less than Brightest"
Posted by guest , Mar 22, 2009 4:07PM
TGFD,
What's the deal with your signature sign-off? We know this, and need not be reminded each time you click "post comment."
Posted by guest , Mar 22, 2009 4:18PM
@85 spare us your long work week story...you've been so busy for so long...we got your story in Working Girl.
Posted by guest , Mar 22, 2009 4:23PM
guest@#100...
My "signature sign-off" is one of TGFD's many eccentricities.
The Guy from Delaware
p.s. I wouldn't have to sign off all the time if Bess would let TGFD register on DB. It's been almost 2 months since TGFD applied, and all I get when I try to login is...
"Error: Email verification has not yet been passed."
Posted by guest , Mar 22, 2009 4:26PM
I would say the Disneyfication of New York is over. At midnight, your Lexus will turn into a hot pile of rats fighting over a human finger.
-Delaware Destroyer
Posted by guest , Mar 22, 2009 4:35PM
"Why are we not throwing your ass in jail instead?"
-
Because . . . to be thrown in jail, it's generally required someone have committed a crime and, hyperbole aside, we didn't?
Posted by guest , Mar 22, 2009 4:35PM
TGFD,
I trade various futures in a market making role. I have no intention of taking or making delivery. I would like to see what would happen to those makers minus market makers, specs and everyone that is "naked". Why not open the CDS markets to everyone. Better price discovery, don't you think?
Posted by guest , Mar 22, 2009 4:38PM
However, now that you mention it, lying on your loan/mortgage application is a crime, so I'm sure we can expect a waive of arrests in that area any day now.
Posted by guest , Mar 22, 2009 4:39PM
103,
That is one of the redeeming factors now. However, what will we do with all the beret-wearing "comrades" of this new revolution? Frankly, I find the headwear appalling, and soon they'll start smelling...and, gasp, the Frenchness will be all consuming. I'm long chevre d'or, short gillette products (all encompassingly).
Posted by guest , Mar 22, 2009 4:44PM
http://www.youtube.com/watch?v=-Qz74cEN5aw
Are we going to have to drag Stallone out and re-film the ending? Maybe have Rocky take a seat at the Politburo and holding up a picture of Trotsky?
Posted by guest , Mar 22, 2009 4:46PM
I find it funny that ANYONE in this country (even the unemployed) would have the gall to point out '$X is a lot of money'!
In New York state, unemployment is ~ $400+ per WEEK. In China and India they have a BILLION people surviving on <$1 a day.
By those standards anyone earning anything above $10k should have that amount snatched away and redistributed to the more unfortunate.
Posted by guest , Mar 22, 2009 4:47PM
If all salaries are capped at 250k then who will Obama raise taxes on????
Posted by guest , Mar 22, 2009 4:55PM
All your salaries are belong to U.S.
Posted by guest , Mar 22, 2009 5:04PM
#80 - A Wharton grad who didn't get into banking? Were you the "Special Olympics" crew at Wharton? ... What, picking on Special Olympics is wrong at this defining moment? It's Hope and Change people!
Posted by guest , Mar 22, 2009 5:08PM
Yes 109. Why don't you take your vow of poverty and stop posting from your parent's basement. Why don't we just all live on rice and in huts. I hope you will be the first to give up all of the innovations that have ever been made. You should be happy back in your hut worrying about getting polio.
Posted by guest , Mar 22, 2009 5:11PM
its pretty clear the nation completely divided, not sure how this will end up
Posted by guest , Mar 22, 2009 5:17PM
#80,
I would be interested in knowing the kind of business that you run because
1) If you are involved in anything other than growing food or providing shelter and clothing then whatever it is that you do is inconsequential to human survival. Building a website, making telecom equipment are just as inconsequential as you make lending money to be
2) Without the housing asset inflation fueled consumer spending you business wouldn't have been worth crap
I would have expected that Wharton your taught its grads something about how everything is interconnected but apparently not. Or maybe you are one of the affirmative action crew.
And you rail against 'elitist, status conscious' folks and then sign off as a Wharton grad? Do you want your words to carry more weight because you are a Wharton grad? And that is not being 'elitist / status conscious'?
Douchebag.
Posted by guest , Mar 22, 2009 5:28PM
Anyone else checking out Courtney Donohue of Bloomberg weekend TV? Comes across as a smarter Burnett.
Posted by guest , Mar 22, 2009 5:29PM
@115 If all you did was prudently lend money, no one would have cared and all would have been well with the world. Bankers would have been the same plain, stolid, dependable, boring, rich folks they always have been.
But you didn't stop at just lending money, did you? You had to put that money-grubbing mind of yours to work and find "better" (leveraged) uses for it.
-Not a Wharton grad.
Posted by guest , Mar 22, 2009 5:43PM
@117 and the rest... You seem to be missing the point. This does not just apply to banks. It is open to all financial institutions, and may apply to all publicly traded companies. When does it all stop? Does this not kill ALL business in America? Will this also apply to book deals, sports teams and Hollywood? Or is it only for the businesses that the administration does't like. Beyond that, is this constitutional? It seems that a law prof should have more concern about legality rather than populism.
Posted by guest , Mar 22, 2009 5:53PM
@106
Like I said, bring back debtors prison.
When we all move to the Thunderdome, I want the job of chopping the hands off anyone who walked away from a house or defaulted on their sub-prime mortgage.
It probably won't pay much, but H-O-L-Y-F-U-C-K will I enjoy the work!
Posted by guest , Mar 22, 2009 5:58PM
Is it true that in debtors' prison, your cellmate can watch you strump a dump, so most choose to blart a fart instead?
Posted by guest , Mar 22, 2009 6:34PM
Guest@#105...
As TGFD said in my #99 post, only CDS contracts owned by those with actual "skin in that game" will be tradeable.
Those "naked" ones belonging to some fat bastard with a bald head and a cigar, who's looking to get well on the misery of others, should be cancelled.
Price Discovery? The fat bastard doesn't care about price discovery. All he cares about is when will he get an opportunity to make another collateral call.
In your case, commodities? futures trading, my "Less than Brightest" recommendation would be for you to become unemployed. Futures contracts should be traded only by those who are capable of "making or taking delivery" of a commodity. That was the original intent of that market anyway.
I guess we'll see where this whole damn tortured path is going to lead us.
The Guy from Delaware
Proudly among the "Less than Brightest"
p.s. Thanks to #77 for the link. I just read the article. The author sounds like another one of the proud "Less than Brightest". Perhaps you are too?
Posted by guest , Mar 22, 2009 6:35PM
@118
It applies to bonuses at TARP-taking institutions. That's it. I know, it is like horribly unconstitutional to single out a group and tax them for public policy reasons! We have never done this before and it is so unAmerican! But, wait, don't we tax smokers? Why do we single out and punish smokers?
The politicians are trying to obfuscate and evade, but the people are going to make sure that the 90% tax becomes law. Think of it this way, taxes on financial professionals were not high enough in the past since they did not cover the possibility of government having to insure the entire industry against failure. These new tax levels reflect the new premium on that particular policy.
Posted by guest , Mar 22, 2009 6:59PM
I hate to comment on TGFDs posts because they are beyond moronic. But looks like he will not stop harping on the CDS thing.
The only difference between a 'speculator' and an 'investor' is that they have chosen different points on the risk/return continuum.
The current problem in the CDS market is NOT that the wrong people bought CDS (if that even makes sense!) The problem is that the people selling the CDS took disproportionate risk AND did not hedge it out appropriately.
THAT is a problem which will never go away. There will always be folks who will lose in this kind of a game where people are taking opposite sides and the final outcome disproportionately skews to one side. If anything, too much interest in the CDS of an underlying automatically raises the premium which is the market signal to the seller to take note - something is wrong.
Your solution is beyond retarded because in this case you are aggregating all the risk at the market maker. If the speculators disappear from the market then there will be no one to absorb the tremendous amount of risk that such hedging activity will create. And the end result will still be the same, if not worse. Right now you have had more hedge funds go under rather than gain from the collapse because many of them had absorbed the risk.
Your solution is like deadening out all nerves in an area because you have bruised yourself and it hurts. As uncomfortable and undesirable as it may be, pain transmits some very important information.
This collapse was NOT because of the existence of CDS or due to those who purchased it. It was because the sellers of the contract (no matter who they sold to) mispriced risk and did not hedge. And not just CDS, but investors in every possible asset class mispriced risk - that is what happens in every asset bubble.
Looks like whatever circles you go around in have heard of one word - CDS - and have decided to cling onto if for what its worth. Banning CDS sales will NOT prevent those hordes of money managers and insurance cos from buying the shittiest of shitty collateral just because the tranche came labeled 'AAA'.
Humans have gone through periods of irrational exuberance since ancient times. The only check on that attitude is fear of immense loss. The more the government tries to 'regulate' the more it sends the message that that immense loss is not to be feared. However, human greed and irrationality in incurable. Thus we are getting set for either a fascist dictatorial society where basic human emotions are 'controlled and regulated' or even worse swings in fortunes as people take even more risk assuming that the downside will always be protected.
Posted by guest , Mar 22, 2009 7:12PM
110- Once BO taxes 90% of bonuses, Bankers will just return them and the Government gets zero. So his only choice will be to raise the taxes on the rich making 50,000 :), then watch the bitching from the same people who think this is a good idea.
Posted by guest , Mar 22, 2009 7:15PM
@123 There exists a misguided sense of fear about CDS today among the general public because there is a lack of transparency. You cannot get a quote on a CDS unless you had access to a Bloomberg terminal and CDS seems like some devious device used to drive companies to bankruptcy or make directional bets (which is true in some cases).
I think the move towards establishing a central clearinghouse would go a long way in addressing this. If Joe Public were able to get quotes on CDS like he can on stocks/bonds, CDS would cease to be an arcane and devious instrument. Although it's possible that banks would be able to game this because they'll almost certainly have better information, its still a good step to avoid AIG-like situations in the future.
Posted by guest , Mar 22, 2009 7:18PM
"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue socialism is the equal sharing of miseries" Winston Churchill
Perhaps a leader would offer a choice, keep the bonus or the job but you can not keep both.
Posted by guest , Mar 22, 2009 7:21PM
@124
That's fine, return them so that the TARP-taking companies can become profitable. Then, the government will get paid via dividends and rising stock values since it owns stock in all the TARP-taking companies.
Posted by Joseph di Jersey City , Mar 22, 2009 7:50PM
Does anyone remember how Wall Street employees gave so much money to Obama prior to the last election? I do and remember telling many people about his socialistic ACORN background only to be looked at as if I had grown another head. Now the man from ACORN is using the crisis to enact his long held ideology. You get what you pay for suckers.
We are in for an even harder ride than necessary. I have a lack of faith in the rule of law being maintained in the U.S. and will allocate more of my assets to gold that is beyond the reach of the government. I suspect many others will take similar actions, which will have a negative impact on the money supply.
Posted by guest , Mar 22, 2009 7:54PM
Wall Street is a very generous place, they raise tons of money for charities among themselves. It is wrong to single out any one group and it will be challenged in court.
Posted by guest , Mar 22, 2009 8:14PM
Yes, Wall Street is a very generous place and much good has come from the services they provide. Still doesn't mean people should look the other way at all the shit they have done.
At the same time I think most people would welcome hearing about how Wall Street plans to clean it's own mess up.
Posted by guest , Mar 22, 2009 8:20PM
117, You side (which would include folks like TGFD, #127) is brilliant at static analysis.
If the whole leveraged finance business has not existed, then people would not have been able to cash in on their rising asset values (be it homes or stocks) and hence they would have had no money to spend on other things. Di you think that those 10MM iphones and 50+ MM cars were paid for witih pixie-dust?
The whole system benefited from the boom while it lasted. No one said - hey wait, this doesnt seem to be sustainable hence I will not try to push new blackberries and ipods and macs and expensive clothes onto customers because they will go into debt and not be able to pay for it.
Everyone took their cut while it lasted. However, now that the music has stopped - all of a sudden the people who provided the money are the ONLY ones to blame - not the people who borrowed the money or the people who took that borrowed money away from the consumer.
127, every business has costs and revenues (I know, wouldn't make much sense to community organizers.) Banks have sustained certain revenue levels given some employee costs (most division in banks other than structured finance have continued to make money all this while). What makes you think that if you take costs down to 10% then your revenue will remain unaffected?
Posted by guest , Mar 22, 2009 8:20PM
@123 So whom did the government regulate in the past 10 years? And who was actually scared of the result that materialized?
Posted by guest , Mar 22, 2009 8:42PM
Dear Ballers,
If you don't like it, return the bailout funds.
Thanks.
Posted by guest , Mar 22, 2009 8:46PM
132, I am sure that you know that outside of utilities (where the govt sets the ROE) banks are the most regulated industry in this country. Insurance cos are also but that regulation is mostly at the state level. And 3 ratings agencies exist because the government makes them.
Also, had they let the GSEs fail way back in early 2006 instead of papering over the accounting and implicitly sending the message that there ARE institutions (and objectives) too big to fail, people would probably have pulled back from the craziness way earlier and not taken this to the breaking point.
The fact is that the govt implicity sustained this mania because doing otherwise would have laid bare the fact that the growth was illusory and based purely on asset inflation, and not on some structural shift in the economy. To maintain this myth of growth the implicit message sent was - dont worry, we'll take care.
What you are seeing now is the result of that.
Posted by guest , Mar 22, 2009 8:50PM
why not just have a 90% tax rate on all incomes over 10mm? we had top marginal rates of 70-90% from the 1930s to the 1980s - only the top wasn't defined as 250k, it was defined as 1mm - 75mm (in inflation adjusted terms).
it would be nice to see a rod's income capped at 10mm...his wife would be getting a lot less too, lol.
Posted by guest , Mar 22, 2009 8:54PM
@131 - Agreed, what stocks are faring the poorest right now? Companies that make luxury items that were bot by the crowd leveraging their personal finances and/or those also part of the bubble finance positions, like myself.
@ TGFD
Allow the futures market to be only used by those who are actually able to make/take physical delivery?
Actually, it is quite simple to take physical delivery or to make it. Its not overly complex and well within the means of anyone who cares to spend one week to learn how the physical markets work. That said, I believe you mean that only those companies involved in the physical marketing of commodities should be allowed to trade the futures.
That wouldn't be such a bad proposal except the physical commodities players would have more range to manipulate the market to work their ends. Do you believe that they will not run over the market once everyone else is taken out? The ADMS, Cargills, Bunges, Dreyfus's, BPs, Chevrons, etc often have colluding interests. Many of their trades are the same. Give them more power and you allow them to not only manipulate producers through the physical markets, but now the electronic markets as well.
You would be incorrect to think they would do otherwise. Just because one trades the physicals does not mean they do not have the means to influence the market in negative ways as well.
Posted by guest , Mar 22, 2009 9:21PM
The best part is that 50-75% of you loosers who never learned how to do anything productive are going to be up shits creek.
Might I suggest teaching?
Posted by guest , Mar 22, 2009 9:42PM
137 posts of pointing fingers, and not one acknowledgment that the only way this ends well is to let poor decisions result in poor outcomes.
But by all means, my Keynesian friends, continue to tread water.
Posted by guest , Mar 22, 2009 9:43PM
137,
Given that I have an enggineering degree and most of the people working around me also have very good degrees and kicked your a** all through school and college, I think we will do fine. Thanks for the concern.
The bigger question is - what will you do when the consumer has no more money to spend on junk and hence all the jobs artificially generated to create/design/manufacture/market/sell/deliver that junk go away?
Dont worry. We folks will continue working and paying taxes to fund your unemployment.
Posted by guest , Mar 22, 2009 9:47PM
That 100% bonus tax is going to be tough for whoever is being laid off now and suddenly gets vested on all of their deferred comp. from previous years.
Posted by Investorcluzo , Mar 22, 2009 9:54PM
glad I don't work for a tarp fund baby...
can we get a new pr person for the white house? we don't need to see the big O on every network this month. it's like he's got his own version of march madness going and he's applying a full court press (junket). and how about his comment with regard to pay capped at $250k: "bankers need to spend some time outside of new york". will have a hammer and sickle on the flag in no time. I put the blame squarely on mccain for picking palin as his running mate.
Posted by Investorcluzo , Mar 22, 2009 9:59PM
@140 - don't forget, in ny where state/local tax is 14%, you actually end up paying the government to keep your bonus. makes sense to me *sigh*
Posted by guest , Mar 22, 2009 10:04PM
@ 137 ... "loosers" huh.
Hookt on phonics much?
Posted by guest , Mar 22, 2009 10:08PM
141- "glad I don't work for a tarp fund baby..."
Are you still under the illusion that it matters?
All that you need to ask is
1) Do you work (as in are you a net donor instead of net recipient of government funds)?
2) If yes, then do you work for the government?
3) If no for #2 then are you are a member of a union?
If you answered yes, no, no then there is absolutely nothing to be glad about.
I dont know if it is just me but 'Resolution Authority' sound terribly like something from an Ayn Rand novel. So now the government can step in and take over ANY private firm if the Treasury Secretary, President and 2/3 of the Fed believe that the firm poses 'sytematic risk' to the broader economy.
Private property comrades?
Posted by shiphouse , Mar 22, 2009 10:18PM
@137 – What is the point of teaching if all you are doing is teaching a bunch of future teachers? People who make statements such as this are blind and I don’t realize why they are on this Blog to begin with.
Don’t teachers, car salesman, construction workers, etc. realize that if Bankers salaries are being adjusted downwards than so will theirs? What happens to a teacher’s salary if the state and local governments are bankrupt? Unfortunately teachers are going to be let go at alarming rates and class sizes will rise. But wait this won’t happen because municipalities and states will be bailed out as well in the form of federal assistance, tax raises, etc.
In short to the guy who cuts the fucking grass for the county, you better choose your words wisely because your time will come and after all you are paid by the government anyways to begin with.
Posted by guest , Mar 22, 2009 10:19PM
@139 Good luck finding an "enggineering" job after wasting several years of your life designing "models"(aka dreck) or whatever busywork you did. It is not easy to flip a switch and become an engineer again. Unlike finance, getting laid off has a certain stigma attached to it and it means you just weren't good enough in whatever you did earlier.
And I keep hearing a little thing called "outsourcing" whenever someone talks about engineering jobs. I assume you've heard too. So wake up and smell the coffee.
(I hate being a d*ck but since you seem like one, no harm no foul, you can take it)
Posted by guest , Mar 22, 2009 10:20PM
To all of you on this site that are pro Obama after this madness...
Forget incentivizing American productivity b/c European banks will take all the talent.
Forget companies locating here over Europe and elsewhere.
Forget charities who depend on high income earners.
Forget your blaming Bush for every problem of the country.
Forget national security and watch as al qaeda will be set free by Obama from Gitmo
Forget being feared by our enemies, respected by our peers and envied by our equals and hated by the French!
Forget capitalism b/c it is dead and gone with Obama
Oh and when they come for you too, forget your b.s. arguments and excuses b/c your money will be redistributed toward the the largest voting blocks to ensure eternal power for the dems
SUCKERS!!!!
Posted by guest , Mar 22, 2009 10:31PM
146, the gist of my argument in 139 was that I (and people like me) kicked your collective b*tts the last time we were competing in the same environment. Hence, it will not be difficult for us to do the same again (unless you are a rockstar or an A level sportperson - of which about 200-300 exist).
Hence, if we are in a tought spot now - I have no doubt that our lives will get downgraded. But YOU should fear that more because you life will end up in the trash can in that scenario. Your glee in 137 simply shows how true that is.
And anyone reading 137 can make out what kind of a person you are - no explanations needed.
Posted by guest , Mar 22, 2009 10:35PM
Ooooooooooooh!!!!!!!! You guys are really going to take it up the chocolate road now! Couldn't happen to a nicer element. BWAAAAHHHHA!!!!!!!!!!
The Other Guy From Delaware...with a much lighter bank account lately, thanks to you putzes.
Posted by guest , Mar 22, 2009 10:40PM
Guests@#123,#131,#139, et al...
The crocks of shit from which the three of you draw nourishment must be truly bottomless.
TGFD wonders how in hell the world survived and the U.S. economy thrived before the repeal of Glass Steagal in 1999, or before the passage of the Commodity Futures Modernization Act in 2000, or before the advent of the CDS in 1994, and most especially before the actual liftoff of the CDS in its current form in the late 1990's.
You clowns typify players in a busted game that has gone totally bad and who keep looking for answers on the same two-dimensional shitty gameboard that ruined your play in the first place.
The answers are three-dimensional, ones that you seem unable to see. You three have had your ten years, 1999-2009, from start to fucked.
BTW, clown@#139...
You are particularly irksome. You have an "enggineering" degree? TGFD has one too, but I know how to spell mine.
TGFD didn't vote for Obama, but you know what? Maybe some of that 'Change' of his includes bringing back what we had before all you f'n genius-types ruined it for everyone. TGFD the Republican; I'm with him now.
Your three posts are so full of bullshitspeak and meaningless nonsense that not comprehending all that you say is not a drawback to someone among the "Less than Brightest" crowd anymore. You and yours no longer have any credibility.
The sooner you're all swept away, the better. Unwind derivative contracts? Hahaha! TGFD hopes Obama unwinds the past 10 f'n years.
The Guy from Delaware
Proudly among the "Less than Brightest"
Posted by guest , Mar 22, 2009 10:51PM
@148 Making unrealistic assumptions again, aren't we?
Anyway I'm done, I've had enough fun here baiting the "best and brightest".
-146 (not 137)
Posted by guest , Mar 22, 2009 10:52PM
Dear Ignorant Populist Opinion,
The TARP is actually MAKING the government money, which will help offset Obama's massive spending plan.
If you want the banks to return the money now then the government loses their 5% a year (roughly $17 Billion annually). Just imagine how many marsh mice in San Francisco will be saved with that money.
Posted by guest , Mar 22, 2009 10:53PM
151,
The world survived and thrived before the laws of gravitation were discovered. Similarly, the US went by just fine before the internet was invented.
Does not make either of those things bad.
That is the only thing I could respond to in your rambling post. I am impressed that you actually think other people make meaningless posts.
I do visualize a 49 year old loser who was probably mocked as a slow retard in school - something like Tom Hanks' character in Forrest Gump. In the past, no one would even let similar characters get close to a conversation amongst normal people. Unfortunately, the internet gives everyone a voice.
You know what? I take the first part of my post back. Maybe the US WAS better off before the internet was invented. The internet age should be 'unwinded' I say :)
Posted by guest , Mar 22, 2009 11:00PM
haven't been on DB in a few, but good to see EP still has that creepy fetish with the president.
Cheers B1tches,
Tanned Banker...the economy may change, but the tan stays strong.
Posted by guest , Mar 23, 2009 12:28AM
Sell your bonds - Dow 5000 sooner than expected.
~the Muleskinner~
Posted by guest , Mar 23, 2009 12:29AM
Eastbound & Down is the 2nd funniest show on television...
...the funniest being anything on CNBC.
Posted by guest , Mar 23, 2009 1:10AM
@155
why would i sell when i can rip the face off the treasury when they come in and buy? again, how many lots are they buying over 26 weeks, 2-3 days a week in how many markets? quite a lot in not so many. my guess is that we'll see an elephant stomping around between 3am-5am, stay vigilant friends.
Posted by guest , Mar 23, 2009 1:37AM
This is not going to end well......
Begun the class war has.......
Posted by guest , Mar 23, 2009 1:41AM
I must disagree with the "Wharton grad" and others you post like-minded. Maybe it's because I was a Wharton undergrad and not a MBA. Unfortunately. (?)
1. Traders bring liquidity and price transperancy to the market. By all this governance over Wall St., you will simply be giving less edge to the "house" and more edge to hedge funds, so you will either need to regulate hedge funds too or watch the the publicly-owned financials that you worked hard to save go to hell.
2. What is this about people in India living on less than $1/day? May I ask what their rent is? Or perhaps what their taxes are? I would be happy living off a $1/day if my rent was $0.10 and I paid no taxes. Get real.
3. I am surprised people are still arguing about CDS. Anyone who has any knowledge about CDS knows that you mark these positions daily. Just because $600 zillion CDS is written, there is a haircut and a margining so $600 zillion is not your true "counterparty" loss.
4. The real effect of all this socialism will be felt down the road as it reduces entrepreneurism and risk-taking, the cornerstone of American spirit. This country was built upon capitalism.
5. If Uncle Sam wants to tax bonuses at 90%, the system will simply move to greater base pay (lawyers salaries) and lower bonuses. This will simply make the system less efficient and will be costlier in the long run. It will also mean the brains will go from finance to something else, which may not necessarily be bad.
6. Good luck to everyone that worked their ass off and did it right. Looks like we were just a few years late. To everyone who hates Wall St., Emory and/or Duke still a chip on your shoulder? Grow up. There's always HBS, where you can "redeem" yourself and procure that sweet marketing gig.
8==D~~~
Posted by guest , Mar 23, 2009 2:05AM
Will Someone Remove Geithner from the Poker Table, Please? http://tinyurl.com/cx5neg
Posted by guest , Mar 23, 2009 2:30AM
159,
The point about China/India $1 was that if folks in America earning $70k are complaining that $250k is 'too much money' and hence needs to be redistributed - then the billion people earning <$1 can surely claim that $70k is 'too much money' and hence needs to be redistributed.
Posted by guest , Mar 23, 2009 3:38AM
@159: even if the rent is 0.1/day, ahev you seen those accomodations? I'm sure you could find a cardboard box to sleep in in NYC too - doesnt mean you would.
Posted by guest , Mar 23, 2009 4:38AM
So Timmy's new plan would exempt the private investors from the executive compensation rules. Hmmm, who do I believe? There are a lot of contradictions here which are only confusing to the market. We will tax all bonuses that receive government funds, except where we need them? That does not make any sense at all. I would be very hesitant to jump in even with a contract, knowing that Congress feels that contract law does not exist anymore.
Posted by guest , Mar 23, 2009 7:29AM
@139:
You got you one of them newfangled enGGineering degrees? Well I'll be dipped. Why, I remember back a spell when one of them enGGineering degree-a-majiggers could get you a white hat and a cup with yer own name on it hanging over the coffee urn in the break room.
Course, things aint looking so good for folks what got them enGGineering papers anymore - I been hanging 'round the co-op saturday mornins an been hearing all kinds of talk about this country called indeeyuh and folks is saying you can get a real good enGGineering fellow out there for pennies on the dollar. I reckon things is gonna get a fair bit tougher for you enGGineering types too, if this country goes any further down the shitter than it already is. Hmmph...
Posted by guest , Mar 23, 2009 10:19AM
RIP America. See y'all in Costa Rica.
Posted by guest , Mar 23, 2009 12:49PM
Can't help but laugh at all of the "best and brightest" on Wall Street... by best and brightest you mean coke addicted ex frat boys who went Ivy because of their father's accomplishments, and then coast into a firm because daddy knows a guy?
$250,00 is more than enough to be a paper pusher... if you are all so bright maybe more of you should have considered med school. Oh, that's right... skating by on daddy's accomplishments isn't really a viable option in med school.
Posted by guest , Mar 23, 2009 3:42PM
@166, many of us worked jobs and took on loans to put ourselves thru the Ivy and received no aid from "daddy" whatsoever. Get a life pal.
8==D~~~
Posted by guest , Mar 24, 2009 10:01AM
@167,
What does "8==D~~~" mean? "8 straight D" grades in your courses at Ivy?