On Wall Street, the Bonuses Not the Profits Were Real

[tradergirl]

You don't say! But I read much bleating about how "hard" they work for their money - the 60 hour week and whatnot. Guess what, doctors and lawyers work 60 hour weeks too but they don't make $5M per annum by age 30. I love the private equity clowns even more. They add so much "value" to the economy! Right, by "buying" companies with borrowed investor money, stripping huge fees out up front, torching jobs at these companies and then selling their crappy stock to the public. A real double dip! Anyone up on Fortress Investment Group (FIG) and Blackstone (BX) other than the underwriters, insiders and short sellers? But . . . . they NEED those 22,000 square foot houses!

This bubble will be studied by business students for the next millennium, like the Dutch tulip bubble.

http://finance.yahoo.com/banking-budgeting/article/106328/On-Wall-Street,-Bonuses,-Not-Profits,-Were-Real?ref=patrick.net

 

[ksinger]

Date: 12/19/2008 5:43:37 AM
Author:tradergirl
You don''t say! But I read much bleating about how ''hard'' they work for their money - the 60 hour week and whatnot. Guess what, doctors and lawyers work 60 hour weeks too but they don''t make $5M per annum by age 30. I love the private equity clowns even more. They add so much ''value'' to the economy! Right, by ''buying'' companies with borrowed investor money, stripping huge fees out up front, torching jobs at these companies and then selling their crappy stock to the public. A real double dip! Anyone up on Fortress Investment Group (FIG) and Blackstone (BX) other than the underwriters, insiders and short sellers? But . . . . they NEED those 22,000 square foot houses!

This bubble will be studied by business students for the next millennium, like the Dutch tulip bubble.

http://finance.yahoo.com/banking-budgeting/article/106328/On-Wall-Street,-Bonuses,-Not-Profits,-Were-Real?ref=patrick.net

I posted that NYTimes link and an exceprt yesterday in another thread, so I''ll just repost my comment about it here:

I''ve read many on this board defend bonuses/obscene amounts of pay if "the company sees fit" or deem that "he deserved it", but this article speaks to what many of us thought of the entire house of cards.

 

[stone_seeker]

Date: 12/19/2008 5:43:37 AM
Author:tradergirl
You don''t say! But I read much bleating about how ''hard'' they work for their money - the 60 hour week and whatnot. Guess what, doctors and lawyers work 60 hour weeks too but they don''t make $5M per annum by age 30. I love the private equity clowns even more. They add so much ''value'' to the economy! Right, by ''buying'' companies with borrowed investor money, stripping huge fees out up front, torching jobs at these companies and then selling their crappy stock to the public. A real double dip! Anyone up on Fortress Investment Group (FIG) and Blackstone (BX) other than the underwriters, insiders and short sellers? But . . . . they NEED those 22,000 square foot houses!

This bubble will be studied by business students for the next millennium, like the Dutch tulip bubble.

http://finance.yahoo.com/banking-budgeting/article/106328/On-Wall-Street,-Bonuses,-Not-Profits,-Were-Real?ref=patrick.net

LOL...tradergirl dont you make your money in the market?

The medical business isnt leverageable. Also, didnt we hear the same complaints after the dot com market bubble? Since the 90s, the government only knows how to recover from a slowdown buy inflating new bubbles. So we will have bubble after bubble after bubble. Look at the bubble in Treasuries. We are in this mess because of too much debt and the government''s biggest complaint today is that banks arent lending enough.

Until the people say, we are willing to accept a depression or deep recession for many years, the government''s only response to a bubble is to re-inflate it and when that happens, the people who are responsible for allocating money will find a way to keep a lot of it for themselves. A recession or deep depression, which includes major bankruptices like GM and high unemployment is the only true way to eliminate the excesses that have accumulated. No politician has the stones to have it happen on their watch.

And I take personal offense to the clowns you refer to. Private equity also inlcudes venture capital which has led to some great new businesses that make everyday lives easier such as Google.

 

[Beacon]

Compensation in certain financial services areas is much too high. That much said, it is not something to get excited about. If a person wants to run their business and pay away all the profits in compenstation, let them do so. As an investor one understands that financial services companies will do this and that the business is very cyclical and therefore those companies never carry big PE multiples and you only buy them on cyclical upswings.

If you want to own a company that gives profit to shareholders, buy a tobacco company and disregard financial services.

I do not understand why people get so personally caught up in compensation for other people. Why not write a big post about how unfair it is that Tiger Woods gets 200 mill a year at age 30? It''s just as pointless.

Old Spanish proverb: Do your best and look at no one.

 

[movie zombie]

Date: 12/19/2008 5:43:37 AM
Author:tradergirl
You don''t say! But I read much bleating about how ''hard'' they work for their money - the 60 hour week and whatnot. Guess what, doctors and lawyers work 60 hour weeks too but they don''t make $5M per annum by age 30. I love the private equity clowns even more. They add so much ''value'' to the economy! Right, by ''buying'' companies with borrowed investor money, stripping huge fees out up front, torching jobs at these companies and then selling their crappy stock to the public. A real double dip! Anyone up on Fortress Investment Group (FIG) and Blackstone (BX) other than the underwriters, insiders and short sellers? But . . . . they NEED those 22,000 square foot houses!

This bubble will be studied by business students for the next millennium, like the Dutch tulip bubble.

http://finance.yahoo.com/banking-budgeting/article/106328/On-Wall-Street,-Bonuses,-Not-Profits,-Were-Real?ref=patrick.net

the tulip bubble is still fascinating reading!

movie zombie

 

[ksinger]

Date: 12/19/2008 2:09:03 PM
Author: Beacon
Compensation in certain financial services areas is much too high. That much said, it is not something to get excited about. If a person wants to run their business and pay away all the profits in compenstation, let them do so. As an investor one understands that financial services companies will do this and that the business is very cyclical and therefore those companies never carry big PE multiples and you only buy them on cyclical upswings.

If you want to own a company that gives profit to shareholders, buy a tobacco company and disregard financial services.

I do not understand why people get so personally caught up in compensation for other people. Why not write a big post about how unfair it is that Tiger Woods gets 200 mill a year at age 30? It''s just as pointless.

Old Spanish proverb: Do your best and look at no one.

Hmm...well I could respond with a proverb about celestial abodes, camels and needles, but why bother.

As for the Tiger Woods analogy, it doesn''t hold up because A) his success or failure doesn''t reach into and affect every corner of the global economy, B)he doesn''t get paid if he doesn''t perform, and C) when he doesn''t perform he neither expects to continue getting paid, nor does he ask the American taxpayer to bail him out.

 

[ksinger]

And I liked this one. A LOT. So much for "I''ve got mine right now, screw you" mentality.

Credit Suisse to Use Illiquid Assets to Pay Bonuses

Another good one from Slate...

Breach of Trust
Bernard Madoff''s massive fraud will cripple American capitalism.

excerpt..

The deeper irony here is that all these schemes were only possible in the first place precisely because we have, until now, lived in a culture with such extraordinarily high levels of trust, a culture in which a customer''s bona fides are accepted without question and wealthy people are thought to have earned their money. In our culture, someone like Madoff was trusted precisely because he was rich; because he was a member of the Palm Beach Country Club; because his company worked out of expensive Manhattan offices, most of which were occupied by people doing real jobs. It occurred to no one that a small group of select insiders was also operating a massive fraud scheme on the 17th floor.

In other cultures—maybe most other cultures—very rich people are suspect by definition. Recently, I met a wealthy Russian and automatically assumed he was the beneficiary of some shady scheme: How else would someone from that part of the world get rich? In fact, he turned out to be the CEO of a Western-owned company in Kiev, Ukraine, and totally above board. But I know why I made the mistake: I still remember—and Russians still remember—the fraudulent "privatization" deals and complex money-laundering operations that created so many Russian billionaires over the last two decades. I also remember the extraordinary saga of the MMM company, which in the 1990s defrauded some 2 million Russians of $1.5 billion, using what will now surely be known as the second-largest pyramid scheme of all time. Back then, we thought such blatant fraud could only take place in the lawlessness of the post-Soviet world.

We were wrong. Madoff''s pyramid scheme, far broader than anything MMM dreamed up, was made possible by our own tradition of lawfulness. And now he will help bring that tradition down. Here''s a prediction: In the coming years, American capitalism will become slower, more cautious, less productive, and less entrepreneurial. We''re still a long way from Eastern Europe of the 1990s or from the Latin America or Russia of the present. But maybe not as far as we think.

 

[Beacon]

Date: 12/20/2008 7:40:27 AM
Author: ksinger

Date: 12/19/2008 2:09:03 PM
Author: Beacon
Compensation in certain financial services areas is much too high. That much said, it is not something to get excited about. If a person wants to run their business and pay away all the profits in compenstation, let them do so. As an investor one understands that financial services companies will do this and that the business is very cyclical and therefore those companies never carry big PE multiples and you only buy them on cyclical upswings.

If you want to own a company that gives profit to shareholders, buy a tobacco company and disregard financial services.

I do not understand why people get so personally caught up in compensation for other people. Why not write a big post about how unfair it is that Tiger Woods gets 200 mill a year at age 30? It's just as pointless.

Old Spanish proverb: Do your best and look at no one.

Hmm...well I could respond with a proverb about celestial abodes, camels and needles, but why bother.

As for the Tiger Woods analogy, it doesn't hold up because A) his success or failure doesn't reach into and affect every corner of the global economy, B)he doesn't get paid if he doesn't perform, and C) when he doesn't perform he neither expects to continue getting paid, nor does he ask the American taxpayer to bail him out.

I do agree - don't bother.

 

[miraclesrule]

Karen couldn''t have said it any better in terms of a sports star or celebrity income. To compare their salaries to the EEO''s of failed companies who have the audadity to spen the taxpayers dollars in the manner that the brought down their companies is mindboggling.

Even more ironic, they blame the people for being irresponsible by entering into mortgages that they knew they could not pay, yet bonues were being handed out before the financial insitutions knew they would be able to afford to have paid them.

Now that just proves that the trickle down economics DOES work in this case.

 

[luthergirl]

don''t get me started on this!! How can one judge the entire financial community based on a few companies, lets not get into generalizations. BTW I have to laugh at the 60 hrs a week...anyone getting paid 5M + is working pretty much 24 hrs a day, 60 hrs a week would be considered a vacation, but that is the least of points.

At some point, the public needs to take responsibility, in investments, mortgages, etc. I am sick to death of the blame game. People spend more $$$ then they have and they like to blame it on anyone but themselves....and now tried to get bailed out.

I totally agree with the Tiger Woods methodology, he gets paid tons of money to golf or to endorse a product. Yes, his golf winnings are tied more to his performance, but he gets paid to endorse products no matter what his performance is. This is not the point. He gets paid--a lot of money. Is golf or product endorsement really a skill that should be paid more than lets say a teacher? or a chemist? or a stock broker? it is all relative and what the market demands....

It''s easy to throw stones and expect handouts

 

[Dancing Fire]

Date: 12/28/2008 3:53:30 AM
Author: luthergirl

At some point, the public needs to take responsibility, in investments, mortgages, etc. I am sick to death of the blame game. People spend more $$$ then they have and they like to blame it on anyone but themselves....and now tried to get bailed out.

i agree!!

 

[Harriet]

Date: 12/19/2008 5:43:37 AM
Author:tradergirl
You don''t say! But I read much bleating about how ''hard'' they work for their money - the 60 hour week and whatnot. Guess what, doctors and lawyers work 60 hour weeks too but they don''t make $5M per annum by age 30. I love the private equity clowns even more. They add so much ''value'' to the economy! Right, by ''buying'' companies with borrowed investor money, stripping huge fees out up front, torching jobs at these companies and then selling their crappy stock to the public. A real double dip! Anyone up on Fortress Investment Group (FIG) and Blackstone (BX) other than the underwriters, insiders and short sellers? But . . . . they NEED those 22,000 square foot houses!

This bubble will be studied by business students for the next millennium, like the Dutch tulip bubble.

http://finance.yahoo.com/banking-budgeting/article/106328/On-Wall-Street,-Bonuses,-Not-Profits,-Were-Real?ref=patrick.net

If only my hours had been that short.