Friday, Jul 03, 2009
Those who caused the crisis reap their rewards.
Daily Mail: Goldman Sachs staff in line for record average bonus of £430,000
Apparently the banking crisis is over - workers at Goldman Sachs are set to receive record bonuses of £430,000 ($700,000) each this year, totalling £12.2billion
Furious reaction has been fired from critics who say that it is this system of lavish bonuses - and the resultant culture of greed - which got the world into the economic mess it is currently languishing in.
Posted by devo @ 09:09 AM (1572 views) Add Comment
54 Comments
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1. devo said...
Ever get the feeling you're being laughed at?
2. george monsoon said...
Devo... yes.
3. bellwether said...
It is frustrating to find people on this site (in particular) swallowing the whole bonus bullsh*t the government is so keen to serve up. Darling is quoted on the BBC about it for fcks s.
It wasn't 10 years based on insane credit expansion and the mother of all housing bubbles (cheered on, sustanined and talked up by government while squandering tax revenues) but those naughty bankers and their fat cat incomes. Give me a break.
4. Robh said...
@bellwether
Government didn't regulate, and allowed/encouraged a bubble, but that doesn't change the fact that money for bonuses comes from somewhere. The banking system syphons money for its own benefit; I suspect that's what annoys some HPC readers
5. devo said...
Bellwether , those evil/stupid (delete as appropriate) bankers are the ones who are responsible for the credit expansion!
Now they are being rewarded for effectively destroying the financial system. Get a grip!
6. flashman said...
The Badger is paying them hefty fees to sell his dodgy bonds for him. That's where a significant portion of this bonus money is coming from.
Four banks recently sold 7 billion pounds worth of crap for the Badger and in return he paid them 114 million in fees. The Badger chose the most expensive way of doing this (a syndication of banks) for reasons that escape everyone involved
7. devo said...
"for reasons that escape everyone involved"
What's their best guess?
8. flashman said...
devo, their best 'guess' is that he chose to renumerate them as well as possible because he wants to keep them sweet. He needs to keep them sweet because they are the only people capable of selling his bonds for him. It's like a pact with the devil (where both parties are the devil)
9. devo said...
Cheers flashman.
Next question, if I may...
Who bought ''7 billion pounds worth of crap' and why?
10. bluebeach said...
What is the incentive to pay vast sums for crap and who bought it?.... although, this brings us back to HPC.... we all pay through the nose for crap built houses these days. Have we forgot the value of money?
11. flashman said...
devo: about 60% was sold to fund managers, pension funds and insurance companies and the rest went to banks. All of these buyers have a constant stream of income coming in (pension contributions and insurance payments etc), so they need to do something with the money. Up until a year ago they would have hunted yield, but now they look for safe haven. It's come to something when the debt issued by a skint government is considered a safe haven but this is the world we are living in. The buyers are also helped by the government pricing our future debt too cheaply.
12. devo said...
11. flashman
Very informative. Thanks.
13. icarus said...
Flashman - good posts as usual. The banks have other holds over governments too. It's quite incredible what Gold-in-Sacks et al are getting away with. Late last year Merrill Lynch received $20bn from the US government and straight away they used $15bn of that to pay salaries and bonuses. Then they announced they were broke and needed to merge with Bank of America. The Wall Street banks knew when the crisis was going to hit and they positioned themselves to get as much as possible from the government.
We can forget Rothschild-Rockefeller-Illuminati-Bilderberg. We are seeing a new class of kleptocrats who will become the financial oligarchy for decades to come.
14. will said...
I hope they can sleep at night. If they do they should rot in hell.
15. freefall said...
For a job that benefits a handful we all pay the price for their continuing folly.
When is everyone going to realize we don't need them and just cut out the middle man and throw our money down the drain.
16. icarus said...
will @14 - why shouldn't they sleep at night? For these guys conscience is simply that small, inner voice that tells them that somebody may be watching............but since they control the watchers...........
17. george monsoon said...
Goldman Sachs run the world. Governments are their proverbial "b**ches" and we are the stuff they wipe off their feet.
18. freefall said...
bellwether its not all the banker's fault but who gave us subprime?, who took the risks? the government?
19. icarus said...
Who took the risks?
1. The owners of the money the investment banks played with - pension and mutual funds, private investors, money markets etc.
2. Yes governments/taxpayers since they were the backstop and paid out in spades.
20. quiet guy said...
"its not all the banker's fault but who gave us subprime?"
- Punters who lied about their income to get loans
- Valuers who inflated prices to keep getting trade
- Estate agents who encouraged speculation
- Rating agencies who gave AAA rating to subprime financial products
- Alan Greenspan and his spawn who delibertately inflated the money supply
Naturally, the banks were glad to play their part but in some ways, I don't blame them. The opprtunity was their to make loads of money and anyone who tried to apply the brakes was brushed aside. What would you have done given the opportunity to get seriously rich for relatively little work?
Sachs are the masters of their trade and the obvious hate figure. I'm not sure they deserve all they flak they're getting here.
21. freefall said...
icarus so the owners of the investment banks stood on the floors and personally played with that money? no the bankers did. Do you think an honest man would stand there and trade away people's lives or do you think he would hand in his resignation?
The instructions from senior bankers decimated all sensible practices and the foot soldiers implemented their orders only too happy to receive their performance related bonuses.
Your right on the government committed the criminal act of bailing out the banks and by that the banking industry who are still making loses like Northern Rock.
22. freefall said...
quite guy neither the punters, valuers, estate agents etc gave us the subprime products. They were made up by the banking industry.
23. icarus said...
freefall @21 - not sure what point you're making, but if it helps, yes the risk-takers included investment bank shareholders and commercial banks which also provided funds. In fact just about everybody except the investment bank execs doing the deals.
24. Freefall said...
icarus that is precisely the point I was making.
25. bellwether said...
Icarus they control the watchers because the watchers chose to be controlled. All of the things which we winge about on site could be altered if governments regulated banks, taxed land more efficiently, avoided loose monetary policies to artificially stoke growth, limited speculation. The nonsense about bonuses is a sideshow, distracting everyone from the manifest failure of government.
26. flashman said...
yes, the banks gave us subprime. They did this because the giant world trade imbalances caused far too much money to flood into our banks from the surplus nations. The banks had to shovel it out the door as quick as they could, hence the sub prime loans.
The banks didn't protest about this because they were doing well out of it. The government encouraged it because they were doing well out of it. The borrowers and estate agents etc lapped it up because they were doing well out of it.
Everyone knew deep down that it would end in tears but they were doing really well out of it.
27. freefall said...
icarucs that is precisely the point I am making.
28. freefall said...
Let me amend my previous statement
icarus that is precisely the point I am making.
29. devo said...
I've said before that while many of us have take some of the blame, the primary responsibility is with those who knew that what they were doing was totally unsustainable and inevitably going to lead to economic collapse.
David Faber's 'House of Cards' is well worth a watch.
THE HOUSE OF CARDS
CNBC presents the definitive report on the defining story of our time. CNBC correspondent David Faber investigates the origins of the global economic crisis, with first person accounts from home buyers, mortgage brokers, investment bankers and investors – most of whom let greed blind them, leading to the greatest financial collapse since the Great Depression.
http://www.cnbc.com/id/28892719/
30. freefall said...
This does not absolve the role played by the bankers which is what this article alludes to. Everyone knows the role estate agents played in the events which unfolded.
31. Wofmd said...
GS have picked a good time to announce (read: bury) this info whilst the media keeps the masses entertained by analysing the death of Michael Jackson to the nth degree.
Remember when GS and Morgan Stanley changed their status to “bank holding companies” back in Sept 2008?
Who provided their £6.1billion bail-out money?
32. icarus said...
Flashman @25 - but it's worth pointing out that there's no grounds for the ' Asian surplus savings' thesis. The imbalances resulted from the dollar as reserve currency and the US not allowing holders of massive amounts of dollar-denominated assets to invest in the US in anything meaningful. This meant that the oil states, China etc couldn't help but hold more dollars than they wanted. A lot went to Fannie and Freddie.
33. icarus said...
...in short, a deliberate policy by the US to have others pay for its spending, coupled with a bar to investing foreign-held dollars in US infrastructure or other parts of its real economy. Hence foreign investment in banks, F&F etc.
34. flashman said...
icarus: true enough. When I lived in the US, I was regularly lectured about how America had the purest form of capitalism in the world and also how they were a shining beacon for free trade. They wouldn't even let Cadbury buy Hershey for fuccs sake. Presumably they judged that Cadbury was from an unstable country......
35. flashman said...
Regarding the blame game: I do not think it is right to absolve the banks in any way. They knew what they were doing but that does not help us
It's a bit like a rapist being accidentally freed from jail. The rapist rapes again and is therefore guilty but the jail should have prevented it happening. Who is worst. No contest, its the rapist ...but the jail still has to be blamed for its failure in preventing the rape happening. So I guess I'm saying that apportion levels of blame is irrelevant. From a practical viewpoint, Its only worth thinking about tightening up the jails' security because the rapist ain't gonna change
36. bellwether said...
I guess it turns on your view of greed. I see it as the natural state if unchecked, so I can't fault it. If I was offered a job with GS and a bonus of $500k a year I'd pretty much crawl over broken glass for it. I suspect deep down everyone on site is like this but too envious too admit it and instead look to monpolise morality.
While I believe greed is natural I also believe that law and order exists to allow us to transcend this state a bit. The bankers were greedy, like no sht, it's the failure in law and regulation that should be the subject of ire.
37. icarus said...
flashman - or that Cadbury was an unstable country. Many "economists" here trot out the old cr@p that Asians are happily investment in hi tech America.
38. icarus said...
The last was to Flashman @32. "investing" not "investment"
39. devo said...
'So I guess I'm saying that to apportion levels of blame is irrelevant'
Not really. When the riots start, the true villains need to be identified.
40. flashman said...
devo: "When the riots start, the true villains need to be identified"
I trust we're talking about women. They are the true enemies of the HPC. Women never stop talking about buying, extending and renovating. I'm under severe pressure from Mrs Flashman to buy a house and I know many of you are in the same boat.
"but darling, houses will fall precipitously and the M3 money supply..."
"oh shut up you skinflint there is a lovely rectory style house for sale..."
41. devo said...
"but darling, houses will fall precipitously and the M3 money supply..."
I can see how she fell for your charms, you smooth-talking barsteward.
42. bellwether said...
Flash, Mrs Bellwether is pretty cool about waiting but anecdotally I sense you have a point.
Also noticing that you and Devo are getting close, indeed almost affectionate, and frankly I'm jealous!
43. flashman said...
now hold on a moment, me and devo only got close because you and techieman shamelessly flaunted your thang
44. tudorian said...
good rolling stone piece on Goldman Sachs if anyone interested !
http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine
Unfortunately not an allowed source for official postings here
45. techieman said...
hold on Flash - thought you were off to the SWs today?!?
46. flashman said...
hi techie: I've fractured my elbow so the wife's gone with her sister instead. Looks like our man has his work cut out
47. icarus said...
It's that RBS logo he's wearing
48. flashman said...
It's causing him to use too much leverage with his backhand
It's not looking good for our British hero. He can go back to being Scottish if he looses
49. Daivid Hurst said...
Bankers - the untouchable con artists who have duped taxpayers into giving them free money to rebuild their bankrupt companies and allow them to continue to dip their odious snouts into the swill. They are a truly disgusting breed, but they will get away with it as long as our politicians are in their pockets.
Bankers are rolling in the aisles, laughing and sticking the finger up to us. The seeds of the next financial collapse have already been sown......
50. bellwether said...
It's like Henman all over. Flash Devo used to refer to you as trashman, he is just using you!
Seems like no-one is agreeing with me that talking about the banks is a distraction. To use Flash's lurid example, my point is not just that rapists were released from jail but that they were relased from jail, given the addresses of all unattended ladies along with keys and some rope. Masks weren't needed because they were told there would be no consequences.
51. flashman said...
gutted. he played % tennis during the last few vital points. not the hallmark of a champ
I do actually agree with you. Classic diversion tactics. Re the rape thing - I think the government also held her down
52. techieman said...
as far as i am concerned too good to hurry is and has always been Scottish not British . When Henman played (granted Murray is a better player) there was always union jacks fluttering and i cant remember a flag of st george (apologies if i am wrong but i used to go regularly at the time and i really cant remember an English flag). Henman was a brit - a southern counties brit maybe, but still a brit. "murray mound" on the other hand is full of Scottish flags and Mr M himself - sponsorship deal notwithstanding - USED to wear Scottish headband, scotish socks and , for all i know a Scottish jockstrap..... until someone with a bit of PR naunce told him ... hmmm not such a good idea Andy.
I dont wish him ill - im just saying (and in any case they represent themselves, not their country) he's Scottish. In fact he's about as British as Alex Salmon(d) .Now i might support him if he's a better player, or a more attractive (in the playing sense) player. But not for any other reason.
Flash i hope you get better soon - how did you manage that!?
53. flashman said...
I hear what you say. The Union is not looking too strong.
Wasn't concentrating on my bike. It was one of those hill roads where the tarmac edge melts into soft peaty earth. Once your wheel strays off ,you are toast. Like a prat I cycled home and did more damage than was necessary. I am bored witless and bloody uncomfortable
Thanks for wishing me better. I appreciate it.
54. techieman said...
flash - you cant afford to do that heroic stuff at "our" age - bones take a lot longer to heal. My nan sent me a card once (when i was about 13) which said "experience is a comb which nature gives to men when they are bald". I 'll let you fill in the blanks! - Hope it heals well - and dont forget the physio you are bound to have all sorts of bits of bone floating around..