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'you Eat What You Kill': Wall Street Bonuses Keep Soaring As Profits Decline

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http://www.theguardian.com/money/us-money-blog/2015/mar/15/wall-street-bonuses-rise-profits-decline

With all the changes that have taken place on Wall Street since the financial crisis hit – the mergers, the new regulations and the lawsuits that continue to take a toll on banks’ bottom lines, not to mention the Federal Reserve’s demands that they continue to prove their health via regular “stress tests” – one thing remains unaltered.

It’s the ritual of the annual bonus check handed out to those lucky folks who have survived the job cuts and who continue to endure the Hobbesian life – nasty, brutish and short – on trading desks and in investment banking groups across Wall Street.

Given the banking industry’s reputation for ruthlessness and its emphasis on the “buyer beware” philosophy, you might expect a difficult environment to be reflected in the size of those bonuses.

Well, not so fast. This is Wall Street, after all.

True, Wall Street’s profits aren’t what they used to be. Pretax profits fell 4.2% in 2014 to $16 billion, according to New York’s office of the state comptroller. If you think that sounds like a relatively modest decline, consider that 2014 profits were 33% below 2012 levels, and a whopping 74% below 2009, when Wall Street posted record results as markets zoomed back to life after the crisis and banks profited from ultra-low asset values and interest rates.

But, reflecting the new clout of banks and bankers, bonus payments didn’t dip in response to this decline. Instead, they rose. In fact, it’s the second year in a row that a decline in profitability has been accompanied by a gain in the size of bonus checks. In 2013, to be sure, the contrast was more marked: a 30.1% decline in profitability, and a 15% increase in bonus payments. This year’s gains are more modest: the New York State comptroller, Thomas DiNapoli, announced the average bonus would edge up only 2%.

Impressive. Or is it because the profit is being shared out between less people?

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Given the banking industry’s reputation for ruthlessness and its emphasis on the “buyer beware” philosophy, you might expect a difficult environment to be reflected in the size of those bonuses.

It might be pretty "ruthless" in pursuing its own interests via stuff like lobbying, revolving door tactics, jobs for the boys etc etc etc but the reality is it's a really cushy easy street cartel business sector with all the £$eu£$eu£$ trillions of bailouts, tarps, QE money printing and all the rest etc etc etc all on the backs of the taxpayers and savers etc.

Indeed "buyer beware" because of all the crooks, tricksters and fraudsters in the sector - but a "difficult environment" just has to be another of those laughs.

Edited by billybong

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It might be pretty "ruthless" in pursuing its own interests via stuff like lobbying, revolving door tactics, jobs for the boys etc etc etc but the reality is it's a really cushy easy street business sector with all the £$eu£$eu£$ trillions of bailouts, tarps, QE money printing and all the rest etc etc etc all on the backs of the taxpayers and savers etc.

Indeed "buyer beware" because of all the crooks, tricksters and fraudsters in the sector - but a "difficult environment" just has to be another of those laughs.

Customer rents must have increased to make up the spread.

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“You eat what you kill” is the motto on many a trading desk.

:lol::lol:

It's too much - it should be more like "You eat what you defraud and scrounge from taxpayers and savers"

Edited by billybong

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:lol::lol:

It's too much - it should be more like "You eat what you defraud and scrounge from taxpayers and savers"

As far as gilts and bonds are concerned, government issue new fake money and give banks a hefty slug of commission for peddling it onto the markets. There is no skill in this, no industry, no value added, yet it delivers billions into bonuses and bank coffers.

We are being bled dry by the system that says it is necessary for us to survive financially.

It is all a lie.

Edited by onlyme2

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