Pigs Are Trying to Beat the Clock
This comes to you via WSJ:
Wall Street bonuses may come early this year.
With the specter of higher taxes looming in 2011 and banks still reeling from last year’s U.K. bonus tax, executives at some financial-services companies are considering whether to pay year-end bonuses, traditionally doled out starting in January, sooner.
Managing directors at Credit Suisse Group in London learned last Wednesday that they would receive a late-summer reward that will restore at least some of the money they sacrificed last year when the bank cut payouts in response to the one-time U.K. bonus tax.
The bank will pay a midyear bonus on Sept. 1 …
Mohan garu,
All is fine bantering the banks. But what will happen if these banks collapse ? Don’t the world collapse ? Or is it over exaggerated ?
Taking another viewpoint, I think there’s got to be something they did for their bank. Don’t they deserve some money?
Ahaa…
I take your bait..
If these bankers made these profits in the legitimate way, I say “Go for it! millions even hundreds of millions.” Socializing losses, privatizing profits is what I have a problem with. Furthermore, churning money borrowed at low-interest rates and putting them back in to treasuries is not real business. It is like expensing their fat salaries at the expense of tax payers. And then there is this HFT crap!!
Do you recall the ‘good-bank, bad-bank’ debate at the end of 2008? Guess what they are doing behind the scenes? Freddie and Fannie are turned into the bad-bank. They are the dumping ground for the toxic waste from the Wall Street banks. Mark my words: two-four years down the road, these banks my end-up dumping a whole lot of their crap on Fed’s balance sheet and/or into FRE/FNM. Their balance sheets will then look a lot better. And then they will claim, “See, we always told you. The government can’t run anything. It is the Freddie and Fannie that caused all this mess. If you don’t believe us, just look at their balance sheets.”
It is the same tactics Republicans employ: Step 1: Get elected to power. Step 2: Run the place to the ground and ruin everything. Step 3: Say, “See, we told you – the Government can’t run anything.”
Mohan garu,
I do get that toxic waste thing.
But in defense of the Fed
Don’t you think the fed is tracking the loans given to the banks ? Wasn’t there a new agency to do this precise work? Wasn’t that Neel Kashkari guy doing due diligence ? A loan is a loan is a loan whichever way you twist the balance sheet. The only way this will go haywire is if the banks declare bankruptcy again.
On the positive side there is money to be made for the tax payers. Remember Clinton boasted about the loans given to Mexico. I do agree that Mexico is not Wall St. or vice versa. But at this juncture whoever is in the power has to dole out money and hope (wait) that the banks repay back.
Finally don’t you think the Republicans, if elected this time would have done precisely what Mr.Obama is doing ?
A lot of questions… so little time to answer….
Can we do a conversation on Friday and put it as podcast over the weekend?
BTW, Neel is no longer a rep of NY Fed. I believe he works for a private firm. May be PIMpCo. Here is some reading material before the call – (Sorry – I am wearing my Prof hat :))
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/25/AR2010072502755.html
Sure Mohan garu,