The Barbarian
DP Veteran
- Joined
- Jan 16, 2011
- Messages
- 1,265
- Reaction score
- 277
- Gender
- Male
- Political Leaning
- Conservative
If you come from the standpoint that too big to fail banks bit off more than they could chew and that a large part of their problem stemmed from acquiring too much property, i.e., opening too many branches they couldn't afford to operate, I'd agree with you. But that would assume they simply made bad commercial property or marketing investments. That's NOT how these big investment firms got into trouble.
Their "income" strategy had far more to do with creating lucrative derivities and commercial papers than it did purchasing commercial assets. So, let's keep things in perspective.
Yes, the bailouts helped them to straighten out their balance sheets to a degree, but had they injected ALL of their bailout funds onto their balance sheets instead of paying out bonuses, they'd be alot more liquid today and would likely have to close fewer branch offices, thereby, laying off fewer workers. It's likely they still would have had to do one or the other or both, but I don't think they'd be anywhere near the 30,000 employee mark.
Again, look at the amount of bonus money they paid out. It's un-godly!
While I can agree that these bonus amounts are staggering, why many fail to say or understand, was those bonuses were and are paid under a contract. If they hadn't of been paid, those people could have sued for them. Would that have caused some negative press for those people, certainly it would have. But it doesn't change the fact that under the legal terms of a signed contract, these bonuses were due and payable.
What surprises me just as much about people here, is that while there is much said about bank CEO”S getting paid their bonuses, it seems that no one is interested in two other companies that we gave even more money to, that haven't paid back one red cent of the money to bail them out, and are still calling for more money to be infused into them, yet their top people got their bonuses. Look up and see what it's cost us to bail out Fannie and Freddie.