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Bank of America Confirms 30,000 Layoffs

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.
 
They already were. The Fed under Greenspan and then Bernanke and the New York Fed ( Geithner) did a lousy job enforcing the regulations already on the books. In addition the SEC did a bad job as well as the state insurance regulators (AIG). It was not that we got rid of regulations as many say or there was not enough authority, it was the quality of the regulation.

I don't think there were regulations on the books to prevent the crisis, even if they had been enforced to the max.
 
I don't think there were regulations on the books to prevent the crisis, even if they had been enforced to the max.

That is incorrect. The Fed can regulate the types of mortgages that banks provide. Greenspan thought that ARMs were OK in that they made mortgages more affordable. Insurance regulators could have insured that AIG had proper capital to back up the derivatives they wrote. Geithner as head of the NY Fed could have sqaushed the SIVs that banks created that allowed them to put a lot of risky assets "off balance sheet", Bank regulators could have done more work and disallowed "liar loans", the Fed and SEC could have required makes to hold more capital as a percent of total assets just as they are doing now, that is nothing new. The list goes on.

The sad part is the public is really illiterate when it comes to financial matters and thus has to rely a political slogans.
 
That is incorrect. The Fed can regulate the types of mortgages that banks provide. Greenspan thought that ARMs were OK in that they made mortgages more affordable. Insurance regulators could have insured that AIG had proper capital to back up the derivatives they wrote. Geithner as head of the NY Fed could have sqaushed the SIVs that banks created that allowed them to put a lot of risky assets "off balance sheet", Bank regulators could have done more work and disallowed "liar loans", the Fed and SEC could have required makes to hold more capital as a percent of total assets just as they are doing now, that is nothing new. The list goes on.

The sad part is the public is really illiterate when it comes to financial matters and thus has to rely a political slogans.

What you're saying essentially is that OTS and the FDIC *should have* had regulations that made the subprime loans illegal, but in fact there were no such regulations on the books. So again, it wasn't primarily a failure to enforce existing regulations, but rather a failure to *enact* and enforce regulations. The same was true of the credit rating agencies which were allowed to police themselves. Greenspan was SHOCKED that they were so easy on themselves! The same was also true with the derivatives and swaps allowed that the whole scheme to proceed. The Commodities Futures Modernization Act actually stripped the CFTC of the power to regulate those transactions.
 
What you're saying essentially is that OTS and the FDIC *should have* had regulations that made the subprime loans illegal, but in fact there were no such regulations on the books. So again, it wasn't primarily a failure to enforce existing regulations, but rather a failure to *enact* and enforce regulations. The same was true of the credit rating agencies which were allowed to police themselves. Greenspan was SHOCKED that they were so easy on themselves! The same was also true with the derivatives and swaps allowed that the whole scheme to proceed. The Commodities Futures Modernization Act actually stripped the CFTC of the power to regulate those transactions.[/QUOT

Reade what I wrote not what you want to believe. I said nothing about the FDIC, rather the FED which is the key regulator for the largest banks. I did not mention CFTC, rather state insurance regulators as they are the main body regulating whether insurance companies are taking on too much risk.

No offense, most people do not understand this stuff. Which is why it is so easy for politicians to lie about what and why things happened.
 
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.

You are correct. Most if not all of the bonuses were monies paid under contract. But don't you think those contracts should have been voided since these financial institutions performed poorly? It's on par with those who decreed the failed banks should have been allowed to go bankrupt.
 
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.

Why the **** are they called "BONUSES," then? A bonus is something extra you get for good performance, aka not what these asshats were doing. If it's expected pay under contract, you call it a salary. The dishonesty of these people just makes me sick sometimes.
 
That is incorrect. The Fed can regulate the types of mortgages that banks provide. Greenspan thought that ARMs were OK in that they made mortgages more affordable. Insurance regulators could have insured that AIG had proper capital to back up the derivatives they wrote. Geithner as head of the NY Fed could have sqaushed the SIVs that banks created that allowed them to put a lot of risky assets "off balance sheet", Bank regulators could have done more work and disallowed "liar loans", the Fed and SEC could have required makes to hold more capital as a percent of total assets just as they are doing now, that is nothing new. The list goes on.

The sad part is the public is really illiterate when it comes to financial matters and thus has to rely a political slogans.

The problem as I understand things was each bank and AIG all used off-balance sheet accounting to hide their bad "Ninja" mortgage loans. Per the books "Too Big to Fail" and "Bad Money," no one outside the firms themselves knew what these financial institutions were hiding. Not their auditors, not the FedResv and certainly not the Treasury. It wasn't until things started going amuck and TresSec Paulson started digging deeper and FedResv Chairman Giethner started trying to "marry" one investment company with another did they finally start to realize more precisely what these firms were doing and just how deep their liquidity problems were.
 
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.

Easy......This goes to my arguement elsewhere that we should NOT rush into anything. It goes like this........

"You are going under. You are going to get nothing, well maybe a jail cell after our investigation. Now, we are going to bail you out under the condition that all contracts pertainly to employment and bonuses are null and void".

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.

You will find post after post after post complaining about that.
 
Why the **** are they called "BONUSES," then? A bonus is something extra you get for good performance, aka not what these asshats were doing. If it's expected pay under contract, you call it a salary. The dishonesty of these people just makes me sick sometimes.

Not so fast on that one...

Let's say I'm a slugger in MLB. My "job" is to hit home runs. We all know what the major league home run record is. If I could convince my team's owner that I could break that record (w/o "juicin' up", of course :) ) wouldn't it be in my best interest, as well as the team's AND MLB to have a provision placed in my contract that I get paid a bonus for breaking the record on top of my regular MLB salary?

Of course, that's the problem with these bank bonuses...lots of money was made but in unethical ways thereby bringing our nation's financial industry and our national economy nearly to its knees.

In hindsight, I really don't think they deserved their bonus money especially if it such funding comes at the taxpayer's expense and NOT directly from that financial institution's coffers.
 
I don't think there were regulations on the books to prevent the crisis, even if they had been enforced to the max.

Even if not, and as others note, there were regulations in place, but even if not Greenspan and Bernanke should not have facilitated the bubble with their incredible run of low interest rates. They fed the pig.
 
The problem as I understand things was each bank and AIG all used off-balance sheet accounting to hide their bad "Ninja" mortgage loans. Per the books "Too Big to Fail" and "Bad Money," no one outside the firms themselves knew what these financial institutions were hiding. Not their auditors, not the FedResv and certainly not the Treasury. It wasn't until things started going amuck and TresSec Paulson started digging deeper and FedResv Chairman Giethner started trying to "marry" one investment company with another did they finally start to realize more precisely what these firms were doing and just how deep their liquidity problems were.

There are regulators and auditors from agencies like the Fed that all but live at these big banks. The SIVs were well known to the investment community so I would have to believe that the Fed knew about them as well. The deriviatives business at AIG was a huge profit center so again not hidden.

Let's remember that having a mortgage where the lender is shaky gets waived off when the underlying asset keeps going up in value. It was only when housing prices started to go down that the s*** hit the fan.
 
What you're saying essentially is that OTS and the FDIC *should have* had regulations that made the subprime loans illegal, but in fact there were no such regulations on the books. So again, it wasn't primarily a failure to enforce existing regulations, but rather a failure to *enact* and enforce regulations. The same was true of the credit rating agencies which were allowed to police themselves. Greenspan was SHOCKED that they were so easy on themselves! The same was also true with the derivatives and swaps allowed that the whole scheme to proceed. The Commodities Futures Modernization Act actually stripped the CFTC of the power to regulate those transactions.[/QUOT

Reade what I wrote not what you want to believe. I said nothing about the FDIC, rather the FED which is the key regulator for the largest banks. I did not mention CFTC, rather state insurance regulators as they are the main body regulating whether insurance companies are taking on too much risk.

No offense, most people do not understand this stuff. Which is why it is so easy for politicians to lie about what and why things happened.

No offense, but OTS is the primary regulator of private firms such as the ones that issued and guaranteed the vast majority of the subprime and Alt-A mortgages. You know, companies like IndyMac, Countrywide, and AIG. I was trying to be nice because you are right -- it is complicated. ;)

But if you maintain that the Fed or anyone else had regulations in effect that could have stopped banks from issuing subprime loans, I would sure like to see them.
 
No offense, but OTS is the primary regulator of private firms such as the ones that issued and guaranteed the vast majority of the subprime and Alt-A mortgages. You know, companies like IndyMac, Countrywide, and AIG. I was trying to be nice because you are right -- it is complicated. ;)

But if you maintain that the Fed or anyone else had regulations in effect that could have stopped banks from issuing subprime loans, I would sure like to see them.

The New York Fed regulates the large NY banks. You are correct that they do not regulate those mortgage companies that are now mostly out of business. The large banks did not originate the loans but they did facilitate them by their bundling and securitizing those loans. They also had the responsibility to understand what they carried on their balance sheets and current regulations at the time could have been more stringent about the amount of leverage they were allowed. Also they could have looked at the deriviatives they wrote and whether those CDS could actually be paid off ( which was not the case). The CDS essentially allowed to carry this risky paper as if it was essentially risk free. Plenty of mistakes all around. Better regulators are more important than more regulations with inferior people doing the reviews.
 
The New York Fed regulates the large NY banks. You are correct that they do not regulate those mortgage companies that are now mostly out of business. The large banks did not originate the loans but they did facilitate them by their bundling and securitizing those loans. They also had the responsibility to understand what they carried on their balance sheets and current regulations at the time could have been more stringent about the amount of leverage they were allowed. Also they could have looked at the deriviatives they wrote and whether those CDS could actually be paid off ( which was not the case). The CDS essentially allowed to carry this risky paper as if it was essentially risk free. Plenty of mistakes all around. Better regulators are more important than more regulations with inferior people doing the reviews.

As I mentioned above, there were no regulations in place for regulating derivatives, and to the extent that they may be regulated they generally fall under the purview of the SEC and the CFTC -- not the Fed. Some have suggested that derivatives *should* be regulated by the Fed, but they were not during the housing bubble. Senators
 
This sure doesn't match some posts I have seen in recent days about what a great job Obama is doing does it.

We have to replace Obama ASAP because his verbal attacks and threats to big business are have a negative effect on the economy and his BS about an all new wonderful plans to get things moving is fooling no one.

When a Bank the size of B.O.A. dumps 30,000 people it will have a very negative effect not only the job numbers but the economy as a whole, and possibly really be bad news on a local level that spreads to others not directly connected to B.O.A.

This has bad long lasting connotations for the future, I hope I am wrong but bad news is mounting.
 
As I mentioned above, there were no regulations in place for regulating derivatives, and to the extent that they may be regulated they generally fall under the purview of the SEC and the CFTC -- not the Fed. Some have suggested that derivatives *should* be regulated by the Fed, but they were not during the housing bubble. Senators

I am not putting it all on the Fed just using some examples. Also not so much the regulation of derivatives but how they were viewed as a shield against losses thus making certain risky assets have to hold less reserves, allowing more leverage.
 
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