View Poll Results: Bank Bonuses and TARP; do we have the right to seizure or demands

Voters
7. You may not vote on this poll
  • Yes the bonuses are ours

    1 14.29%
  • No, they are free to conduct business as usual

    3 42.86%
  • We do not have right to seizure, but need new regulation to insure repayment.

    3 42.86%
  • No opinion

    0 0%
Page 1 of 2 12 LastLast
Results 1 to 10 of 11

Thread: Bank Bonuses and TARP

  1. #1
    Educator sam_w's Avatar
    Join Date
    Jul 2009
    Last Seen
    09-24-09 @ 04:43 PM
    Gender
    Lean
    Slightly Liberal
    Posts
    724

    Bank Bonuses and TARP

    There are nine banks that received $175 billion in taxpayer money last year under TARP. Of these nine, only $50bn have has been paid back. We now know that these nine banks will be handing out a total of $32.6 billion in bonuses for 2009. The headline in the WSJ read "Nine Lenders That Got U.S. Aid Paid at Least $1 Million Each to 5,000 Employees"

    Is this our money, or theirs?

    If it is ours, can we, or do we have the right to seizure?

    Do we leave this alone and just let them pay back at their schedule?

  2. #2
    Sage
    Join Date
    Jan 2009
    Last Seen
    08-27-09 @ 08:41 PM
    Lean
    Undisclosed
    Posts
    6,344

    Re: Bank Bonuses and TARP

    Unless the TARP loans contain covenants that address bonus payments and executive compensation, as repugnant as the idea may be, the banks likely have legal foundation for their actions.

    If the TARP loans contain no such restrictions, then shame on the Bush administration for not putting them there, shame on Dear Leader's administration for not putting them there before shelling out the second half of TARP, and shame on Congress for creating such an uncontrolled mess in the first damn place.

    Only if the loans contain covenants and restrictions that permit the government to object and intercede in such bonus payments should there be any effort to claw those payments back. If such language is not in the loan agreements, government should take its lumps and move on (and not make any more such stupid loans in the future).

  3. #3
    Baby Eating Monster
    Korimyr the Rat's Avatar
    Join Date
    Feb 2006
    Location
    Laramie, WY
    Last Seen
    11-23-17 @ 02:02 PM
    Gender
    Lean
    Libertarian - Left
    Posts
    18,709
    Blog Entries
    1

    Re: Bank Bonuses and TARP

    They have the legal right to conduct their business as usual. This needs to change, but it needs to be changed properly, through the Legislature, and not by Executive fiat.

  4. #4
    Girthless
    RightinNYC's Avatar
    Join Date
    Mar 2005
    Location
    New York, NY
    Last Seen
    01-23-11 @ 11:56 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    25,894

    Re: Bank Bonuses and TARP

    As much as it might make stoke populist sentiment to say "gosh dern them bankers takin all er money and millions ta boot!", I don't really see the problem in most cases.

    First, for those banks that have paid back TARP, who gives a **** what they do with their bonuses?

    Second, even for those that haven't, these payments serve a purpose. While $100m to Hall might seem outrageous in a vacuum, Phibro has earned Citi $2b in profits over the past 5 years.

    The end result of positions like yours is this:

    http://www.nytimes.com/2009/08/07/bu...hibro.html?hpw

    Phibro is enormously profitable for Citigroup, which is struggling to turn around many of its other units. The trading operation generated about $2 billion for the bank over the last five years.

    But whatever the economics, bailout politics are straining the relationship. Mr. Hall is the star of Phibro, in Westport, Conn. There is little doubt he is owed the money under his contract. But Citigroup was saved with roughly $45 billion in taxpayer aid, so its pay practices have come under public scrutiny.

    While Mr. Hall is making headlines for demanding that the bank honor his $100 million contract, lesser lights at Citigroup and beyond expect to pull down at least seven figures this year, too.

    The prospect of big paydays raises thorny questions for the government pay czar, Kenneth Feinberg, as he prepares to start reviewing compensation structures next week at companies that received bailouts. While Mr. Hallís contract with Citigroup is not in doubt, the prospect of paying large sums, even to the head of a unit raking in profits for Citigroup, could be untenable.
    Citi will likely have to spin off Phibro and thus lose out on huge amounts of revenue, all because idiots across the country can't understand why some banker is worth $100m of "their" money.

    There's a reason why Congress is ****ing terrible at running businesses. This is it.
    People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

  5. #5
    Sage
    jamesrage's Avatar
    Join Date
    Jul 2005
    Location
    A place where common sense exists
    Last Seen
    12-10-17 @ 09:23 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    31,067

    Re: Bank Bonuses and TARP

    As others have stated if there is no agreement what that money should be spent then they should be free to do with what ever the hell they want with it as long as the pay back the tax payers. Don't want tax payer loans being used for CEO bonuses,private jets, country clubs and other things the call your elected representatives and tell them to make a law requiring stipulations for any Future bailouts. It is stupid to say that we should confiscate this money or assets from them when no stipulations was made on how the money was supposed to spent.
    "A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murder is less to fear"

    Cicero Marcus Tullius

  6. #6
    Baby Eating Monster
    Korimyr the Rat's Avatar
    Join Date
    Feb 2006
    Location
    Laramie, WY
    Last Seen
    11-23-17 @ 02:02 PM
    Gender
    Lean
    Libertarian - Left
    Posts
    18,709
    Blog Entries
    1

    Re: Bank Bonuses and TARP

    This whole economic mess seems to be fairly good indication that bankers aren't very good at running them, either. I don't want the banks nationalized-- or failing that, heavily regulated-- because I think it will improve profits. I want them controlled because when 40% of the world's wealth can just ****ing vanish in eighteen months without a shot being fired, there is apparently a profound and worrisome disconnect between the economy and reality.

    Profit is a good thing. But profit needs to be based on providing tangible goods and services, not pushing imaginary "wealth" around on paper until it multiplies.

  7. #7
    Sage

    Join Date
    Oct 2006
    Last Seen
    04-23-17 @ 05:59 PM
    Gender
    Lean
    Centrist
    Posts
    15,429
    Blog Entries
    2

    Re: Bank Bonuses and TARP

    Quote Originally Posted by Korimyr the Rat View Post

    Profit is a good thing. But profit needs to be based on providing tangible goods and services, not pushing imaginary "wealth" around on paper until it multiplies.
    Well that's a fiat economic system for you.
    "Loyalty only matters when there's a hundred reasons not to be-" Gen. Mattis

  8. #8
    Girthless
    RightinNYC's Avatar
    Join Date
    Mar 2005
    Location
    New York, NY
    Last Seen
    01-23-11 @ 11:56 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    25,894

    Re: Bank Bonuses and TARP

    Quote Originally Posted by Korimyr the Rat View Post
    Profit is a good thing. But profit needs to be based on providing tangible goods and services, not pushing imaginary "wealth" around on paper until it multiplies.
    How is the current system that different from banking 200 years ago?

    You give money to the bank, they use it for their own endeavors which pay a higher interest rate, they give you the lower interest rate and keep the difference. What does it really matter if the money they invest is being used to give car loans to your next door neighbor or to buy oil futures in Tajikistan? If it returns a profit, it returns a profit.
    Last edited by RightinNYC; 08-09-09 at 04:52 PM.
    People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

  9. #9
    Sage
    Join Date
    Jan 2009
    Last Seen
    08-27-09 @ 08:41 PM
    Lean
    Undisclosed
    Posts
    6,344

    Re: Bank Bonuses and TARP

    Quote Originally Posted by RightinNYC View Post
    How is the current system that different from banking 200 years ago?

    You give money to the bank, they use it for their own endeavors which pay a higher interest rate, they give you the lower interest rate and keep the difference. What does it really matter if the money they invest is being used to give car loans to your next door neighbor or to buy oil futures in Tajikistan? If it returns a profit, it returns a profit.
    The key word in that last sentence is "if". As was demonstrated so vividly in the S&L crisis of the 1980s, in the Enron and WorldCom scandals of 2000/2001, and again in today's financial crises, sometimes the profits are not always real.

    Wells Fargo?s Profit Looks Too Good to Be True: Jonathan Weil - Bloomberg.com

    In some cases (the Phibro trader who earned a $100M bonus from Citigroup), the bonuses are legitimate compensation for work legitimately done and legitimately done well. However, when we read of Goldman Sachs' accounting trick that made their worst month ever disappear off the books completely, when AIG pleads for a bailout from the Treasury then pays out billions in bonuses, it is not hard to get a sense that somebody is gaming the system.

    What troubles me about many of the bonuses that have been paid out is not that they are being paid out, but that the TARP program was so hastily cobbled together that these issues were not discussed openly ahead of time. If I lend someone money to save their business, it's not inappropriate for me to want to have a say in how they spend that money; I want to make sure my investment doesn't get wasted (and ideally I'd like to turn a profit on it). TARP should have been approached with the same mindset--of course there should have been strings (no large loan is ever without strings)--but they should have been put out in public upfront, for banks to pass or accept as they saw fit.

  10. #10
    Girthless
    RightinNYC's Avatar
    Join Date
    Mar 2005
    Location
    New York, NY
    Last Seen
    01-23-11 @ 11:56 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    25,894

    Re: Bank Bonuses and TARP

    Quote Originally Posted by celticlord View Post
    The key word in that last sentence is "if". As was demonstrated so vividly in the S&L crisis of the 1980s, in the Enron and WorldCom scandals of 2000/2001, and again in today's financial crises, sometimes the profits are not always real.

    Wells Fargo?s Profit Looks Too Good to Be True: Jonathan Weil - Bloomberg.com
    And despite those declines, the overall return on investment is still higher than it was when we were investing in local car loans. The downs are down, but the ups are more up.

    In some cases (the Phibro trader who earned a $100M bonus from Citigroup), the bonuses are legitimate compensation for work legitimately done and legitimately done well. However, when we read of Goldman Sachs' accounting trick that made their worst month ever disappear off the books completely,
    Blame the FASB. It's worth noting that even if that loss were counted, they still would have had an above expected 1st Q profit and their large 2nd Q profit.

    when AIG pleads for a bailout from the Treasury then pays out billions in bonuses, it is not hard to get a sense that somebody is gaming the system.
    Again, they're there for a purpose - to ensure that AIG doesn't become a total sinkhole of taxpayer money.

    What troubles me about many of the bonuses that have been paid out is not that they are being paid out, but that the TARP program was so hastily cobbled together that these issues were not discussed openly ahead of time. If I lend someone money to save their business, it's not inappropriate for me to want to have a say in how they spend that money; I want to make sure my investment doesn't get wasted (and ideally I'd like to turn a profit on it). TARP should have been approached with the same mindset--of course there should have been strings (no large loan is ever without strings)--but they should have been put out in public upfront, for banks to pass or accept as they saw fit.
    I don't disagree with this at all.
    People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •