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Bankers Bonuses

Shang

Shang

Sheepish Member
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#1
Wanker €™s bonuses I mean Bankers bonuses,



Something that really gets to me about the whole economic downturn is that there seems to be no €œaccountability €. By that I mean that no person(s) are being held accountable or responsible for what has happened to the banks. In fact, it seems quite the opposite as the chief executives of these banks are actually getting rewarded for their failure. For example, The Royal Bank of Scotland posted the biggest loss in British corporate history last year, so how do they punish the chief executive of this bank, who is one of many whom nearly brought the country to its knees. Well they give him a multimillion pound payoff and a pension pot worth top of his £16.9 million. Has the world gone mad or is it just me? What €™s your perspective on this? IMO the chief executives of these banks should be in jail and stripped of all their wealth.




 
Nervousnelly

Nervousnelly

The Coolest Member
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#2
The world has gone mad. Ok I'll risk getting blasted by Bspot with the following comment. Hmmm....trying to state things diplomatically. Laws are in place for a reason, but there are times that common sense must prevail.

The bankers have contracts that obligate the financial corporations to fulfill payment. Obviously I am not familiar with details of said contracts but nonetheless they have things in writing that outline the compensation package. No one ever predicted the banks to "fail" and likely there is no clause in the contract which would state "Bonuses are not paid should Bank fail or have large losses"--it just never happened so they likely overlooked things. Now they are obligated to fulfill terms of the contracts even though it looks idiotic. Likely if they don't, they will open themselves up to a barrage of lawsuits that could possibly end up costing them more.

Personally, it is screwed up and I do think that governments should step in and "alter" the preexisting agreements out of common sense. Screw the laws/contracts and allow for an over rule.

Now in terms of jailing or stripping bankers of their wealth? Where do you stop? Is it just the CEO? What about the Board of Directors, CFO, all the regulators that are supposed to monitor banking?

One of the biggest problems is that we have lost touch with pricing a commodity or entity. Money and value is all speculative and on paper. There is nothing to typically secure the value. Think of Facebook--they say that it is valued at several Billion $$. For what? Where is the true value? What is tangible about it? Do people really look at the advertising on it? I can't name one sponsor. Say tomorrow a better site pops up that people flock to. Now what is the value? Under stand my point?

How about buying a home? Years ago you had to put 20% down. Immediately the owner had equity. What happened to that simple concept.

What about many businesses? What happened to customer support? They all are trying every possible way to maximize profit-period. The other day, Verizon wireless called me and stated that they are "calling to discuss ways to save me money" What?? They hired a bunch of employees to call me and save me money and bring in less revenue? Hmm... So she proceeded to tell me that "for $5/month I could have unlimited texting." I text 3 times last month at 20 cents each. Hmmm...I wasn't born in the hills of West Virginia.

Anyways...I really am a happy person.:) Just got me going on a rant because I am old fashioned and truly a little saddened by what our world has become. The whole economic downturn has been good for me. It is making me appreciate the most basic things in life again. Hopefully it will do the same for many.

NN
 
Shang

Shang

Sheepish Member
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#3
I knew you would have a rant on this subject NN. I understand what your saying about honouring the contracts for these bankers. But, if the governments would not have stepped in to rescue these institutions there would be no contracts to honour, if you know what I mean, so it seems ludicrous to talk about lawsuits.


In regards to the jailing, I think the CEO €™s and the Board of Directors would suffice. They have to be held accountable, like the editor of a newspaper is or how you would be if you showed some kind of negligence in your job.


In regards to your housing point, the so called UK bank regulators are introducing changes so that it is no longer possibly to get a 125% mortgage or to borrow 5 times your earnings. So I think things are reverting back to the old school 20% deposits as you mentioned, I predict house prices are going to absolutely bottom out over here because of these changes leaving alot more people in negative equity.
 
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the B spot

the B spot

Pick your Poison!
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#4
HaHa NN--- no worries over here!!!

I know it seems completely ridiculous that these men who have made poor decisions and have driven companies into the ground still receive these mind-boggling exit bonuses.

You see, when a corporation votes the authority to a CEO it comes at a price ---that price is often negotiated, as is the price of voting to remove the authority---often times these businessmen receive X amount of dollars per year in actual salary, but, receive tremendous amounts of stock as a bonus, coupled with some type of actual cash incentive based on the overall wealth of the company.

From our perspective, it would be like negotiating the terms of your 401K/bonus plan.

For example, I work for this plumbing company for 12 years and they go bankrupt---but that whole time I paid into a 401K and rolled my bonuses into the same fund. Even though the company is no more, that is still my money---even if they fired me for incompetence or just got rid of me.
It would be unfair to take all of my money away just because the company either fired me or went bankrupt---they are 2 completely separate issues.

Obviously, these situations are somewhat different--the problem is the contract between the corporation and the agent (the guy who gets the cash at the end) ----you see these men will not take these positions without some type of fail safe or retirement---- the members of the board of the corporation are often very wealthy and have long since recouped any actual cash they funded the company with--so while their "stock worth" takes a hit, their personal financial standing changes only marginally.

The people that really get hurt in these situations are people like you and me--who own 1000 shares of this--or 500 shares of that----because we have used our small capital to fund a corporate giant, but we have no recourse when the giant collapses. By purchasing the stock we are saying "Hey corporate giant, we trust you to make the right decisions and in turn, make our stock worth more" ---it is called risk.

Additionally, if this corporation goes bankrupt, the creditors cannot take more than the current assets of the corporation--they do not come knocking on your door and ask you to pay 500 shares worth of the corporations debt--so there is some protection for everyone.

The real issue is when a capitalistic government bails out financial giants who have made millions of dollars and made a mistake that crippled the company. This is called socialism.

However, the government should not have the right to bail out private businesses with taxpayer dollars. That money should go back to the taxpayer.
700billion dollar relief fund to wealthy private financial companies
384 Billion dollar stimulus package so loaded with pork, it is mind boggling.

Every person/family in the US who makes under 200K a year could have received a check from the government for 110K ---to pay off a mortgage, credit card debt, etc... and guess what, that would stimulate the economy and actually help people out---but the government (again-- wealthy old, fat white men and women) decided to bypass those who need help in favor of those who have money.

There is no difference between Obama and any other person in government--they are all big business and agenda driven.

It almost feels like it is time to tear up the Constitution and re-write some rules.
J
 
Nervousnelly

Nervousnelly

The Coolest Member
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#5
I agree Bspot about starting over with the Constitution. Gotta wonder sometimes. You are very right about the government giving checks directly to the taxpayers. Can you imagine the stimulus that would have created? Idiots.

Shang--ha I can't resist a good rant once in awhile. Housing here and likely all over the globe is going to take a shit kicking. I cringe at the decline in value of our home. Bizarre world right now.

NN
 
NotGoing2GoBald

NotGoing2GoBald

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#6
I hope this reply isn't too thin/simple because I feel very passionate about all of this, but my intellectual faculties are incapacitated as I'm polishing off a bottle of grape...::;mb

-the MANUFACTURED "outrage" over the bonuses by the administration is a dog and pony show distraction.
-said bonuses are 1/10 of 1% of the money just spent by the administration on their retarded waste just passed in the first fifty days of office; let alone the cost of taxes/hyper inflation.
-said bonus contracts were not only valid PRIOR to payment, but the allowance of which were put in place by the dems in the "stimulus" package passed in the midnight hours rushed by the very administration promising not only transparency but furthermore a five day period for all Americans to review legislation, let alone the very congress which passes it.
-selectively targeting ANY group for malicious taxes is unconstitutional.
- this new "outrage" is only opening the door for further taxation as there is already talk of applying such malicious tax rates to ANYONE receiving significant funds from a business having NOTHING to do w/government bail outs.


..."Since the spending and borrowing splurge is not confined to Washington, but is being mimicked all over the world, the inflation will not strike just one country but will be global in scope. The first global inflation in our history (except, perhaps, right after World Wars I and II),it will confront our policymakers with yet another unprecedented challenge and send them back, once more, to their economics texts. There, they will find that the only remedy for global inflation is global recession, a la Paul Volker. Having just emerged from a ruinous depression, nobody will be in the mood for more unemployment, but that is just what will have to happen to cool off the inflation and break the inflationary psychology that is likely to set in."
..."None of this should come as any news to Obama. He likely knows all this. But he is determined to pass his agenda of bigger government, nationalized healthcare and vastly greater spending even at the price of inflation and subsequent recession. He puts ideology first and the economy a distant second..."
http://www.dickmorris.com/blog/2009/03/04/coming-next-year-obamas-inflation/#more-556
this administration continually preaches devisive comments of class warfare... sickening.
 
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