Banks 'rushing through bonuses'

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Banks 'rushing through bonuses'

2009-02-07 04:18:24

Dilbert_X: The X stands for; +1,817|6409|eXtreme to the maX

There has been speculation that banks may be seeking to rush through bonuses for thousands of high-earning staff before an expected government crackdown.
Expectations of a cap on bonuses in banks dependent on state aid were heightened on Thursday when Prime Minister Gordon Brown said payments at the Royal Bank of Scotland must reflect the overall conditions in the economy and the performance of the bank.

The Times reported that bosses at Barclays Group and Lloyds were planning bonus payouts running into hundreds of millions of pounds to top executives and more junior staff over the coming weeks.
There was anger on Thursday at reports that RBS, which is being propped up with £20 billion of public money and is 68% owned by the Government, was preparing to make payouts to thousands of senior staff.

Now it is reported that Lloyds, which has taken £17 billion in government rescue money, is ready to pay out hundreds of millions in bonuses.
And Barclays, which has tapped Bank of England loans and guarantees running into billions of pounds, is thought to be planning to pay £1.7 billion to traders and dealmakers in Wall Street under the terms of its acquisition of part of the collapsed Lehman Brothers, reported The Times.

US president Barack Obama's proposal of a 500,000 dollar (£346,450) cap on payments to American bank executives who participated in the US bailout has led to speculation that a similar deal may be in the offing in the UK.
Downing Street would say only that the terms of incentive packages for senior executives were the subject of continuing discussions between the Treasury and the banks.

Mr Brown told a Downing Street news conference on Thursday that there were no bonuses being paid to RBS board members and no dividends to shareholders. And he added: "I strongly agree with President Obama that a new approach, the one that we introduced in October, is required to reward senior banking executives.
"Of course, we will bring forward further proposals as necessary. We expect whatever decisions are taken to reflect the conditions of the economy and the performance of the banks. There are no rewards for failure in what we are proposing."

Awesome....
This really has to stop.

Fuck Israel

2009-02-07 05:53:01

lowing: Banned; +1,662|6955|USA

I got a sollution for this.................NO BAILOUTS. Let those who will fail, fail.

2009-02-07 05:58:27

AussieReaper: ( ͡° ͜ʖ ͡°); +5,761|6456|what

lowing wrote:
I got a sollution for this.................NO BAILOUTS. Let those who will fail, fail.

Turning a recession into a depression isn't the solution.

2009-02-07 06:00:45

Mekstizzle: WALKER; +3,611|6924|London, England

lowing wrote:
I got a sollution for this.................NO BAILOUTS. Let those who will fail, fail.

Hmm I'm surprised you're not saying "so what, these people have earned the money they deserve the bonuses, it's not like you wouldn't take it if it was offered to you (even though you're offering it to yourself)"

and

"not giving these people our money means that they won't be taxed on what bonus they were entitled to for their hard work, meaning that the city will lose out on tons of tax money"

2009-02-07 06:30:49

lowing: Banned; +1,662|6955|USA

Mekstizzle wrote:
lowing wrote:
I got a sollution for this.................NO BAILOUTS. Let those who will fail, fail.
Hmm I'm surprised you're not saying "so what, these people have earned the money they deserve the bonuses, it's not like you wouldn't take it if it was offered to you (even though you're offering it to yourself)"

and

"not giving these people our money means that they won't be taxed on what bonus they were entitled to for their hard work, meaning that the city will lose out on tons of tax money"

I said nothing of deserves, I said they were contracted. and yes, if it were offered to me I would take it, how 'bout you?

It is a fact, tax money is lost if these bonuses' if they are not given. Again, this speaks nothing of deserves or entitlement, it is just the fact of the matter.

2009-02-07 06:33:07

lowing: Banned; +1,662|6955|USA

TheAussieReaper wrote:
lowing wrote:
I got a sollution for this.................NO BAILOUTS. Let those who will fail, fail.
Turning a recession into a depression isn't the solution.

Not sure there would be, someone would buy up all the loans cheap and prosper, and those that sold out would be gone.

2009-02-07 06:40:39

Mekstizzle: WALKER; +3,611|6924|London, England

lowing wrote:
Mekstizzle wrote:
lowing wrote:
I got a sollution for this.................NO BAILOUTS. Let those who will fail, fail.
Hmm I'm surprised you're not saying "so what, these people have earned the money they deserve the bonuses, it's not like you wouldn't take it if it was offered to you (even though you're offering it to yourself)"

and

"not giving these people our money means that they won't be taxed on what bonus they were entitled to for their hard work, meaning that the city will lose out on tons of tax money"
I said nothing of deserves, I said they were contracted. and yes, if it were offered to me I would take it, how 'bout you?

It is a fact, tax money is lost if these bonuses' if they are not given. Again, this speaks nothing of deserves or entitlement, it is just the fact of the matter.

Yeah I would, infact If I had the chance to offer myself a bonus like these guys are, even though my company was bailed out by the public like these guys, I'd still do it. Of course, I'd try to keep it a secret like these guys.

I'm not going to hide behind the fact that I'd be just as bad as these guys. But that doesn't make it any more right. They still shouldn't be doing this. It's not like I don't have a concept of right and wrong etc.. I just choose what I want, and you know and I know what they're doing is wrong and someone with responsibility and power needs to come in and stop it, preferably the government but they're even worse themselves so we're all fucked basically.

---

But yeah, maybe tax money is lost. But like I said in the other thread, that's part of the game. That's just something authorities will have to deal with, you can't always have the money flowing in from your land, especially when there's a drought. Besides ain't that you know what, give money to some people so that they can give it to everyone else...sounds pretty red to me

2009-02-07 07:06:13

Ajax_the_Great1: Dropped on request; +206|6950

Lynch mob! Who's with me?

2009-02-07 07:12:25

lowing: Banned; +1,662|6955|USA

Mekstizzle wrote:
lowing wrote:
Mekstizzle wrote:

Hmm I'm surprised you're not saying "so what, these people have earned the money they deserve the bonuses, it's not like you wouldn't take it if it was offered to you (even though you're offering it to yourself)"

and

"not giving these people our money means that they won't be taxed on what bonus they were entitled to for their hard work, meaning that the city will lose out on tons of tax money"
I said nothing of deserves, I said they were contracted. and yes, if it were offered to me I would take it, how 'bout you?

It is a fact, tax money is lost if these bonuses' if they are not given. Again, this speaks nothing of deserves or entitlement, it is just the fact of the matter.
Yeah I would, infact If I had the chance to offer myself a bonus like these guys are, even though my company was bailed out by the public like these guys, I'd still do it. Of course, I'd try to keep it a secret like these guys.

I'm not going to hide behind the fact that I'd be just as bad as these guys. But that doesn't make it any more right. They still shouldn't be doing this. It's not like I don't have a concept of right and wrong etc.. I just choose what I want, and you know and I know what they're doing is wrong and someone with responsibility and power needs to come in and stop it, preferably the government but they're even worse themselves so we're all fucked basically.

---

But yeah, maybe tax money is lost. But like I said in the other thread, that's part of the game. That's just something authorities will have to deal with, you can't always have the money flowing in from your land, especially when there's a drought. Besides ain't that you know what, give money to some people so that they can give it to everyone else...sounds pretty red to me

Where did you read that these guys gave THEMSELVES these bonuses' . Everyone has someone to answer to, even a CEO. Remember, someone had to hire him, and agree to a compensation package.

2009-02-07 13:09:12

Turquoise: O Canada; +1,596|6708|North Carolina

TheAussieReaper wrote:
lowing wrote:
I got a sollution for this.................NO BAILOUTS. Let those who will fail, fail.
Turning a recession into a depression isn't the solution.

Bailouts are going to deepen the recession. Lowing's actually right on this one.

Here's the main issue with bailouts -- increasing the money supply. With the amount of money that the American government is planning to inject into our economy, it's going to negatively affect the overall worth of our currency. As the value of the dollar declines, less foreign investors are interested in our assets. More trade will be done with the Euro and less with the dollar.

In effect, what this bailout will likely end up doing is shifting the economic power America has toward Europe and Asia. I can see why Europe and Asia would prefer this, but as an American, I have to say that I prefer our primacy.

Inevitably, globalization slowly levels things out so that America loses its power relative to the rest of the world, but with this stimulus package, the end result is that we're accelerating an already downward spiral.

I'd rather let globalization be the cause of our leveling out, because it's a slower process that is easier to adapt to. Bailouts have the potential to create an Argentinian-style currency crisis.

Another negative aspect to our fall is that so much of the world's economy depends on our consumption. Our trade deficit has negatively affected our own production (more specifically manufacturing), but it has created an equally fragile situation for our trading partners, since they depend on us buying a large portion of their goods. When our consumption drops off, Europe and Asia will be forced to restructure their economies so that other countries can consume more of what Americans used to consume.

The world will change dramatically in terms of economic power over the next few decades regardless of what route we take, but the bailout route is probably the most reckless one that can be taken.

2009-02-07 16:12:45

AussieReaper: ( ͡° ͜ʖ ͡°); +5,761|6456|what

Turquoise wrote:
TheAussieReaper wrote:
lowing wrote:
I got a sollution for this.................NO BAILOUTS. Let those who will fail, fail.
Turning a recession into a depression isn't the solution.
Bailouts are going to deepen the recession. Lowing's actually right on this one.

Here's the main issue with bailouts -- increasing the money supply. With the amount of money that the American government is planning to inject into our economy, it's going to negatively affect the overall worth of our currency. As the value of the dollar declines, less foreign investors are interested in our assets. More trade will be done with the Euro and less with the dollar.

Your right for the most part, but the bailout of banks was needed to prevent a depression, because you would have seen banks collapse, loans fall to pieces because the banks start looking to collect what they can and the remaining banks are going to have a huge problem when suddenly the demand for loans outreaches the money they are able to loan.

When banks stop loaning, a large section of the population suddenly wind up in either in debt, in more debt, or simply can't get home loans\car loans\student loans. etc Many people will then save rather than take a loan and pay off interest, and if that happens with less spending retailers will suffer and it just becomes a shock wave echoing out. Consumer confidence is low, and then business confidence is low.

I don't agree with the bail out money in all aspects, but the main objective has been to keep the banks lending. The interest rate even reflects that, more people are willing to borrow when rates are low.

You can run up a huge deficit spending so much money and creating deflation of the dollar, which is why I think the bailout has been poorly planned and doesn't target everywhere it should, in many cases is a waste of tax payer dollars. You've got politicians deciding where to spend and voting for a bill that should ultimately have been hammered out by treasury alone imo.

2009-02-07 16:24:58

Turquoise: O Canada; +1,596|6708|North Carolina

TheAussieReaper wrote:
Your right for the most part, but the bailout of banks was needed to prevent a depression, because you would have seen banks collapse, loans fall to pieces because the banks start looking to collect what they can and the remaining banks are going to have a huge problem when suddenly the demand for loans outreaches the money they are able to loan.

When banks stop loaning, a large section of the population suddenly wind up in either in debt, in more debt, or simply can't get home loans\car loans\student loans. etc Many people will then save rather than take a loan and pay off interest, and if that happens with less spending retailers will suffer and it just becomes a shock wave echoing out. Consumer confidence is low, and then business confidence is low.

I don't agree with the bail out money in all aspects, but the main objective has been to keep the banks lending. The interest rate even reflects that, more people are willing to borrow when rates are low.

You can run up a huge deficit spending so much money and creating deflation of the dollar, which is why I think the bailout has been poorly planned and doesn't target everywhere it should, in many cases is a waste of tax payer dollars. You've got politicians deciding where to spend and voting for a bill that should ultimately have been hammered out by treasury alone imo.

But then the problem becomes... how do you start paying off those debts?

I know it sounds harsh, but I'd rather see a lot of people suffer in the short run than have a system on a continual verge of collapse in the long run. We have a huge enough public debt as it is, but multiplying it for the sake of short term stability isn't a good way to fix things in my opinion.

What letting the market clear itself involves isn't very pleasant, but it's pretty much inevitable. Banks would fall, but others would buy the failing ones. Not every bank is on the verge of collapse. Some have been much smarter in debt management, and those banks should have the option of buying out their failing competitors.

The same is true for every other industry. There is a natural process of corporate consolidation in capitalism. It does unfortunately result in industries dominated by oligopolies, but that's still better than having industries dependent on government aid. We've already seen the negative sides of businesses dependent on government aid throughout Europe and their various corporate subsidies. In China, things are even further in that direction, and if they're not careful, our slowing economy could send theirs into a tailspin.

Ultimately, it's better to let the market clear itself, because in every economic downturn, there are always companies still around that can buy up the casualties. if you're dependent on the government to buy things up, then you end up having to artificially create capital, which degrades your currency and your overall standard of living as a result.

2009-02-07 16:33:11

AussieReaper: ( ͡° ͜ʖ ͡°); +5,761|6456|what

Yeah it was very bad timing for America, who were already in a deficit. Australia had a budget surplus and had been running a surplus for about 8 years in a row thanks to our tax heavy Liberal (right wing) govt. and we have been able to use it, now. We'll be running a deficit for a while though once our next stimulus package goes through. For us it's called a stimulus package, for you a bailout package. Same shit different wrapping.

Letting the market clear itself out is a good principal, it does stall though if the failing companies are not bought out. It's like a poisoned chalice, you buy out the company but you inherit all the failings with it. The bad debt and the falling stock prices with no real guarantee it will bounce back.

The governments can't decide who will fall and who to bailout effectively, which is really what has been needed all along.

2009-02-07 16:53:47

Spark: liquid fluoride thorium reactor; +874|6978|Canberra, AUS

http://edition.cnn.com/2009/POLITICS/02 … topstories

Is it just me, or did everything BUT bailouts get cut? GG Repubs.

Last edited by Spark (2009-02-07 17:08:07)

The paradox is only a conflict between reality and your feeling what reality ought to be.
^{~ Richard Feynman}

2009-02-07 16:59:44

Varegg: Support fanatic :-); +2,206|7113|Nårvei

Turquoise wrote:
But then the problem becomes... how do you start paying off those debts?

Print more money, it's been done before ... that's why it is so important to get the economy going asap to prevent a major devaluation ...

Wait behind the line ..............................................................

2009-02-07 17:00:02

Turquoise: O Canada; +1,596|6708|North Carolina

TheAussieReaper wrote:
Yeah it was very bad timing for America, who were already in a deficit. Australia had a budget surplus and had been running a surplus for about 8 years in a row thanks to our tax heavy Liberal (right wing) govt. and we have been able to use it, now. We'll be running a deficit for a while though once our next stimulus package goes through. For us it's called a stimulus package, for you a bailout package. Same shit different wrapping.

Letting the market clear itself out is a good principal, it does stall though if the failing companies are not bought out. It's like a poisoned chalice, you buy out the company but you inherit all the failings with it. The bad debt and the falling stock prices with no real guarantee it will bounce back.

The governments can't decide who will fall and who to bailout effectively, which is really what has been needed all along.

Well, admittedly, Australia's situation is very different from ours, as is Norway's and a few other countries smart enough to run surpluses.

I know I rag on Australia a lot concerning censorship, but when it comes to economics, you've made a lot of good decisions. I suppose that's why you're so high on the HDI list.

Canada is also better able to adapt to this crisis via their surpluses, but they're unfortunately dependent on our economy. Wherever we end up, Canada will basically end up similarly.

But when it comes to larger countries like America and the U.K., this is going to hurt like a motherfucker because we don't tend to run surpluses.

2009-02-07 17:01:28

Turquoise: O Canada; +1,596|6708|North Carolina

Varegg wrote:
Turquoise wrote:
But then the problem becomes... how do you start paying off those debts?
Print more money, it's been done before ... that's why it is so important to get the economy going asap to prevent a major devaluation ...

I think Aussie made a good point in mentioning his country's surpluses. Just like Australia, Norway has them too. So countries like yours and his can do this sort of thing without much worries, but in America.... well, we're already so far in debt that I don't think it's going to work very well.

2009-02-07 17:10:15

Varegg: Support fanatic :-); +2,206|7113|Nårvei

Turquoise wrote:
Varegg wrote:
Turquoise wrote:
But then the problem becomes... how do you start paying off those debts?
Print more money, it's been done before ... that's why it is so important to get the economy going asap to prevent a major devaluation ...
I think Aussie made a good point in mentioning his country's surpluses. Just like Australia, Norway has them too. So countries like yours and his can do this sort of thing without much worries, but in America.... well, we're already so far in debt that I don't think it's going to work very well.

Oh we will have worries ... whatever happens in the US now will hit us just a little later, Europe has become so dependent on the US and the dollar it is almost funny ... doesn't matter so much that we have a surplus, it will strike hard and the signs are allready showing with Scandinavias biggest airliner on the brink of bankruptcy and companies going out of business is multiplied ...

2009 will be a very difficult year for many people

Wait behind the line ..............................................................

2009-02-07 17:14:44

Turquoise: O Canada; +1,596|6708|North Carolina

Varegg wrote:
Turquoise wrote:
Varegg wrote:

Print more money, it's been done before ... that's why it is so important to get the economy going asap to prevent a major devaluation ...
I think Aussie made a good point in mentioning his country's surpluses. Just like Australia, Norway has them too. So countries like yours and his can do this sort of thing without much worries, but in America.... well, we're already so far in debt that I don't think it's going to work very well.
Oh we will have worries ... whatever happens in the US now will hit us just a little later, Europe has become so dependent on the US and the dollar it is almost funny ... doesn't matter so much that we have a surplus, it will strike hard and the signs are allready showing with Scandinavias biggest airliner on the brink of bankruptcy and companies going out of business is multiplied ...

2009 will be a very difficult year for many people

Good points... Still, I think the fact that it will hit you later gives you more time to restructure your trading policies.

For example, what Europe should be doing (including Norway) would involve diversifying trade. Trade less with America and spread more of your trade across the world. The more you diversify trade, the less vulnerable you are to one country falling under.

Even in the case of America falling, you could lessen some of the pain by shifting more trade to Europe in general and to Asia, South America, and Australia. The point is... the consumers are always there, but it's a matter of their distribution that will change over time.

In 20 to 30 years, America will consume far less per capita than it does today. By contrast, China and India will consume far more.

2009-02-07 17:21:13

Varegg: Support fanatic :-); +2,206|7113|Nårvei

Trade in general is a bitch these days, we have a hard time exporting anything but oil and gas ... and of course like any other country we are reluctant to import anything but the most necessary things ... the fear of stockpiling goods is becoming as bad as the blue collars are investing money.

Wait behind the line ..............................................................

2009-02-07 17:22:52

Turquoise: O Canada; +1,596|6708|North Carolina

Varegg wrote:
Trade in general is a bitch these days, we have a hard time exporting anything but oil and gas ... and of course like any other country we are reluctant to import anything but the most necessary things ... the fear of stockpiling goods is becoming as bad as the blue collars are investing money.

Norway has a big trade surplus right now, correct?

2009-02-07 18:01:52

ATG: Banned; +5,233|6832|Global Command

Most massive crime in history.

2009-02-07 19:31:55

Dilbert_X: The X stands for; +1,817|6409|eXtreme to the maX

My solution is let the companies fail, but guarantee savers deposits through govt support.
Seems win-win.
Shitty companies die.
Savers survive.
Govt doesn't need to spend more than necessary.

Fuck Israel

2009-02-07 20:19:33

Kmar: Truth is my Bitch; +5,695|6904|132 and Bush

Turquoise wrote:
Varegg wrote:
Trade in general is a bitch these days, we have a hard time exporting anything but oil and gas ... and of course like any other country we are reluctant to import anything but the most necessary things ... the fear of stockpiling goods is becoming as bad as the blue collars are investing money.
Norway has a big trade surplus right now, correct?

It's been argued that a reasonable debt can be good (better than a surplus). It means you are being invested in, via treasury certificates.. etc.

http://books.google.com/books?id=UDpvIC … ;ct=result

Xbone Stormsurgezz

2009-02-07 20:22:37

AussieReaper: ( ͡° ͜ʖ ͡°); +5,761|6456|what

And budget surpluses generally mean your being over taxed or that the govt. is neglecting funding in key areas.

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