Bankers pull another fast one.

[Revenant]

Last week, the New York Times proposed "10 Questions Bank CEO's Should Face." Among them:

"The Treasury has proposed a $500,000 cap on executive compensation... Many of you have complained that you will lose your top talent. Are those the same people that helped lose your banks billions?"

Oh, you jokers at the NYT . Touché!

Yes, it's "open season" on bankers. And check the new dictionary. The word 'banker' has become synonymous with "reptile" or "scalawag." Drivers will soon be using it on the street. "F**** banker!" they will yell to the car that cuts them off. "Scumbag Millionaires," the Sun called them.

English bankers got slapped around on Monday. Then, on Wednesday, it was the Americans' turn. They were summoned to Washington by Congressman Barney Frank; be prepared for a "public flogging," the New York Times warned them.

In Paris, meanwhile, the bankers tried to stay ahead of the lynch mob by proposing to cut their own bonuses.

Everybody wants to kick the bankers when they are on the ground. Heck, we'd do it too...but the crowd around them is so thick; we can't get a boot in edgewise. Besides, there are bigger charlatans still standing. After all, bankers were just doing their jobs - separating fools from their money. What about those who were supposed to be protecting the fools?

But we are in a depression. And everyone has to play his part. The politicians feign moral outrage. The bankers feign contrition. The spectators feign to know what was going on and have a good time. It's a show with a subplot, we think. In the interest of seditious mischief, here we undertake to deconstruct it.

First we begin with a critic's remark: this is a well-rehearsed storyline. When the losers are unhorsed, they are almost always spat upon. Louis 16th's severed head was held up and subjected to "atrocious and indecent gestures"...Mussolini was hung on a lamp post. The bankers seem to be getting off easy.

Now, a comparison: the farce of '09 is nothing compared to the great show put on following the '29 crash. The weakness of the present spectacle is the cast. The chief American protagonist - Barney Frank - is no match for his role model, Ferdinand Pecora. Pecora was "the most brilliant lawyer of Italian extraction in the US," said the TIME magazine report of March 6, 1933. He "finished public schools at 12. At 18, after loping through his brother's law books, he was managing clerk of a law firm. Even on the most complex cases (which he, tireless, likes best) he never needs notes, never forgets a word of testimony once it is on the record... At 47, his black eyes flash, his black hair bristles."

But then, the victims are no match for Charles Edwin Mitchell either. "Billion Dollar Charlie" earned more than a million dollars in '29, when a million dollars was still real money. Senator Carter Glass said that he "more than 50 other men is responsible for this stock crash." But, as TIME reported, "neither the directors nor any other Manhattan banker knew anyone who, they believed, could do an equally good job of carrying the bank safely through storm and strife. That he has done the job, Ferdinand Pecora would be the last to deny. The statement of National City Bank [Mitchell's] was, on Dec. 31, 1932, the envy of nearly every bank in the US."

Still, the depression was on and Mitchell was damned for it. By 1933, he was out of a job. And now Jamie Dimon, Lord Stevenson, Andy Hornby, John Mack, Vikram Pandit, and Sir Fred Goodwin are in the dock.

'Yes, we have erred and strayed like lost sheep,' the bankers chant. "We are profoundly, and I think I would say unreservedly, sorry..." said Lord Stevenson, formerly of HBOS, on Tuesday. But "UK bankers find sorry is not enough," judged a headline on Wednesday morning. "I want groveling," wrote an opinionist to the LA Times . "I want show-trial sweating and stammering. I want their nine-figure bonus checks endorsed over to the rest of us...I want blood..."

Be careful not to over-act, is our advice. Viewers might catch on. In London, the Guardian announced its own 12 questions to put to the bankers, including "why should profits be private, but losses be socialized?" Uh...that is a good question, but it is put to the wrong person. Why the bankers would want to offload their mistakes is a question even a Guardian reader could answer. Why else would they humiliate themselves publicly? Why would not a one of them dare show any fight? The pols control the money now; the bankers know it.

The question is better put to the inquisitor than to his victim. Why would the government wish to take on the losses? There, the answer is fairly easy too - power. Besides, it's not their money; it belongs to the same mouth-breathing yahoos who are enjoying the show. In fact, we have other questions we'd like to put to Barney Frank, John McFall and the rest of these sanctimonious meddlers: How many of you jackasses went short the financial sector? And if you're so smart, why didn't you warn the public about the housing bubble and the toxic asset meltdown? If your committees...and your armies of regulators at the SEC, FHA, FDIC, FSA or other agencies...could do nothing to prevent the crisis, what good are they? And how cometh it to be that the biggest financial fraud of all time took place right under your own employees' noses?

So you see, dear reader, how deliciously the plot turns? In the bubble years, the bankers ripped off the public...pretending to make them rich, of course...while the regulators looked the other way. Now, the politicians create a distraction, pretending to punish the bankers, while together they pick the public's pocket for $3 or $4 trillion more. The bankers are judged guilty; but the audience hangs.

http://www.dailyreckoning.com.au/ban...ne/2009/02/16/

These Socialist inspired Govt buy-ups are going to haunt us for generations.

Also this one for anyone (Americans especially) who's interested re the Bailout.

http://www.dailyreckoning.com.au/bai...es/2008/09/26/

[Æmeric]

Why are the members of the executive suites at the banks & brokerages getting bonuses when the banks are losing Trillions of dollars? Rank & file employees don't get bonuses when the company is losing money. On the contrary, they can expect to be laid-off or let go (no one likes to say fired), have their hours cut back or asked to take a paycut. And while I'm at it, I think Congress should take a paycut for their roll in mismanaging the economy. And cut back on the number of staffers each Senator or Representative can have. Lead by example I say.

[Vulpix]

But we are in a depression.

Very debatable, and I think it's too early to say.

In the bubble years, the bankers ripped off the public...pretending to make them rich, of course...while the regulators looked the other way. Now, the politicians create a distraction, pretending to punish the bankers, while together they pick the public's pocket for $3 or $4 trillion more. The bankers are judged guilty; but the audience hangs.

That's the gist of it ...

[Vulpix]

Why are the members of the executive suites at the banks & brokerages getting bonuses when the banks are losing Trillions of dollars?

I'll answer your question with a few short quotes that illustrate the bonus mentality:

I made several m for the bank I work for. I am a top performer, with a top education. I have sacrificed a lot to get where I am and my performance is unmatched. ... I have performed consistently over a period of years. Ok, my bonus will be down this year. But I do not see why, if I continue to produce outsized returns for my employer, I should not be paid accordingly. If I wanted to earn 50k a year and watch East Enders every night, I would have made that decision years ago.

Roger 6 days ago

I agree with Roger, I've made money trading liquid products. I could get out of all my positions any time. People in my position deserve to get paid.
John 6 days ago

I would have to agree with Roger and John. I think it is somewhat unfair for someone who performs well CONSISTENTLY to be penalised because others in the same institution performed badly. How is that just? As an employee you are NOT a shareholder or OWNER of the bank as a whole and so should NOT be penalised for performance beyond your control or remit.

To illustrate, if you are an estate agent and you outsell your colleagues. Do you think it would be seen just to then forego your commissions on the basis that colleagues were in a net loss position?

I don't think so.

SUT 6 days ago

Source

[stormlord]

Yeah, I'm not a fan of letting the politicians shift the blame away from themselves and on to the bankers, obviously the guys at the very top deserve nothing, but people who've done a good job deserve to be paid according to their personal performance.

[SwordoftheVistula]

If they really wanted to just be judged for their own personal performance, they should have started their own business and worked for themselves!

In reality, everyone's economic wellbeing is to some extent dependent on the state of the overall economy, this is why a janitor in London makes more than janitor in rural Nigeria despite performing basically the same job. The argument of these bankers doesn't make sense any more than that of the autoworker who does an 'exemplary' job building a car which is poorly designed and nobody desires to buy.

[Treffie]

Why are the members of the executive suites at the banks & brokerages getting bonuses when the banks are losing Trillions of dollars? Rank & file employees don't get bonuses when the company is losing money. On the contrary, they can expect to be laid-off or let go (no one likes to say fired), have their hours cut back or asked to take a paycut. And while I'm at it, I think Congress should take a paycut for their roll in mismanaging the economy. And cut back on the number of staffers each Senator or Representative can have. Lead by example I say.

Bonuses, bonuses, bonuses! This really bothers me - I'm astonished by the gall that the banks are showing by still giving their employees bonuses. Whatever happened to rewarding for achievement? I work in IT sales and I'm rewarded if I make a certain percentage over my target - I don't get rewarded for just turning up! These guys have got our money, and now this. And to think that these guys were seen as superheroes of the economy before all this happened!

Another thing I wish to point out is that the banks don't seem to realise that handing out bonuses is wrong, especially during times of austerity such as now.

[Freomæg]

Why are the members of the executive suites at the banks & brokerages getting bonuses when the banks are losing Trillions of dollars?

Because they're seeing just how far they can push us before we break, and then BAM! - Martial Law time!

[stormlord]

Bonuses, bonuses, bonuses! This really bothers me - I'm astonished by the gall that the banks are showing by still giving their employees bonuses. Whatever happened to rewarding for achievement? I work in IT sales and I'm rewarded if I make a certain percentage over my target - I don't get rewarded for just turning up! These guys have got our money, and now this. And to think that these guys were seen as superheroes of the economy before all this happened!

Another thing I wish to point out is that the banks don't seem to realise that handing out bonuses is wrong, especially during times of austerity such as now.

If you'd read what was linked to in the above post you'd see that this point has already been addressed; I don't think anyone (here at least) is saying that the guys at the top deserve bonuses, but as said in the article linked to above, the banks may have made losses, but how does the guy who in fact made the bank a profit of thirty million dollars this year not deserve a bonus, just like you do? Wouldn't you be upset if you worked your ass off and excelled your target by a thousand percent, only to be told that because of some morons in another division you didn't deserve your bonus? Doesn't sounf fair to me. People are paid as individuals, that is an accepted principle, so they should be rewarded as individuals to, not carry collective responsibility because the mob wants a scape goat.

[Treffie]

If you'd read what was linked to in the above post you'd see that this point has already been addressed; I don't think anyone (here at least) is saying that the guys at the top deserve bonuses, but as said in the article linked to above, the banks may have made losses, but how does the guy who in fact made the bank a profit of thirty million dollars this year not deserve a bonus, just like you do? Wouldn't you be upset if you worked your ass off and excelled your target by a thousand percent, only to be told that because of some morons in another division you didn't deserve your bonus? Doesn't sounf fair to me. People are paid as individuals, that is an accepted principle, so they should be rewarded as individuals to, not carry collective responsibility because the mob wants a scape goat.

For your information, I can't open the thread as it is blocked, so no I wasn't referring to the link. I was voicing my opinion.

As for individuals, yes, they should be rewarded but only if they've made a profit. We also know that most of these guys haven't turned in a profit recently, so they've been given bonuses regardless of how they've performed.