Bonuses for bankers

The Last One 

I really don't care, I used to...oh when I was a pissed off progressive I wanted them all to burn. Especially after the recession.

In recent years, I've realized I really don't care about the wild world that is wall street. They can live in their small universe where they shuffle money around, make millionaires multi millionaires, live and die by the volatile stock market, even use their insane lending techniques....as long as it stays in their small universe.
Sadly, they have increasingly been moving into the economy at large and I fear now we all are becoming tethered to them and their games! That is what I don't like and seems like a dangerous place to be, especially when they don't pay for their stupidity.

Jim Garten wrote: JJLehto wrote: Jim Garten wrote: King of Loss wrote: I mean have you read the origins of HSBC, I mean the bank was set up for the drug business. Bonuses aside, this is a serious accusation - backup?? ...ya didn't hear?Well OK I don't know about it's origins, that seems a little nutty Nope - call me Mr head in the sand, but I genuinely did not know that

Easy Livin wrote: ...what happens to those profits? They go to the rich eh? well actually most of them go to you and me. The big investors in companies are pension funds, and other investors such as unit trusts, mortgage equity savings, etc. You and I demand that our pension funds make as much money as they can for us. The pension funds in turn put pressure on the companies they invest in to perform well and make big profits. The companies offer their staff bonuses to make big profits. Who is behind the banker's bonuses, why it's YOU!! So a bit less of the hypocrisy. It's very easy to put your head in the sand and point the finger at others. A bit more honesty all round when it comes to our own greed would not go amiss.

Easy Livin wrote: I'm certainly not going to defend the actions of those who have created the mess the Banks find themselves in. There is however a lot of hypocrisy, misinformation and misunderstanding when it comes to bankers and bonuses. The term Bankers is misleading for a start. The vast majority of people who work for banks receive average or lower salaries. The people who serve you in your branch for example probably get paid less than you. Even the branch manager these days is little more than a glorified supervisor. If they get a bonus at all, it might be 3 or 4 % of their salary, and then only if they are deemed to have "performed" really well. I'm sure we all know people who work in banks who would laugh at the idea that they get enormous bonuses. The people getting the big bonuses are the people in the top jobs and the traders in the global markets who effectively gamble with the banks' money. These people are not "bankers" in the traditional sense, they are commodity traders who might just as easily be dealing in petrol or gas or gold. These traders should be grouped together under a global title, not just conveniently called bankers.  Looking at bonuses themselves, these are an effective incentive if they are used properly. They are used in all walks of life. No one ever questions a footballer getting a huge bung for winning the cup, do they? A bonus is the "at risk" part of your salary. A "Banker's" salary might be say £100,000. His employer's say to him, we will pay you £50,000 guaranteed. To get the other £50000 you have to make the company £1 million. If you don't, you don;t get the bonus. If he does, he appears to get a bonus of the equivalent of his salary. What if they had jsut paid him £100,000, would you be happier because it was less transparent? Taking it further, the employer says to the"banker" for every £1 million profit you make for the company, we will give you £50,000. The guy makes a profit for the company of £10 million. His bonus is £500,000. He has added £10 million to the companies profits though. Does this show that incentives a work? Maybe. And what happens to those profits? They go to the rich eh? well actually most of them go to you and me. The big investors in companies are pension funds, and other investors such as unit trusts, mortgage equity savings, etc. You and I demand that our pension funds make as much money as they can for us. The pension funds in turn put pressure on the companies they invest in to perform well and make big profits. The companies offer their staff bonuses to make big profits. Who is behind the banker's bonuses, why it's YOU!! So a bit less of the hypocrisy. It's very easy to put your head in the sand and point the finger at others. A bit more honesty all round when it comes to our own greed would not go amiss.

I think it is broadly understood what is meant when the media refers to 'bankers' I don't know anyone who thinks this term refers to a cashier at Bacrlays on the High Street. It's poppycock to suggest otherwise.

What do you mean no one minds when footballers get awarded huge sums of money for for turning up on a Saturday?? I think I have only ever heard people complain about that.

The issue is not so much the fact that some people earn vast amounts of money, it's that they STILL get paid vast amounts of money when they fail or their organisation is implicated in criminal activity. When they are sacked, they STILL get a vast payouts. The investment banks f***ed up beyond measure and they were STILL given billions in bailouts from the public purse, with which they were supposed to start lending out to businesses to stimulate the economy. They have broadly failed to do this, and yet STILL they are promised more. In the US they have been basically promised unlimited QE until the currency is rendered virtually worthless.

There is absoluetly no hypocrisy at all in levelling criticism at this industry and how they reward their traders. The problem here is that despite the huge bonuses and payouts for generating huge profits for these banks, in the fullness of time these pension funds are all too likely to collapse due to the ultra high risk nature of the investments, and the risks are getting higher! If the pension market is fluttered in a derivative bubble, when that goes 'pop' you'll have f**k all for your retirement. But guess what, the mooks who pissed your money away will STILL be awarded sums of money that you and I cannot even comprehend. It's also not so much a case of you and I demanding vast returns from our pension funds, it being sold the prmoise of vast returns without having the full extent of the risk explained to us. If expectations were set accordingly then our collective demands for great wealth in retirement would be tempered by reality. Not that I actually know anyone who either expects or demands to be rich in retirement. Who are you referring to when you say we?

However, bankers aren't the only culpable parties in this matter.   Rating agencies also played a huge part and sorry to say that their defence that "a rating is just an opinion" is hogwash.   A lawyer, doctor or accountant is accountable for the professional integrity of his opinion and can be made liable for gross negligence.  So if it is just an opinion and not one that can be reasonably relied upon, then it's worth about as much as my or anybody else's opinion on an instrument or economy and no more.   I believe the US Justice dept is now pursuing S&P but it might be too late.  They have already 'ensured' that civil suits on S&P would be time-barred, I think.   

Edited by rogerthat - March 01 2013 at 05:05

Blacksword wrote: The conseqence of being downgraded is that it potentially costs more to borrow.

Which is fair as long as ratings agencies do their jobs.   Issuing AAA ratings to instruments derived from underlying subprime mortgages does not strike me as very prudent. 

Blacksword wrote: Edit: A note of caution around the IMF and the World Bank. They may come out with all these common sense reccomendations for the global economy, but they are not the 'good guys' in all of this. They are the loan sharks of last resort and ultimately feed the global banks with their plunderings. They loan money to a struggling country, and in return the nation agrees to a set of conditions 'Special Drawing Rights' which usually commit that country to selling up its public assets at bargain basement prices to the IMF who then sell them on to the private sector.

Aye, we are quite familiar with their ways and keep them at arm's length.   My point was, therefore, that even IMF had sounded out central bankers on the coming tsunami so it is not the case that it was unforeseen and caught them by surprise.   They were and continue to be reluctant to acknowledge the problems of the financial system as it exists today.

I think banking does a great deal in allocating assets and resources by investing in commercial operations, but the problem comes in when they actively manipulate the money supply into their own pockets. Most of the general public is not really benefiting too much from the heedless mindless consumerism that is derived from all of this crazy banking debt ponzi scheme. I mean how much healthier are the public in these wealthier countries compared to before. I mean most of the United States is fat, overweight and tired after all of the stuff that is consumed, which they must in turn consume more of other things in order to feel better.

JJLehto wrote: Jim Garten wrote: King of Loss wrote: I mean have you read the origins of HSBC, I mean the bank was set up for the drug business. Bonuses aside, this is a serious accusation - backup?? ...ya didn't hear? Well OK I don't know about it's origins, that seems a little nutty,  but yeah there was a huge non scandal about HSBC and links to drugs http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213 http://www.nbcnews.com/business/report-hsbc-allowed-money-laundering-likely-funded-terror-drugs-889170 http://www.huffingtonpost.com/2013/01/02/hsbc-money-laundering-colombian-drug-traffickers_n_2395167.html

Well, it's a thing called narco-terrorism. I think it has been around since some blokes in the City of London came up with a great way to make money.

I mean, just think about how much drugs has flooded into Russia, Europe and the United States these last 20 or so years.


Edited by King of Loss - March 01 2013 at 12:51

Blacksword wrote: King of Loss wrote: rogerthat wrote: Blacksword wrote: The conseqence of being downgraded is that it potentially costs more to borrow.  Which is fair as long as ratings agencies do their jobs.   Issuing AAA ratings to instruments derived from underlying subprime mortgages does not strike me as very prudent.  Blacksword wrote: Edit: A note of caution around the IMF and the World Bank. They may come out with all these common sense reccomendations for the global economy, but they are not the 'good guys' in all of this. They are the loan sharks of last resort and ultimately feed the global banks with their plunderings. They loan money to a struggling country, and in return the nation agrees to a set of conditions 'Special Drawing Rights' which usually commit that country to selling up its public assets at bargain basement prices to the IMF who then sell them on to the private sector. Aye, we are quite familiar with their ways and keep them at arm's length.   My point was, therefore, that even IMF had sounded out central bankers on the coming tsunami so it is not the case that it was unforeseen and caught them by surprise.   They were and continue to be reluctant to acknowledge the problems of the financial system as it exists today. The whole entire issuance of AAA is fraud itself. If the United States and the United Kingdom looked at its real debt, it should get a FFF debt rating, because both countries are 100% bankrupt. The reason why the government hasn't taken these banks to jail is because the lies that the banks perpetuate help to prop up the entire corrupt and greedy political establishment by issuing fake paper currency. As I said I suspect the criteria for rating is almost certainly not just based on a nations debt. If the nation in question is experiencing an increasing level of GDP growth, then it's arguably in a favourable position to begin reducing that debt. The UK was downgraded because it's economy is at best stagnant, while it's borrowing is going through the roof.

There are countries that completely reduced and paid off their debt like Russia, but their rating is still nowhere as high as the UK, US, Germany, etc.

I think it's not accurate to have 3 Wall Street agencies measure the credit ratings for the entire world, is it? There are some competing agencies coming around, I'm hoping their numbers will get coverage, but doesn't seem like the monopolistic media will grant them much exposure.