Bonuses for bankers

^^^ Yes, that's true re; Russia, and I would agree that 3 WS based agencies should probably not be in charge of rating the whole world.

JJLehto wrote: EL is right, and indeed while this is not a popular answer...the work required to make it in banking is pretty brutal. Most of us don't want this life, I certainly as hell don't, but you gotta be exemplary in school, get an MBA, then endure insane hours, cut throat competition and just bust your ass. So really kinda messed up to get angry over it, outside a general jealousy. Like I said the issue is when it spills out of their world and starts impacting ours. Now to the point that many modern economies are built heavily on bankers madness. This is the problem.

I couldn't give a flying fart how brutal it is and it certainly is nothing to do with general jealousy. Getting paid for doing your job is called salary, geting paid extra for doing it well is called a bonus. If you get paid a bonus whether you do well or screw up is not a bonus, it's salary with tax benefits.

Now I bet everyone is noticing those much higher prices on everything. I think the most obvious stuff is food, oil and other daily necessities. It's just a bugger for us, but in poorer countries, it's terrible.

rogerthat wrote: Yeah, prices of everything has gone up at least by 100% if not more in just the last 5-6 years here.   It's ok for the middle class but I really wonder how the poor can possibly cope with such monstrous inflation.

I can tell you it's not very easy all the time for the have nots,everything seems so expensive!But one can't forget that middle classes are also suffering a lot.Bonuses should be diminished and top bankers such as Jamie Dimon or Stephen Hester should be punished because they went dangerously wrong.Every government should separate deposit  from trading in the banks.By the way Jolly Banker by Woody Guthrie is a very good song.

The assumption that people get bonuses for not performing is quite laughable. These organisations may be ethically challenged, but they do not just give their money away out of charity. Bonuses are usually based on meeting and exceeding pre-set targets. In the case of a company that is on the ropes, the bonus might be payable if the incoming staff appointed to turn it around can initially get the losses down to a manageable level. There's no magic wand for turning the company around, so you have to offer incentives to get the people in who can do the job.

With the greatest of respect to EL, this situation is actually fairly clear cut, and it is you who appears not to understand how things work.

Bonuses are often paid to traders even when their respective banks are showing losses, and in some cases ahave been bailed out and even put at least in part, in public ownership. It wouldn't be acceptable in any other private sector areas ( andcertainly not the public sector) to pay out millions in bonuses when the business is going down the swannie. It is morally repugnant to raid the public public purse to bail out private corporations only for those corporations to be - in some cases - exempt from corporation tax and to be awarding their crooked staff vast amounts of money for gambling.

Re; "What is the point of bank trader who can't trade? Who says they can't trade? The issue is what they are trading and the level of risk ascociated to the investment, not to mention the moral arguments of trading food stocks, among other commodities, as derivatives; deliberately and irresponsibily inflating huge debt bubbles to make a fast buck, knowing full well that bubbles burst and it is then the rest of us who pay the price. The banks have been able to do this with impunity because there has always been the promise of government bail outs. If this promise was removed the trading would not be so reckless. It may be less profitable in the short term, but it would likely be more stable in the long term. I fail to hear any coherant arguments as to why the fabric of our civilization should be in the hands of five or six mega banks. No one seems bothered by this. they either invest their energies in berating the poor for drawing benefits, or the middle class for having the audacity to own a house. People need to wake the f*** up!

Re; our own greed. Is this the greed that has been agressively encouraged by successive governments? It's easy to say people have minds of their own and should be capable of making the decision to avoid debt without help, but the problem is most don't and consequently can't. If you take a single parent on benefits, who can't afford to buy new clothes for their child, and you give them a credit card, what do you think they're going to do? Cut it up and throw it away? No, they're going to do what every good parent tries to do, and privide for their child. Over the last 20 years the benefit class has been able to borrow through banks and credit card companies. Government has not intervened to discourage or even educate about rhe conseqeunces of debt, because they know that living on the never never creates an illusion of wealth which can score electoral points for them. The psychology of debt is well understood by lenders and politicians alike and is exploited fully.

Edited by Blacksword - March 05 2013 at 07:00

Easy Livin wrote: There's a great lack of understanding or heads in the sand here about how things actually work. As I've said before, I don't seek to justify the way things are, but let's live in the real world. I notice too that no one has refuted the notion that it is our own greed that is at the root of the issue.

Edited by rogerthat - March 05 2013 at 10:30

I don't know about hung as I do not really believe in the death penalty, but they should be forced to work the rest of their lives digging ditches or flipping burgers for sub-minimum wage.  I think $2.00/hour sounds about right.  And obviously, they should be stripped of their wealth.

Sorry, I still think there is a lot of misinformation here. I think it's convenient to jump on a bandwagon to criticise  the "system" without accepting responsibility for it. As I explained previously, bonuses are the "at risk" portion of a person's salary. If you simply paid them the higher salary without any incentive to earn it, would that really be better? A company may be making loses and still need to pay contractual bonuses (to current and former employees). The fact is that if they have met or exceeded the targets they were set to generate in terms of income for the company, they get the contractually agreed bonus. Those who failed and caused the loses don't. As I also explained, sometimes reducing losses is actually meeting an agreed target. That is the real world.

Well said, Bob