Joe Nocera of the New York Times has a good piece today on the Obama executive pay proposals, such that they are. While I have sometimes been hard on Nocera for taking positions that I have found to be a bit too forgiving to the financial services industry, today he gave an articulate rendition of […]
Read more...Readers know well that I am of the view that more than a few senior people on Wall Street who should have gotten nothing, and in some cases, should have gone to jail, instead made off with princely sums. But Citi’s half-baked remedy, of withholding the payouts of a few recently departed top dogs, is […]
Read more...An article by Anne Siebert at VoxEU seeks to identify why bankers made such a mess of their companies. As the summary tells us: Greedy bankers are getting most of the blame for the current financial crisis. This column explains bankers did behave badly for mainly three reasons. They committed cognitive errors involving biases towards […]
Read more...Before anyone gets hysterical, the focus of the efforts by Team Obama on financial services industry pay appears to be to force the industry to stop rewarding undue risk taking. As much as I have been critical of many Administration plans, this, at least in concept, is a good one. Why? Because I sincerely doubt […]
Read more...One of the disturbing trends of the financial crisis hasn’t simply been the willy-nilly shifting of costs onto the taxpayer, even when there were investors in risk capital, aka bondholders and stockholders, who properly should take the hit first. As distressing is the repeated, flagrant disregard for the rule of law, starting with the Treasury […]
Read more...Submitted by Rolfe Winkler, CFA, publisher of OptionARMageddon.com According to the NYT, the administration is considering all kinds of new rules in the wake of the AIG bonus scandal. These include tougher rules for mortgage lenders, new oversight powers for the Fed, and a new exchange/clearinghouse for derivatives trading. Most interesting in terms of intra-governmental […]
Read more...I know one can maintain outrage for only so long, and I find it deeply disturbing to look at the inability to rein financial industry pay in despite horrific results. If these people are so valuable, let them go to boutiques and prove it, where you eat what you kill rather than feed off a […]
Read more...I had refrained from commenting much on the latest iteration of retrading AIG’s deal with Uncle Sam, save to observe that each of its predecessors had resulted in an arrangement more favorable to AIG, and I saw no reason to assume this time would be any different. One of the features of this revamp was […]
Read more...Nassim Nicholas Taleb, of Black Swan fame, joins the chorus in attacking asymmetrical bonuses, the “head’s I win” if things go well, “tails you lose” syndrome. An oversight in this piece is that this approach nevertheless worked reasonably well in the old Wall Street. Why? The big reason was that you had owner/managers whose capital […]
Read more...The digging by the New York attorney general, Andrew Cuomo, into the bonuses paid by Merrill Lynch immediately prior to the closing of its acquisition by Bank of America, are starting to take an interesting turn. The proximate cause is that the bonuses were unseemly and unwarranted, which doesn’t form the basis for legal action., […]
Read more...In case you think my headline is too harsh, consider the one at Bloomberg: “Obama to Work on Executive Pay Limits After Industry Complaints.” So in case you were laboring under the delusion that widespread managerial failure among the nations’ top banks, to the point of being dependent on taxpayer provided drip-feeds among the nation’s […]
Read more...Lloyd Blankfein, in a Financial Times comment, offers some suggestions to policymakers and regulators on how to deal with the financial services industry. I’m sure most readers would like to see more sackcloth and hair shirt, less prescription. But setting the tone aside, I found one bit particularly interesting. Blankfein proposes that firms go back […]
Read more...I believe I am permitted to hyperventilate only once in an evening, so I’ll have to act with a modicum of restraint here. The Obama executive compensation restrictions for bailout fund recipients have been leaked, and may be long enough on appearances to appease an angry US electorate. But the shortcomings of the supposedly tough […]
Read more...Today, Senator Claire McCaskill of Missouri introduced legislation that would limit salary, bonus, and stock options for executives as financial firm recipients of bailout funds be limited to the President’s level of pay, currently $400,000. McCaskill’s proposal is likely to go all of nowhere. She is not a member of the Finance or Appropriations committee, […]
Read more...A firestorm of criticism was unleashed from Washington at bonus-reaping-while-Wall-Street-burns bankers, with President Obama deigning to join in the fray. The tone was unusually heated: President Barack Obama fed a swelling populist revolt against Wall Street bonuses, calling it “shameful” that banks doled out $18.4 billion as taxpayers bail out companies and the U.S. remains […]
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