Thursday Links

BHO, give up already. Wall streeters are going to get paid.

Washington helped Wall street banks steal money from american tax payers. People at Citigroup, Bank of America, etc are going to get paid, with money coming out of tax payers pocket.

It is time for the middle class to stand up to the rich and powerful for their rights and say "enough is enough"

Posted by: stevieb at November 5, 2009 9:12 AM

DIBS, why haven't the TARP banks repaid the TARP monies to the government? Why are they keeping the money while also paying bonuses at the same time? Why is that not theft from tax payers.

You are defending them out of your self interest as a home owner because you hope that the money will go into NY real estate and support home prices.

Why is that fair to the many renters who have been prudent and saving up but are now getting shafted by the govt and wall street again?

Posted by: stevieb at November 5, 2009 9:23 AM

>>Yes, ditto. Most of those receiving bonuses are "middle class"

statistics to back this claim up? I thought so.

Posted by: stevieb at November 5, 2009 9:26 AM

>>I am defending them because they've earned it.

ROTFLMFAO! Merrill Lynch lost $35Bill in 2008 and paid out $3Bill in bonuses. They really earned it!

>>The government doesn't actually want the TARP repaid so soon.
Says who? Can you back your claim up?

Posted by: stevieb at November 5, 2009 9:32 AM

>>BAC had $4B in Net income in 2008. On top of that, Depreciation & Amortization added another $30B to cash flow.

Who cares about BAC in 2008? we are taking about Merrill in 2008. Merrill did not become part of BAC until 2009.

Posted by: stevieb at November 5, 2009 9:44 AM

>>Give it up stevie. The system is working against you. Life is not fair.

Nope, not going to give up because you say so. We can do better in America.

Marie Antoinette told the French people to suck it up and eat cake because life is not fair. Good thing they did not listen to her.

I agree with BHO, pitch forks, baby!!

Washington = Wall Street = screw the middle class

Posted by: stevieb at November 5, 2009 12:01 PM

>>StevieB -- I'm not a supporter of the huge bonuses in general. But the majority of the bonuses are paid to those that brought in major revenue. Bonuses are not paid in a HUGE investment house according to *overall* profit/loss. They are usually paid on the performance of the particular unit. X Division was in the black by $29 billion, while Y and Z Divisions were in the red by $18 billion each. That looks like the *company* was not profitable -- overall. But the guy(s) you run X Division should most definitely receive a bonus... if that's the reward structure of the company.

You should reward the positive.
----------------------------------------

Hey DIBS, lets say I am a hedge fund manager and I ran two strategies in my fund. One lost a ton of money while the other made a little but my fund is net down massively. How about I ask my investors to pay me performance fees for the strategy that made a bit of money because they should "reward the positive" and the strategy has "earned it".

Posted by: stevieb at November 5, 2009 12:11 PM

>>This whole "screw the middle class" is getting old and largely without any intellectual support.

Proof? I thought so.

Posted by: stevieb at November 5, 2009 12:17 PM

>>Hedge funds don't play games with their investors or they lose them.

So it is ok when banks play games with tax payers when they threaten them with total economic collapse?

>>Additionally, thr hedge fund firm has a lot of its own capital and will likely reward the analysts on the strategy that worked, but not always.

That is fine if they want to pay out of their own pocket.

Posted by: stevieb at November 5, 2009 12:25 PM

"The second weakness in our government is “concentrated benefit versus diffuse harm”
also known as the problem of special interests. Decision makers help small groups who care
about narrow issues and whose “special interests” invest substantial resources to be better
heard through lobbying, public relations and campaign support. The special interests benefit
while the associated costs and consequences are spread broadly through the rest of the
population. With individuals bearing a comparatively small extra burden, they are less
motivated or able to fight in Washington.
In the context of the recent economic crisis, a highly motivated and organized banking
lobby has demonstrated enormous influence. Bankers advance ideas like, “without banks, we
would have no economy.” Of course, there was a public interest in protecting the guts of the
system, but the ATMs could have continued working, even with forced debt-to-equity
conversions that would not have required any public funds. Instead, our leaders responded by
handing over hundreds of billions of taxpayer dollars to protect the speculative investments of
bank shareholders and creditors. This has been particularly remarkable, considering that most
agree that these same banks had an enormous role in creating this mess which has thrown
millions out of their homes and jobs.
Like teenagers with their parents away, financial institutions threw a wild party that
eventually tore-up the neighborhood. With their charge arrested and put in jail to detoxify,
the supervisors were faced with a decision: Do we let the party goers learn a tough lesson or
3
do we bail them out? Different parents with different philosophies might come to different
decisions on this point. As you know our regulators went the bail-out route.
But then the question becomes, once you bail them out, what do you do to discipline
the misbehavior? Our authorities have taken the response that kids will be kids. “What? You
drank beer and then vodka. Are you kidding? Didn’t I teach you, beer before liquor, never
sicker, liquor before beer, in the clear! Now, get back out there and have a good time.” And
for the last few months we have seen the beginning of another party, which plays nicely
toward government preferences for short-term favorable news-flow while satisfying the
banking special interest. It has not done much to repair the damage to the neighborhood.
And the neighbors are angry, because at some level, Americans understand that the
Washington-Wall Street relationship has rewarded the least deserving people and institutions
at the expense of the prudent. They don’t know the particulars or how to argue against the
“without banks, we have no economy” demagogues. So, they fight healthcare reform, where
they have enough personal experience to equip them to argue with Congressmen at town hall
meetings. As I see it, the revolt over healthcare isn’t really about healthcare, but represents a
broader upset at Washington. The lack of trust over the inability to deal seriously with the
party goers feeds the lack of trust over healthcare."

Posted by: stevieb at November 5, 2009 12:30 PM

Well, did you read the 12:30 post? Why do u think it is insane rant?

Posted by: stevieb at November 5, 2009 2:13 PM

Don't judge a book by the cover. The brownstoner site does not easily lead to good formatting and easy reading.

Perhaps you should not call something stupid unless you have the chance to at least glance it over.

Posted by: stevieb at November 5, 2009 2:22 PM

>>Are you going to tell us whom you cutand pasted this from??

Are you going to tell me why u think it is insane ranting?

Posted by: stevieb at November 5, 2009 2:23 PM

>>Lobbies are a fact of life. If you don't like them work to get rid of them.

A lot of things were facts of life until they became illegal; insider trading as one example. And yes, I am working on getting rid of them by getting the word out.

Posted by: stevieb at November 5, 2009 2:33 PM

>>Insider trading has been illegal for years.

yes, but not before they were made illegal by law.

Posted by: stevieb at November 5, 2009 2:39 PM

>>which means it's OK to trade on inside information.

should i send this quote to Bill? ;-)

Posted by: stevieb at November 5, 2009 2:49 PM

>>God, your head must really hurt.

Fine. Why is my 12:30 post insane ranting?

Posted by: stevieb at November 5, 2009 3:08 PM

>>Besides, I really don't care about lobbies, lunatic fringe thoughts about whether the banks are necessary and what non-Wall Streeters think about Wall Street.

This was from a speech given by David Einhorn.

Posted by: stevieb at November 5, 2009 3:24 PM

>>Einhorn has bet heavily on the debt of CIT Corp and that isn't working out so well.

What does that one trade have to do with the content of the speech? You said you don't care about lunatic fringe and non-wall street thinking. I love it when you try to make personal attacks in lieu of offering a rebuttal.

>>There's also a lot more to that speech that you conveniently left out.

Fine, back it up. What did I leave out conveniently?

Posted by: stevieb at November 5, 2009 3:35 PM

>>Einhorn has bet heavily on the debt of CIT Corp and that isn't working out so well.

Really? Do you know exactly which bonds he purchased? How do you know it could not have been the 7.75% of 2010 mandatory that he bought? Punch it up on your bloomberg, it is trading at a 52 week high of 64cents on the dollar. (kt has a senior note attached and has first claim on assets in bankruptcy)

Also, how do you know he didn't buy other CIT bonds at 30 cents on the dollar while simultaneously buy CDS? I heard the CDS is settling at 70cents on the dollar.

Posted by: stevieb at November 5, 2009 3:46 PM

>>Like I said above, I'm not interested in ANYONE'S thinking on these particular issues.

Let's find something more relevant to argue about other than lobbies and the government's intervention into the role of banks.

Einhorn is the one promulgating the Japan debt problem....probably because he has some big shorts on Japan. In fact, Japan's cost to service its debt IS THE LOWEST AMONG ALL DEVELOPED NATIONS.

He conveniently leaves that out when he tries to work everybody up.

He's blowing his own horn to try and boost his particular positions. If you don't unnderstand that then you are naive.
----------------------
Don't change the argument. You said you dont care about what non-wall streeters think about Banks. I present you with an excerpt from David Einhorn's speech. You then say you are not interested in anyone's thinking, not just non-wall streeters.

Then you talk about his views on Japan. Where is the relevance to our discussion of wall street bailouts?

Stay on topic and focus!!

Posted by: stevieb at November 5, 2009 3:50 PM

>>We don't know specificalyy what he owns but he's been in mauch of the paper since Spring. Otherwise he had a good October, up 4%...better than the market but we were up 3% having taken on far, far, far less risk.

DIBS, I give up. I don't know why we are talking about relative performance and risk levels between your fund and greenlight's. We can't have a discussion unless you stay on topic

Posted by: stevieb at November 5, 2009 4:00 PM

>>The origanla topic was bonuses and you couldn't seem to understand why some people sdeserve to get paid in an organization despite the organization as a whole losing money.

Well, I have yet to hear a coherent counter argument.

Posted by: stevieb at November 5, 2009 5:26 PM