Banking Bandits Get Their Reward
By now everybody must know that the top banking executives responsible for our economic meltdown have no shame. Otherwise they would not have dared give themselves such hefty bonuses as a deeply perverse reward for actions that caused millions of Americans to lose their jobs and homes. The $33 billion that the executives of the nine banks bailed out with taxpayer funds paid themselves in 2008 is all one needs to know about the depth of their amorality.
But it also speaks volumes about the inefficiency of a system of rewards that has nothing to do with performance. "No Rhyme or Reason: the 'Heads I Win, Tails You Lose' Bank Bonus Culture" is the title of the report by New York's Attorney Gen. Andrew M. Cuomo unmasking this scandal. It concludes: " ... compensation for bank employees has become unmoored from the banks' financial performance."
That would not be of public concern if bank executives and their stockholders would bear the full price of such folly. But not one of those top nine banks that distributed bonuses of at least $1 million to each of 5,000 top executives faced the consequences on their own. Instead, taxpayers were called upon to pony up what will eventually be trillions of dollars to save the banks and the nation from this disaster. As the Cuomo report notes:
"Two firms, Citigroup and Merrill Lynch suffered massive loses of more than $27 billion at each firm. Nevertheless, Citigroup paid out $5.33 billion, in bonuses, and Merrill paid $3.6 billion in bonuses. Together, they lost $54 billion, paid out nearly $9 billion in bonuses and then received TARP bailouts totaling $55 billion. For three other firms -- Goldman Sachs, Morgan Stanley, and J.P. Morgan Chase -- 2008 bonus payments were substantially greater than the banks' net income."
In each instance, those bonuses on average more than doubled earnings and were in turn more than doubled by the government bailout in TARP funds. Those funds, and the nonrefundable tens of billions passed on through the AIG bailout and other government programs, come from the very taxpayers already reeling from a banking collapse brought on by reckless lending practices.
Yet the $306 billion in toxic assets that Citigroup -- a leader in the irresponsible practices that created such "assets" -- managed to pile up are also now guaranteed by taxpayer funds. And being on the public dole didn't prevent Citigroup CEO Vikram Pandit from "earning" $38 million last year.
The Merrill Lynch bonuses were paid as the company was about to collapse. It was saved at the last minute by being purchased for $50 billion by Bank of America in a deal engineered by the federal government and facilitated by $45 billion in bailout funds to BofA. On Monday, Bank of America agreed to pay $33 million in penalties to the Securities and Exchange Commission to settle an SEC complaint that BofA had deceived shareholders about those billions in bonuses.
One of those handsomely rewarded was Thomas Montag, now with BofA, who received a $39.4 million bonus for his work at Merrill Lynch, a reward for his performance as Merrill's trading and sales chief, a position in which he presided over the billions in mortgage acquisitions that fueled the company's downfall.
The banks, considered "too big to fail," were quickly showered with enormous amounts of money, contributing to a U.S. deficit expected to grow to $1.86 trillion this year. But homeowners are not too big to fail, and they were left to the tender mercies of the very bankers who swindled them with flaky mortgages.
On Tuesday, the Treasury Department criticized the major banks for their abysmally weak effort to aid distressed homeowners who are more than 60 days delinquent on their mortgages. Only 9 percent of those who qualify for assistance under President Obama's foreclosure prevention plan have been entered into trial programs to determine whether their mortgages will be modified. BofA, one of the major holders of distressed mortgages, has entered only a scant 4 percent of its eligible mortgage holders in the program.
Citigroup has managed to begin the process with 15 percent of those eligible, while Wells Fargo has begun with only 6 percent of its eligible borrowers. Compare that snail speed in helping folks keep their homes with the alacrity with which the federal government responded in bailing out the banks when they got into trouble.
The choice from the beginning of this debacle has been: Do we bail out the banks that caused the problem in the hopes that they will help ordinary folks or do we start with government relief for distressed mortgage holders? The decision to aid the bankers first was based on the assumption that for the first time in their lives they would do the honorable thing and surrender space in the lifeboats to those most vulnerable.
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Our economy is a criminal enterprise designed to rob hard working Americans and reward sociopaths like Goldman Sach;s and other crooks who produce NOTHING. The government is enabling them to do this so that they get campaign contributions along with jobs and speaking fees when they are out of office.
You wrote: "The $33 billion that the executives of the nine banks bailed out with taxpayer funds paid themselves in 2008 is all one needs to know about the depth of their amorality.
I call it IMMORALITY. They know about the suffering they're causing, unless they are so lost in rationalization and denial; they're not uneducated and uninformed, so I call it immorality not amorality, in light of the fact that they know the suffering they're causing and don't give a damn - also known as psychopathy, sociopathy, anti-social personality disorder, pathological narcissism.
Even with no modifications, home loans generally result in the borrower paying three times the amount of the loan in a 30 year amoritization plan, so plenty of money is being made. Bankers must have access to data that suggests that foreclosure somehow is worth more to them. It's always the bottom line. I guess it is irresponsible to hope that Obama would have a different perspective, but since inagueration day he has been running for re-election. He has to play the political game. The truth is, as has been said, the bankers control Washington politics. So, unless the people can organize themselves into a power bloc strong enough to start influencing elections, nothing much will change. I do believe that a groundswell will start to build in the near future that will sweep out a lot of the politicians who pretend to be for the American people's interest while taking the financial lobby money. Votes need to become more powerful than dollars and a lot will change.
Campaign finance reform, preferably publicly funded elections, and strong lobbying reform is the only concrete answer to this:
http://www
correction - I meant "publicly funded campaigns"
Its not that foreclosure is worth more to Banks, its about maintaining control of the system by keeping little people in their place.
The fraudsters are not being held accountable, but the little people always will be held accountable. This is what our alleged Democracy has been reduced to.
I sent my Senater a letter asking him not to help the bankers because I knew the thieves would just put it in there pocket. What I want to know is why we don't see more investigations by the various government agencies and the media. I guss, maybe thats where all the money is going.
And the modus operandi of the bandits has not changed in the Obama administration. That is what is so devastating, so truly depressing. The concern is STILL for the bankers and the investment houses, not for the Americans who think they are part of the middle class but are actually slowly falling into a lower class, one that cannot even be dubbed the "working class" because so many are about to lose their jobs or already have lost them. The media is no longer concerned about ordinary Americans: they talk about and promote the wealthy and the successful. Success is the only goal the Obama administration is concerned with and no matter how the means have to be twisted, no matter how the pittance that will represent health care in this country, if it is successful, gets through Congress and is signed into law, then those who put it in place will deserve another term in office. If there is still a moderate recession in 2012 but most banks and Wall St entrepreneurs are doing well, that is a success: vote 'em in again. Successful wars?? Well, that's a different problem.
Well, we've always figured that it was Wall Street that owned Main Street lock, stock and barrel. This article confirms our suspicion.
And Congress will give the traders complete control over energy with cap n TRADE.
C'mon, Robert, let's call this thing ... for once ... what it truly is.
It's crime.
And it is being aided-and-abetted by the very civil officers who are supposed to be regulating it and protecting the public interest against egregious financial abuses. Therefore, it is also "high crime."
We have to re-introduce the "C-word" into our public vernacular, and maybe just drink a little "High-C" with our Kool-Aid. For as long as we continue to coddle this thing ... and as long as we continue to treat this "economic downturn" as "a series of unfortunate events" ... the downward death-spiral that we are all now on will only pick up speed.
Instead of using "irresponsible practices," for example, use the phrase "securities fraud." One term suggests that the offender deserves only a spanking; the other, plainly, means "jail." I know of a prison on an island in San Francisco Bay that we could probably rehabilitate in short order.
Robert, this is the new face of Organized Crime. There is simply no other way to say it, and although we may flinch at these "coarse" words, we have no choice: these crimes have ended thousands of lives and devastated hundreds of millions more. "This Is Not A Drill."
Great comment. Bravo.
Co-sign!!
Applause..
http://www
BAIL OUTS = LOAN=8% INTEREST WHICH WAS PAID BACK TO THE AMERICAN TAX PAYER!
There is no reason to have any confidence in our economic system anymore to protect its citizens best interest after the biggest heist by the " too big to fail banks," just pulled off on our country. The same amoral people continue to take blood money from taxpayers losing their homes and jobs. That they are still employed to do even more horrendous and unchecked business practices on our economic system is just unbelievable. We're being set up for even a bigger bubble in the future. How to even contemplate that this would be acceptable to the American people is beyond comprehension and worrisome for our future and what a democracy means for its people. Our country is so out of balance with unscruplous people running our banking system and being rewarded for it, we need a change and starting with" NO ONE OR BUISNESS IS TOO BIG TO FAIL." Our families are being undermined and decimated by a few bonus at any cost people who have no values or patriotism for their country or its citizens. They need to be run out of town on a rail or atleast go to jail.
One things is crystal clear: if I am a businessman in another country then I am not going to do business with American companies in American dollars, and I'm not going to believe a single official pronouncement that is set-forth by any bank or government official anywhere. I will take for granted, and with abundant good-reason, that this is no less than a deliberate attempt to swindle me.
The opportunity for devastating harm to a well-intentioned businessman is ... beyond calculation. And it is all 100%-deliberate, 100%-crime. If the Government of the United States will not aggressively enforce (and restore) its own laws, as clearly it will not and has not, then "you have simply increased your count of the number of ruthless criminals in the room."
And that, ladies and gentlemen, is an environment that is mutually exclusive with "business.
It's as if the foxes guarding the henhouse have been given a new batch of chickens after the old batch mysteriously disappeared.
It's as if the foxes guarding the henhouse have been rewarded with a new batch of chickens after the old batch mysteriously disappeared.
And now we will bail out Health insurance companies by keeping the status quo. They add NO value to our health, but siphon billions of dollars out of the system....
It is a Mafia of humongous proportions ...
Corporatist plutocracy (or corporatist plutocratic kleptocracy) is my name for it.
These guys make the Mafia look like neighborhood shop-lifters grabbing a candy bar at the grocery store.
Healthcare reform is stalling. The Clintons had a better chance back in 1994 to promote healthcare reform than Obama has now because the forces lined up against it are much stronger now.
The Bankers are back with their stranglehold on the economy.
Lobbyists call the shots and the media continues to promote ignorance.
Grass roots movements are lacking. Progressives are still a minority.
The economy is going to go into a steeper decline.
The stock market has mildly rallied only because the dollar is so weak. It has nothing to do with economic recovery.
Solution - take your money out of the bank and put it under a mattress and stop paying taxes.
heat that, agree and think I will
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