Admittedly we haven’t been all over this one to date, but this is interesting. Lehman Brothers appears to have actually broken the law:
[A] blockbuster 2,200 page report on Lehman Brothers by a court-appointed examiner shows Lehman Brothers executives moving $50 billion in toxic assets off-balance-sheet to deceive investors about its financial health.
Say, we just learned about a $50 billion fraud on Thursday. Think there might be some newsworthy follow-ups here? Actually there are, and both The New York Times and Wall Street Journal have them, but they stuff them inside.
–snip–
Somehow the Times thought more people would care about Sorkin’s scoop on a $3 billion deal for Tommy Hilfiger or that it was more important than an auditor approving accounting fraud. They don’t and it’s not.
Look, I know that Lehman collapsed a year and a half ago, but this is a major story—one that finally gets awfully close to putting the crimes in the crisis. I’ll go ahead and say it: If you’ve wanted to know about the Valukas report and its implications, you’ve been better served by reading Zero Hedge and Naked Capitalism than you have The Wall Street Journal or New York Times. This on the biggest financial news story of the week—and one of the biggest of the year. These papers have hundreds of journalists at their disposal. The blogs have one non-professional writer and a handful of sometime non-pro-journalist contributors.
When they’re confronted with things like this, the traditional media tends to explain that it just so happened that people weren’t interested in Wall Street crime, they were interested in the latest celebrity break-up. But when they don’t make the news about Wall Street available to begin with, it’s really not a fair test. “People weren’t interested in the thing we didn’t bring to their attention” isn’t an adequate defense for burying a story.
Working people have plenty to be angry with Wall Street about. A $700 billion bailout. Toxic assets and loan guarantees to the tune of hundreds of billions of dollars. A financial crisis and credit crunch. Billions of dollars in six- and seven-figure bonuses to the Wall Street executives who got us into this mess.
Unemployment reaching 10 percent. A mortgage crisis extending far beyond subprime loans. Abusive credit and debit card fees. More than five job-seekers for every one job.
Wall Street has treated Main Street as a giant ATM—gambling with the economy, then coming back with their hands out for help. But somehow, no matter how much help the banks need to survive, they always have the resources to fight proposals to regulate them or get them to pay their fair share.
That’s why Working America has launched the ”I am not your ATM” campaign. Already, people in Albuquerque, N.M.; Columbus, Ohio; Portland, Ore.; Ann Arbor, Mich.; Little Rock, Ark.; and Minneapolis have been photographed with “I am not your ATM” signs at major banks to let Wall Street know they’ve had enough. Wall Street’s biggest banks need to be held accountable, with a strong, independent Consumer Financial Protection Agency. Rather than asking taxpayers for more money, Big Banks need to start repaying us for the damage they’ve done.
In the coming week, we at Working America will hold more events in cities across the country, but you can participate online. Submit a photo to NotYourATM.com and send Wall Street the message that you’re done being Big Banks’ ATM. It’s time for them to clean up the mess they made, instead of expecting working people to do it for them.
Last year, Wall Street made $55 billion in profits and gave out $20.3 billion in bonuses, 17% more than in 2008.
Average taxable bonuses on Wall Street rose to $123,850 in 2009, DiNapoli said. Compensation at Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley, three of New York’s biggest banks, rose 31 percent, he added.
Mother Jones has a few suggestions for things that $20 billion could have been better spent on:
You could pay the salaries of more than 390,000 public school teachers across the country.
Are you in a bad relationship…with your bank? Did it lure you in with sweet talk and low rates, then turn around and raise those rates when you weren’t looking? Do you feel burned by having to pay fees, fees, and more fees, while the banks get bailed, bailed, bailed out? And don’t even get me started on the big bonuses executives at your bank got.
We need legislation that gets back bailout money and creates a Consumer Financial Protection Agency to provide the oversight that’s been missing for years—to give us back a little of the power in our relationships with the banks.
But there’s something else we can do in the mean time. Something you can do as an individual to get yourself out of that bad relationship with your bank, and that will send the message to the banks in a way they can understand: money.
A couple different responses to the fact that everyone but a few congressional Republicans hates Wall Street bankers, their giant bonuses, and that whole “creating an economic crisis” thing.
Some bankers held a – well, they called it a rally, but apparently it was more of a press conference – to launch an organization called restorewallstreet.com, to defend their honor:
Before the rally began, Mr. Belesis explained that he had begun thinking about forming this group in the last month or so as he heard “the repeating, relentless attacks on Wall Street.”
“I wanted the people who work on Wall Street to be heard,” he said.
Wayne S. Kaufman, the firm’s chief market analyst, alluded to the insulting and “infantile language” like “fat-cat bankers” emanating from President Obama.
“At the end of the day,” he said, “we’re citizens of the United States, too.”
Exactly how the new organization will function was left unclear, though Mr. Belesis said it would stage events and put up signs.
Indeed. The problem with this country is that Wall Street hasn’t been heard enough. Working people making $50,000 a year get so much more of a platform than bankers making millions in bonus alone.
Not everyone on Wall Street is jumping up and down looking to make noise. Some of them are trying to go under the radar—but that doesn’t mean they plan to change anything beyond how ostentatious they are about their luxury purchases:
As much as Wall Street executives are seeking value, decisions are also based on whether they (and their new possessions) can hide in plain sight. A case in point: Manhattan Motorcars offered two lease programs in December, each costing about $100,000. The first was a one-year lease for a Rolls-Royce Phantom Drophead Coupe with embroidered headrests and a brushed steel hood. The second was a three-year lease for a Bentley Flying Spur or GT convertible, both of which are more understated than the Rolls.
Brian Miller, the owner of Manhattan Motorcars, said the Bentleys were more popular with Wall Street executives, not because they were less expensive, but because they attracted less attention. “They said they wanted to tone down their exposure and get something more staid and sedate,” Mr. Miller said. “Later on they said they could come back and get something flashy.”
These, bear in mind, are the people who are going to be trying to convince us all that a Financial Crisis Responsibility Fee would be super-unfair, and would leave them no choice but to pass it on to the consumer. Because clearly they, the bankers, have already been cut to the bone.
The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see our chart here.
Granted, not all of these funds have been used – but they could have been. Imagine if even a quarter of this money had been spent on job creation and helping small business entrepreneurs get loans? Instead, billions were shoveled into banks who responded by refusing to loan the rest of us money, while handing out bonuses to the same guys who drove the financial bus over the cliff.
MOJO also takes a look at the behavior of the banks in: Too Big to Jail?
MAYBE WALL STREET should open a casino right there on the corner of Broad, because these guys simply cannot lose. After kneecapping the global economy, costing millions their homes and livelihoods, and saddling our grandchildren with massive debt—after all that, they’re cashing in their bonuses from 2008. That’s right, 2008—when amid the gnashing of teeth and rending of garments over the $700 billion TARP legislation (a mere 5 percent of a $14 trillion bailout; see “The Real Size of the Bailout”), humiliated banks rolled back executive bonuses. Or so we thought: In fact, those bonuses were simply reconfigured to have a higher proportion of company stock. Those shares weren’t worth so much at the time, as the execs made a point of telling Congress, but that meant they could only go up, and by the time they did, the public (suckers!) would have forgotten the whole exercise. It worked out beautifully: The value of JPMorgan Chase’s 2008 bonuses has increased 20 percent to $10.5 billion, an average of nearly $6 million for the top 200 execs. Goldman’s 2008 bonuses are worth $7.8 billion.
And why are bank stocks worth more now? Because of the bailout, of course. Bankers aren’t being rewarded for pulling the economy out of the doldrums. Nope, they’re simply skimming from the trillions we’ve shoveled at them. The house always wins. Indeed, 2009 bonuses are expected to be 30 to 40 percent higher than 2008’s.
Meanwhile, the unemployment rate creeps higher and higher, as does the number of home foreclosures. It sure is nice of us working folks to go broke, so the bankers don’t have to.
Yesterday, Working America received a whole bunch of angry faxes from Wells Fargo.
Only, the anger was ours—they just couldn’t think of anything better to do than try to send it back to us. We had asked our members to let the big banks know that we’re angry that they’re handing out giant bonuses to executives while millions of unemployed working people struggle. We’re angry that hundreds of billions of dollars in taxpayer money went to bailing out the banks, and now they’re opposed to the regulations that would protect us from future financial crises.
We offered members a sample letter or the opportunity to write their own. Our sample letter read:
This is your final notice. You’ve gone over the line too many times—and made it clear you’ll keep going over the line until someone stops you.
We’ve had enough with the greedy and reckless abuses on Wall Street. Now, with 10 percent unemployment and families losing their homes to the mortgage crisis that Wall Street created, we hear that bank executives will be taking home six- and even seven-figure bonuses—bonuses made possible by our tax dollars.
It’s past time that the interests working people in the real economy are put before those of reckless CEOs. Wall Street has made clear that it will not rein in its own excesses. That means that the only way to restore balance to the American economy is for the government to rein in Wall Street.
That’s why I’m calling for my senators to support legislation that:
1) Gets back the bailout money through a Financial Crisis Responsibility Fee on the largest banks and those that have taken on the most debt.
2) Creates a Consumer Financial Protection Agency to provide the oversight that’s been missing in recent years. The regulators we trusted to protect consumers from Wall Street risk-taking have failed us, and it’s time for a new, independent watchdog agency.
Thousands of Working America members sent faxes telling the banks how angry they were—and we emailed their letters to their senators as well. Wells Fargo, which recently gave $25 million in stock bonuses to just four executives, apparently didn’t like hearing how angry people were.
So they faxed the letters they got back to us. Now, we knew the letters had been sent, so we can only figure they wanted to let us know it bothered them. If you’d like to send a letter to Wells Fargo and other banks that have been announcing huge bonuses for their executives, you can do so here.
We really don’t mind getting a few more faxes from Wells Fargo.
The bank bonus season, that annual rite of big money and bigger egos, begins in earnest this week, and it looks as if it will be one of the largest and most controversial blowouts the industry has ever seen.
Bank executives are grappling with a question that exasperates, even infuriates, many recession-weary Americans: Just how big should their paydays be? Despite calls for restraint from Washington and a chafed public, resurgent banks are preparing to pay out bonuses that rival those of the boom years. The haul, in cash and stock, will run into many billions of dollars.
Industry executives acknowledge that the numbers being tossed around — six-, seven- and even eight-figure sums for some chief executives and top producers — will probably stun the many Americans still hurting from the financial collapse and ensuing Great Recession.
Goldman Sachs is expected to pay its employees an average of about $595,000 apiece for 2009, one of the most profitable years in its 141-year history.
Is that what Goldman’s Chairman and CEO Lloyd Blankfein calls “doing God’s work”?
The Sunday Times piece continues:
Workers in the investment bank of JPMorgan Chase stand to collect about $463,000 on average.
Some Wall Street executives may be envious of the compensation being handed out at one of the banks on Main Street: Wells Fargo. Its chief executive, John G. Stumpf, is set to make as much as $18.4 million for his service in 2009, even though his bank took $25 billion in government aid (which was repaid at the end of the year) and it had to write down billions of dollars in bad loans made during the boom years.
Major US banks are gearing up to announce annual bonuses for top executives while bracing for a political firestorm over compensation practices that critics say fueled the global financial crisis.
John Coffee, a Columbia University law professor and corporate governance specialist who has testified before Congress on executive pay issues, said many banks scrambled to repay government bailout funds before the end of 2009 to be free from limits on bonus payments.
“There are some (executives) who did not receive bonuses they thought they were entitled to last year, and now want to be compensated” with larger bonuses, Coffee said. “The culture has not changed.”
Perhaps we could learn a thing or two from Europe, where some countries, including the UK and France, are imposing one-time taxes on financial industry bonuses.
The French government intends to raise €360m from its proposed windfall levy on bonuses paid out by banks based in France, according to Christine Lagarde, finance minister.
The figure is slightly higher than expected and reflects the predictions of French banks that they are likely to pay out bonuses in full – and absorb the cost of the tax – if that is what banks in London do.
But, according to reporting this morning from UPI, the U.S. isn’t likely to follow Europe’s lead by taxing bonuses:
Administration officials said President Barack Obama is considering a fee for large U.S. banks to make up for losses in the $700 billion bank bailout program.
Reportedly, Obama’s team has already rejected a tax targeting bank bonus checks and a tax on bank transactions.
The virus known as H1N1 (or swine flu) has been found in nearly every country now. President Obama declared it a national emergency on October 23. This declaration allows HHS Secretary Sebelius to waive certain requirements under Medicare and Medicaid, privacy rules and other regulations.
“The H1N1 is moving rapidly, as expected,” White House spokesman Reid Cherlin said Saturday. “By the time regions or health-care systems recognize they are becoming overburdened, they need to implement disaster plans quickly.”
The Centers for Disease Control and Prevention reported on Friday that the flu was spreading widely in at least 46 states and had already caused the hospitalization of at least 20,000 Americans. More than 1,000 deaths have been attributed to the virus and more than 2,400 additional deaths were probably associated with it, officials said.
According to the CDC website, these groups should receive H1N1 virus first:
These target groups include pregnant women, people who live with or care for children younger than 6 months of age, healthcare and emergency medical services personnel, persons between the ages of 6 months and 24 years old, and people ages of 25 through 64 years of age who are at higher risk for 2009 H1N1 because of chronic health disorders or compromised immune systems.
With those guidelines in mind, the fact that Wall St. firms (the same ones bailed out by US taxpayers, the same ones who gave themselves huge bonuses as they were failing) have been given H1N1 vaccine is creating some outrage.
“Frankly, it is astonishing that in the face of widespread shortages, the CDC has seen fit to approve distribution of the H1N1 vaccine to Wall Street firms not known to be populated by those in the highest risk categories,” CREW Director Melanie Sloan wrote to Sebelius on Nov. 5.
And
“Although CREW has been unable to uncover the demographic makeup of Goldman Sachs, Citigroup and JP Morgan Chase, surely it is safe to assume the vast majority of their employees are not pregnant women, infants and children, young adults up to 24 years old, and healthcare workers,” Sloan added.
The most ethical company in the bunch appears to be:
Morgan Stanley — which also has returned the $10 billion it got from the bailout — received 1,000 doses of the vaccine for its New York and suburban offices, but turned over its entire supply to local hospitals when it learned it received shipments before some area hospitals, spokeswoman Jeanmarie McFadden said.
These companies already have huge image problems, and this is certainly not going to help. You know you’re in PR trouble when SNL gives you the treatment:
