Posted on 09/21/2008 9:08:36 PM PDT by Tulsa Ramjet
STAFF at Lehman’s New York office who helped to cause the world’s biggest corporate bankruptcy are to share in a $2.5 billion bonanza.
The bonus, which has been described by London staff as a “scandal” has been pledged by Barclays Capital, the British-based bank that last week acquired Lehman’s American operation and took on 10,000 staff.
The $2.5 billion (£1.4 billion) pot, which has been ring-fenced as part of the acquisition, has caused huge resentment among the 5,000 staff in the firm’s European and Middle Eastern operations who are not guaranteed to be paid after this month. There are, however, hopes that half the jobs in Lehman’s Canary Wharf office could be saved today by either Barclays or Nomura. Bids are being submitted for its UK equities and investment-banking business.
(Excerpt) Read more at business.timesonline.co.uk ...
I think they all should be investigated and if they broke the law should be tried and convicted and sent to jail Im old fashioned I guess
I have a hard problem with officers in a publicly owned company that can bail out with a golden parachute, when the rank and file employees and trustworthy investors get screwed. If efforts are discovered that some officers tried to telegraph the problems to no avail, then those guys and gals should be retained. You have to have a heart to understand that you are ruining peoples’ retirements and families. Its sociopathic.
Perhaps financial terrorism should be a recognized crime and these execs, no matter their positions, be executed for their economic crimes and for being grossly immoral, greedy bass-scats.
Lehman’s is NOT being bailed out by the US Government they went bankrupt. They are being bought by other companies, If Barclay’s bank is stupid enough to pay them so be it. But maybe we can seize it eh?
This is all too big for me to understand.
Sounds like something they would do in the USSR.
maybe you are right.
I’m just pissed. Deregulation under Clinton in 1999 just had some reprocussions that no one anticipated. Everyone just wanted to push the envelope. I keyboardally overreacted. But....yes the infamous but,...there is no doubt, our economy was moving on a train the wasn’t on a track. Everyone wanted to qualify people to by a home who had no business buying a home, refying a home, or trying to flip a home. Problem is, if nobody is buying a home, Home Depot gets hammered, Walmart gets hammered, the independent landscaper gets hammered. It took us nine years but the chickens have come home to roost. Just like the dot.com bust in the nineties, skyscrapers built on rice krispies. but hey, we laid the digital pipeline to India. That’s worth something to someone.
It’s not only too big, it is just mentally wearing. When can we just start living again, rather than just being wore out? Or is perpetual stress the new state of mind?
This bonus isn’t going (primarily at least) to Lehman’s officers, it’s going to the rank and file employees in the New York office that Barclays is buying. This is a business where the most valuable assets are the people, and the last thing Barclays wants to do is buy the broker-dealer business and lose any employee who can get an offer elsewhere (naturally, the most valuable ones).
The Justice Deptartment needs to have a fire lit under them to begin such investigation. I understand that under RICO statutes their property, on indictment, can be seized. This could make them want to cut deal and tell prosecutors where the congressmen are culpable. It seems that nothing less than this kind of shakeup could yeild anything more than the coverup which you described earlier.
if so, I stand corrected. thank god for rational exhuberance with the emphasis of accuracy. I think all sectors of real estate got sucked into this one. U.S. commercials banks wanted to compete with international banks and sleep in the bed we make.
Thanks for clarifying that. The main company is bankrupt and closest bar, Tonic, threw a going away happy hour last Friday for Lehman employees.
Employees of the broker dealer, for which Barclay paid just 250 million, are ok and are being kept for 3 months. During that time, Barclay will determine long-term staffing needs, but it looks like most people not in Fixed Income will keep their jobs.
Course, Bear employees had a sweet deal, with their Fixed Income dept. being desired the most, but my contacts there are telling me of stealth layoffs. Also, with the current market conditions, there is not a lot of securitization going on at the moment.
“This is a business where the most valuable assets are the people”
I agree that a successful businesses people are their most valuable asset but this business went belly up. The stockholders who put their money at risk are loosing but the failures are getting rewarded.
Seems wrong to me.
Lehman’s is NOT being bailed out by the US Government they went bankrupt. They are being bought by other companies, If Barclay’s bank is stupid enough to pay them so be it. But maybe we can seize it eh?But Barclays will be at the front of the line to have their bad mortgages bailed out. I think the whole industry is being bailed out and they should all be treated that way. When we have a bad year at work my bonuses aren't so hot.
This division was the crown jewel of Lehman Brothers. It made money up until the last day. It never failed the company. the bonus cash was a set-aside for the exact purpose intended. Bonuses earned.
Barclay's bought this knowing it takes people to make it work. people are assets in this business and you don't screw them.
And I doubt they will.
This bonus shows how confident the financial mafia is that we the people can do nothing to them. It is a collosal PR mistake.
We will use it against them 100 fold.
It is my understanding that money transfers up to a year before a bankruptcy can be “backed out”. This is done so that someone can’t transfer money that should go to creditors.
I can’t see how so called bonus money isn’t something like an improper transfer but then the bankruptcy laws were changed with big help from Joe Biden on behalf of his constituent big banks in Delaware so maybe bonus payments are excluded.
It’s probably the right time to institute penalties for Wall Street criminals and their enablers in Congress - why on earth must tax payers continue to pay the price for Congress and Wall St.’s corruption?
You are also correct. Don’t forget, these people were dropping bricks last Monday when they heard of the bankruptcy, so anything is possible. As a mitigating factor, some facets of the business were making money, such as Equity trading. The Mortgage Capital division (which once had 11 companies, including one in Korea) was merged into the Fixed Income division at the beginning of September. The Mtg division is responsible for a significant portion of the bad debt/loans that helped bring Lehman to its knees.
My sources tell me that some people are pretty grim other there, while some others are happy that Barclay is picking up the pieces.
Barclays was smart enough not to buy the whole company last weekend, and so I suspect they were smart enough to pick out the good businesses (with employees still worth keeping) and largely avoid the bad when they ended up making a bid.
At least in the draft of the bill I saw, the bailout is only available to companies headquartered in the US. I’m not sure whether this will practically prevent them from participating, but it may.
Ihope I’m right, Barclay’s and others; From Rueters:
“LONDON: Barclays will put in an offer for parts of Lehman Brothers’ European business on Sunday to meet an indicative deadline set by administrators, a person familiar with the matter said.
Barclays bought Lehman’s core U.S. broker-dealer business in a $1.75 billion (955.9 million pound) deal on Tuesday, and executives said they would consider buying more Lehman assets outside the United States, such as some equities and equity capital markets businesses in Europe.”
So Lehman’s is being sold piecemeal, what isn’t being bought are the bad loans but they do have property attached to them. The loans will probably be the last things to be auctioned to pay the creditors. Total Lehman debt is $613 Billion with about $150 billion in corporate bonds.
If they bancrupt the company they are obviously idiots who deserve to lose everything.
“transitioned out, or thrown out”????
How about jailed?
It always has been. Before it was economics, it was polio, war, famine...
Life's been so good for so long that people have forgotten that some kind of hard times are always just around the corner.
IIRC, Barclays is even named in the bill that Bush is sending to Congress this week as one foreign bank that could be included in the Sec Treasury’s give-away.
The money is fungible.
No. Barclays let Lehman fail, and then bought the good stuff. The crap is in the hands of the remaining insolvent entity, and is not subject to the bailout.
If someone thinks I'm wrong, please correct me.
If this were you or I and our creditors (and/or the courts) found out we were sitting on $2.5 billion while filing for bankruptcy..................
Deregulated by Clinton in 1999 and PUSHED by GWB in 2002. The financial institutions responsible for delivering the subprimes to the poor and illegal aliens did so at the behest of GWB, who has been pandering to illegal aliens since day one. Can’t easily round up and deport millions of illegal aliens if they are homeowners and IMO that was part of the agenda. Besides, destroying our economy will also make swallowing the NAU/Amero pill more tolerable.
President Calls for Expanding Opportunities to Home Ownership
http://www.whitehouse.gov/news/releases/2002/06/20020617-2.html
Not as bad as it seems
http://www.google.com/search?hl=en&q=illuminati+jokes+rogue+trader
Not pushed by GWB, but encouraged.
The industry was making loans to people with very little if nothing down.
there’s nothing wrong with pushing loans, but the underwriters who are supposed to protect the mortgage industry failed miserably, and then fannie mae and freddie mac failed in validating the failure by buying them. Everyone was making money so nobody cared.
Its a rather unique way to make a living: Run your corporation poorly, make YOUR money, and then when the spigot finally shuts down, and then have the govt tax the american people to prop up your bleeding firm, because such a failure would be catastrophic for the economy.
Fire them all and pull back their pay and bonuses made over the past two years, thus no taxes.
“My sources tell me that some people are pretty grim other there, while some others are happy that Barclay is picking up the pieces.”
There is no upside for the taxpayer and shareholder in this mess. The top dogs will still come out as hero’s to the financial class. When you get to a certain level and one division fails it should fall on you like a ton of bricks instead of expecting me to protect your assets and houses in the Hamptons, Vail, etc. I want suffering and pain in payment for my dollars since I won’t see any of the upside only the bills. I don’t get any slack when I make the wrong investment.
I am beginning to think they are hiring the criminal class instead of the best of the class on WS. There is too much Tony Soprano and not enough Warren Buffet in these people. It’s never their fault except when they make a profit and then you get your own TV show (a little Jim Cramer dig). The Used car business is missing a lot of players.
For Barclay’s charge prime + 5% loan secured by real estate with a current value 200% over the loan amount.
You know, before Enron, in China, there was a similar situation. The majority of them got life in prison and the others were sentenced to death.
At least in the draft of the bill I saw, the bailout is only available to companies headquartered in the US.It's already been fixed. Foreign firms are now included in the bailout.
No. Barclays let Lehman fail, and then bought the good stuff.I think Barclay's has its own share of bad loans to dump.
2.5 billion dollars? unbelievable
PUSHED by GWB in 2002.Right. The "ownership society" was such a success they have to go take it back now.
That's possible....
Sounds like something they would do in the USSR.
The ChiComs do it all the time.
IIRC, Didn't the government have their hands in banking, finance, and private business over there too? At least they had a swift way to deal with the scum. Over here they just get golden parachutes and get right back into their sleazy game.
Lehman’s moved all funds in London back to the US before filing leaving its EU employees no way of getting paid. The Brits are a but pissed off at this.
Problem is, a bunch of banks folded in just a few days, with some bailed out, some bought out, and some bankrupt - enough detail that the general public views it as all part of that $700B taxpayer-funded spendfest. Ergo, the visceral resentment of the reported $2.5B bonuses - proximity is enough that taxpayers can’t really tell whether it’s coming out of their pockets.
Put them ALL on the GS Schedule.
If MY taxpayer $$ pay their salaries, the LEAST they can do is be paid like Federal employees.
Oh, that’s right! My bad!
Please ignore my previous post.
once all that’s done, treat them like the Chinese did to the head of their version of the FDA for taking bribes.
Thanks for revealing your position. It's illuminating.
Gross negligence rewarded.
Some "conservative" position. Hah! Personal responsibility and competent business practices are dead. Long live sloth and usury.
I'm glad to see your brain works in binary.
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