Posted on 09/21/2008 3:06:14 PM PDT by LiveFreeOrDie2001
Fury at $2.5bn Lehman bonus Nomura and Barclays table bids today for US giant’s London operation as bank’s administrator likens collapse to EnronJohn Waples and Danny Fortson 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. A Chapter 11 bankruptcy document filed by Lehman Brothers Holdings Inc says that Barclays has identified eight individuals out of the New York staff of 10,000 who are vital to make the deal succeed and a further 200 who are identified as “key”. It is thought that these eight directors will be locked into two-year contracts worth between $10m and $25m a year. Related Links Paulson hailed as hero for stemming market slide A sickening slump gives way to euphoria The $2.5 billion had been accrued as part of the contribution to Lehman’s group profits for the first nine months of the year. Barclays said there is no obligation to pay it out but analysts say the competitive pressure to keep key staff means he will have to. p>
(Excerpt) Read more at business.timesonline.co.uk ...
This worried some folks, but not many, as the asset values were increasing, and not decreasing.
When the reverse happened, it took two years to come to a head, and all the while it was believed that it would certainly stabilize. Any enterprise that did not participate in these securities, were thought to be idiots. There were not very many who intentionally left profits on the table, and those that did, simply did not deal with this sort of security to begin with. Nobody saw this coming, but we did know that if Fanny or Freddie defaulted, that there would be a problem of some sort, and they tried to roll back what the Dem's had done during the latter part of the Clinton administration. All efforts were rebuffed by pulling out the race card, and Bush was further politically damaged, as was the Republican party, all leading to the losses in 2006.
At no time, through this entire mess were the financial people responsible for the rules they had to work under. Congress set those rules and set the effort to put poor people, and people with bad or no credit in homes under the community development act.
The financial sector was tasked to support it, and they did.
The only rules that apply to good financial management are those that keep a company out of trouble. What you are saying is that because it was legal, it was OK for management to put the company at risk of collapse.
Your position is totally absurd. And so is your statement that no one saw this coming. Plenty of people did and warned about it. Not just two years ago but five years ago.
Those that did not heed the warnings having driven their companies out of business or to the brink.
Yes, some institutions took a conservative view during the boom. They took a responsible positions and the companies they managed are relatively sound.
I am not sure how much further we need to go with this conversation.
You say because it was not illegal that it was OK to flirt with fiscally promiscuous behavior. And that management would have been fools not to take the profits.
I say it was the height of irresponsibility for those in charge to have acted as they did. That proof is clearly evident in the current state of affairs.
Instead of rewarding these people and making excuses for them as you advocate, I say they should be out of a job with no bonus and where they breached their fiduciary responsibilities they should serve time in jail.
One day corruption in this country will end or we will be in a total collapse...if we are not already there.
It has not gone anywhere, nor will it ever.
You have a very typical naive idea of capitalism and how it works. Illegality is the regulatory function that we use to control what is essentially a gambling enterprise. It always has been and always will be as investment is risk.
You are attacking the central premises of the system and thinking it could somehow be different or more moral in your eyes.
It is what it is. It's a system that seeks profit through ingenuity and guts. The losses are accepted as risk and it is how the game is played.
Government through regulation must strike a fine balance or the fire goes out, or gets too big. It is not the system that regulates this, it is the government.
Without regulation, it always goes to extremes and self destructs, just like a unregulated casino.
Congress opened the Pandora's box by not only encouraging, but forcing the system to do something. And it did. It could have been moderated years ago, and we tried and failed, due to Congress, not the Financial system.
Free democracy, or in our case a Republic, must have a financial system for growth. It is how everything works, and the responsibility to regulate it lies with the American people through it's congress critters. That responsibility failed due to a list of political reasons, mostly correctness and racial allegations. It's a fact.
The system did what it does and did it very well. it had to spread that assumed risk out among as many institutions as possible. All warnings aside, the buck for changing or regulating that effort lies solely in the halls of congress as the Admin did try to ring the warning bell and put forth proposals.
OK, I have said the same damn thing in as many ways as I could come up with, and I am done.
Have a nice day.
You have a nice day as well. See you on another issue in which I am sure we will agree. FReepRegards!
I hear ya', however...
.22 or less can handle a weasel formidably. ; )
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