Monday, October 20, 2008

I don't want to beat the system

I just want the system to work.
We shall see.
There are many things that all the world is watching at the moment. and many things we're all involved in.............
Our own little dramas loom large and prevent any sort of critical eye.
Reflect on these little tidbits;
Despite (and because of) the meltdown in the value of the company, and the very public bailout at the leisure of taxpayers around the globe, the payouts to Morgan Stanley senior managers for this year (2008) is, taken together, worth more than the capitalisation of the bank.
In short, if they club together, they can buy the bank they destroyed.
And reap untold millions while people watch their pensions melt away.
And lose their houses.
And start from scratch at age 55.
The Masters of the Universe win again.
You the tax payer are helping them do it.

See what happens (and how you feel) next year when your council tax , state tax, or income tax hits your pay check.
You think this whole thing won't bite you in the ass????
If you don't already feel the pinch, you will, believe me.
It would be funny if it wasn't so bloody tragic.
The Upper-East Side embraces nationalisation of the bastion of capitalism, Wall street.
They get to keep the $1million condo.
All is well and the little people can eat cake.
It's gonna be hard to lecture the Chinese about liberalising markets from here on........
Dear me, you just couldn't make this stuff up.

There are plenty of folks who believe that this is the way it works.
The rest of us just don't understand. (But we're stuck with the bill)
The system isn't working.
I'm about to leave a 50% + tax regime and going somewhere that this isn't an option.
Does that make me feel better?
The bankers in HK are as self righteous as they are in London and NYC.
Meanwhile the drip feed of dying kids from no hope towns goes on and on....but it's now just across the bottom of the screen, never the main story.
Who's thinking about Iraq or Afghanistan now?
Four more families in the UK are as of today...... Think about what it will be like around those family Christmas tables this year.
If Obama gets elected, will it be a change we can all believe in?
Let's see.
Problem is for the Morgan Stanley guys, things COULD change if a Hussein gets to the White House.
Hanging chads anyone?


Anonymous said...

Difficult one this, because contractually if, as employees, they have hit whatever insanely low non-performing targets they have/were set, then they are probably "entitled" to their bonuses. So we have to separate remuneration of employees under contract (which would already have been allocated as a liability on the accounts, I guess) from the bung to capitalise the business.

Probably cheaper to pay out bonuses than deal with any employment litigation that could ensue were bonuses not paid; particularly in the US.

The rich get richer (probably cleaning up while property and share prices are low); the poor are always with us?

But, as far as the UK is concerned, as yet I don't see anything like the grinding poverty that we had in the 80's and early 90's, particularly in the North, so that is a plus.


Terry said...

No, sorry...If the company you work for is bankrupt ( and has shareholders for god's sake!!)
Especially as the gov't bailout tax money will be used to pay those mega-money something-for- nothing gifts. If they went bankrupt, they'd get nothing....right?
Think of the taxpayer/gov't as a creditor... no payout then or is there some sort of "banker get out clause?
Maybe bankers work under different set of rules than the rest of us....They get paid regardless of the money they generate.

Anonymous said...

Right on Terry!


Anonymous said...

I agree it is outrageous, but unless the company's board blocks payment of bonuses, which is akin to turkeys voting for Christmas, or the shareholders revolt, which surprisingly doesn't seem to have happened, then the pay out ensues.

And yes, the financial service companies are different, if they fall they can take the rest of the economy with them, as we have seen, so we are held to ransom.

NB In my personal and painful experience, the gov't (Inland Revenue) takes precedence as creditor.


Anonymous said...

I am rather peeved by civil service pensions being funded WHOLLY out of taxes.


Anonymous said...

The backlash has begun, from today's Times:

AIG agrees to freeze payments to ex-CEO Tom Bawden in New York
American International Group, the US insurer that was recently bailed out by the government, agreed to freeze any payments that had been due to Martin Sullivan, its former British-born chief executive, whose contract calls for $19 million plus other benefits.

AIG, which has received $122.8 billion of government loans to stave off bankruptcy, has also agreed with Andrew Cuomo, the New York attorney general, to freeze the $600 million deferred compensation and bonus pot of its financial products unit. Joseph Cassano, the former head of that unit, is thought to have a share of about $69 million in the pot.

Mr Cuomo, who was instrumental in negotiating the freeze, said: "The American taxpayer is now supporting AIG, making the preservation of these taxpayer funds a vital obligation and priority responsibility [of the company].”

He added that the financial products unit was "largely responsible for AIG’s collapse".

In a letter to Edward Liddy, AIG’s present chief executive, Mr Cuomo said: "To be clear, it is my position that until the taxpayers are repaid with interest the more than $120 billion that has been used in the rescue financing for AIG, no funds should be paid out of these pools to any executives."

"As AIG recovers using taxpayer money, these pools should not be used to reward executives ahead of taxpayers."

"I believe that rebuilding trust in our capital markets requires executive compensation packages that are rational, fair and based on bona fide performance measures that are disclosed to the public," Mr Cuomo continued.

"We must ensure that executive pay package structures no longer create improper incentives for executives to over-leverage their companies and manipulate the books for their own short-term financial benefit."

Last week, AIG agreed not to make a payment – thought to be about $10 million – to Steven Bensigner, AIG’s departing chief financial officer.