This morning I told my wife I was sure that the Wall Streeters would be pulling down big bonuses this year, despite the fact that, objectively speaking, they’re performance has not been, shall we say, all that great. Via Americablog, I see that I was right, but that particular prediction was like shooting fish in a barrel. The story is from the Guardian. Some highlights:
Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year – despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.
…
The sums that continue to be spent by Wall Street firms on payroll, payoffs and, most controversially, bonuses appear to bear no relation to the losses incurred by investors in the banks. Shares in Citigroup and Goldman Sachs have declined by more than 45% since the start of the year. Merrill Lynch and Morgan Stanley have fallen by more than 60%. JP MorganChase fell 6.4% and Lehman Brothers has collapsed.
At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank.
The Free Market at work, I guess. Since the market is making it happen it is right and just that it should happen. Lest we forget, according to John McCain, the real cheaters would be middle class people who might benefit from Obama’s proposed tax cuts, which would be nothing else but welfare.
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