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bucheon bum
Joined: 16 Jan 2003
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 Posted: Sun Apr 26, 2009 12:43 pm Post subject: All is well on Wall St! |
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After a Pause, Wall St Pay is Bouncing Back
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Workers at the largest financial institutions are on track to earn as much money this year as they did before the financial crisis began, because of the strong start of the year for bank profits.
Even as the industry�s compensation has been put in the spotlight for being so high at a time when many banks have received taxpayer help, six of the biggest banks set aside over $36 billion in the first quarter to pay their employees, according to a review of financial statements. |
Should have let them fail. What a crock of shit. |
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue May 05, 2009 5:37 am Post subject: |
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http://www.bloomberg.com/apps/news?pid=20601087&sid=aye5Fzy0L_ss&refer=home
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Wall Street Firms Will Revert to Pre-Crisis Model, Cohen Says
May 5 (Bloomberg) -- Wall Street, after getting billions of taxpayer dollars, will emerge from the financial crisis looking much the same as before markets collapsed, said H. Rodgin Cohen, chairman of law firm Sullivan & Cromwell LLP.
�The system will look more like what preceded the current environment than many people seem to believe,� Cohen said yesterday at a panel discussion on the future of Wall Street sponsored by Bloomberg News in New York. �I am far from convinced there was something inherently wrong with the system.�
Cohen, 64, joined Lazard Ltd. Deputy Chairman Gary Parr, 52, and Carlyle Group co-founder David Rubenstein, 59, in discussing the industry�s future after the deepest financial crisis since the Great Depression forced the government to take equity stakes in hundreds of financial institutions. The panelists projected a future led by core banking and lower risk for established firms.
�There�s a good chance there are five to seven or eight global institutions, of which three or four will be clear winners and then some others will be good, doing full-service banking and securities business sort of as we knew it five years ago,� Parr said. They will operate �with a lot lower return on equity and a lot lower risk profile,� he added.
Banks and other financial institutions reported more than $1.37 trillion in writedowns and losses since the mortgage markets collapsed in 2007, and Parr said more are ahead. �There is still hundreds of billions of dollars of losses to be realized at a number of financial institutions,� he said. �There will be a need for substantial capital raising.�
Wall Street �Reshaped�
Rubenstein said that while Wall Street will likely rebound after the recession, competition probably will emerge from global banks being formed in China and the Middle East as well as from so-called boutique investment banks at home.
�Wall Street will be reshaped,� Rubenstein said. �People once thought that American brand-name institutions could do no wrong and that if they sold a product, it was a good product, and if they said something was worth a certain value, it was worth a certain value. Now that has changed.�
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Isn't that nice. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Wed May 06, 2009 7:09 pm Post subject: |
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| Guess they want to prove that history does in fact repeat itself. |
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mises
Joined: 05 Nov 2007
Location: retired
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pkang0202
Joined: 09 Mar 2007
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| Posted: Fri May 08, 2009 7:23 am Post subject: |
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| Of course. Why change anything? They screw up again, then can count on the government to bail them out again. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat May 09, 2009 1:48 pm Post subject: |
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H. Rodgin Cohen (http://en.wikipedia.org/wiki/H._Rodgin_Cohen):
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| The system will look more like what preceded the current environment than many people seem to believe. I am far from convinced there was something inherently wrong with the system. |
Since the system has made him several hundred million dollars, I'm quite sure he is being honest when saying he sees nothing inherently wrong with it.
Krugman:
http://www.nytimes.com/2009/05/08/opinion/08krugman.html?_r=2&hpw
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Hooray! The banking crisis is over! Let�s party! O.K., maybe not.
In the end, the actual release of the much-hyped bank stress tests on Thursday came as an anticlimax. Everyone knew more or less what the results would say: some big players need to raise more capital, but over all, the kids, I mean the banks, are all right. Even before the results were announced, Tim Geithner, the Treasury secretary, told us they would be �reassuring.�
But whether you actually should feel reassured depends on who you are: a banker, or someone trying to make a living in another profession.
I won�t weigh in on the debate over the quality of the stress tests themselves, except to repeat what many observers have noted: the regulators didn�t have the resources to make a really careful assessment of the banks� assets, and in any case they allowed the banks to bargain over what the results would say. A rigorous audit it wasn�t.
But focusing on the process can distract from the larger picture. What we�re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health.
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It�s not at all clear that credit from the Fed, Fannie and Freddie can fully substitute for a healthy banking system. If it can�t, the muddle-through strategy will turn out to be a recipe for a prolonged, Japanese-style era of high unemployment and weak growth.
Actually, a multiyear period of economic weakness looks likely in any case. The economy may no longer be plunging, but it�s very hard to see where a real recovery will come from. And if the economy does stay depressed for a long time, banks will be in much bigger trouble than the stress tests � which looked only two years ahead � are able to capture.
Finally, given the possibility of bigger losses in the future, the government�s evident unwillingness either to own banks or let them fail creates a heads-they-win-tails-we-lose situation. If all goes well, the bankers will win big. If the current strategy fails, taxpayers will be forced to pay for another bailout.
But what worries me most about the way policy is going isn�t any of these things. It�s my sense that the prospects for fundamental financial reform are fading.
Does anyone remember the case of H. Rodgin Cohen, a prominent New York lawyer whom The Times has described as a �Wall Street �minence grise�? He briefly made the news in March when he reportedly withdrew his name after being considered a top pick for deputy Treasury secretary.
Well, earlier this week, Mr. Cohen told an audience that the future of Wall Street won�t be very different from its recent past, declaring, �I am far from convinced there was something inherently wrong with the system.� Hey, that little thing about causing the worst global slump since the Great Depression? Never mind.
Those are frightening words. They suggest that while the Federal Reserve and the Obama administration continue to insist that they�re committed to tighter financial regulation and greater oversight, Wall Street insiders are taking the mildness of bank policy so far as a sign that they�ll soon be able to go back to playing the same games as before.
So as I said, while bankers may find the results of the stress tests �reassuring,� the rest of us should be very, very afraid. |
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Hater Depot
Joined: 29 Mar 2005
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| Posted: Sat May 09, 2009 8:02 pm Post subject: |
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| Krugman wrote: |
| What we�re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping... |
That has quite obviously been his strategy from the beginning. |
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