Today in the economy

[Kirkland Laing]

They arent really rewarding failure right now,unlike Bush who wanted it no ties attached for the same bailout,Obama put a rider in that limits executive pay for banks asking for bailout money.
In other words,short of the execs being fire by the banks in question,their pay is being governed and if the banks wont themselves wont punish their own piss poor governance,Obama has put it in,that the government will,or no damned money.

Salary is only a tiny fraction of total earnings for bank executives. It's just a cosmetic announcement, won't have any real effect on executive earnings. Unfortunately as far as the financial crisis goes the Obama administration looks like a Bush administration third term.

Not even close son
I mean here's the ballpark,and here there is you,youre not in it
Apparently between you and Lyle,there's liberal,conservative,and Ive got to sit here being the realist

Hank Paulson was Bush's last Treasury Secretary. His highest ever official salary was around a million dollars a year but that's just walking around money when you live in Manhattan, send your kids to school there etc. When he retired he had over $700 million in th bank.

We can watch and see how much the execs of banks who are taking government welfare continue to earn over the next few years. I should get a nice piece of quote art or two out of it.

[Trainer Monkey]

Salary is only a tiny fraction of total earnings for bank executives. It's just a cosmetic announcement, won't have any real effect on executive earnings. Unfortunately as far as the financial crisis goes the Obama administration looks like a Bush administration third term.

Not even close son
I mean here's the ballpark,and here there is you,youre not in it
Apparently between you and Lyle,there's liberal,conservative,and Ive got to sit here being the realist

Hank Paulson was Bush's last Treasury Secretary. His highest ever official salary was around a million dollars a year but that's just walking around money when you live in Manhattan, send your kids to school there etc. When he retired he had over $700 million in th bank.

We can watch and see how much the execs of banks who are taking government welfare continue to earn over the next few years. I should get a nice piece of quote art or two out of it.

Walked away with
As in past tense

[Kirkland Laing]

Not even close son
I mean here's the ballpark,and here there is you,youre not in it
Apparently between you and Lyle,there's liberal,conservative,and Ive got to sit here being the realist

Hank Paulson was Bush's last Treasury Secretary. His highest ever official salary was around a million dollars a year but that's just walking around money when you live in Manhattan, send your kids to school there etc. When he retired he had over $700 million in th bank.

We can watch and see how much the execs of banks who are taking government welfare continue to earn over the next few years. I should get a nice piece of quote art or two out of it.

Walked away with
As in past tense

Large banks like Citi that have large brokerage and M and A divisions have modelled themselves and their executive compensation on investment banks like Goldman as over the past couple of decades the investment banks have been making all the big money. And the investment banks only exist to reward the talent that runs them. Goldman for instance share over 75% of all their profits among their partners (and it used to be 100% till the partners sold off a chunk of their firm in stock to make themselves even more money.)

Goldman has a hundred of so guys with a small share and another fifty or so with a larger share. At the end of the year they divvy up six or eight billion between them (that's roughly the Goldman yearly profit over the past few years.) Now these guys earn depending on how much they earned the firm. And in a dog-eat-dog world if some superstar lower in the firm (or a partner or rising star elsewhere) has outperformed the Goldman guy in his field then the existing guy may get the push from his partnership after years of climbing the greasy pole. People get partnerships if they bring a lot of investors with them, etc.

So individuals move from firm to firm earning on the basis of what they bring in, investors/firms who'll follow them from place to place as they trust their expertise in their field. These indiviauals will actually ask for the lowest salary possible (living expenses for twelve months usually) so that their earnings can be paid to them in other ways, deferred salary, company stock etc. That's so that it can all be taxed at a far lower rate than their salary is. They'll pay 45+% of their salary in taxes when you include NY State taxes but in the low teens on everything else.

And if they really did make a serious attempt to keep overall compensation for executives at welfare banks to a million a year then the firm's moneymakers will up sticks, taking their expertise/clients/investors to other firms and the government will be left with a shell of a firm that doesn't make any actual profits anymore as their profit-drivers have all buggered off leaving a profitless mountain of debt and disaster for the government to deal with. So the government has no choice other than to let these banks, which it will eventually own and need to run, staffed by people who can make some money when it does take them over.

[VictorCharlie]

Okay once you've nationalized the banks and cleared out the toxic assets how do you go back to private ownership? Do the CEOs and board members keep their jobs?

[Kirkland Laing]

Okay once you've nationalized the banks and cleared out the toxic assets how do you go back to private ownership? Do the CEOs and board members keep their jobs?

No, they all get the sack. The shareholders get wiped out too. The government cleans up the debt and raises as much as it can to offset the debt by creating new bank stock in the nationalised bank, which is then sold to investors. The governmwent just took over two banksa t the weekend and is in the process of doing this to them as it has with almost twenty this year and lots more to follow.

TM, some bankers will end up working for a million or half a million or whatever the government sets as a cap. There are plenty of unemployed bankers and some of the ones currently at risk of getting a government paycut will accept it as the alternatives are less attractive. This will give the government a bunch of people to point to and say see, we've done what we said we would on executive pay. But most will move to greener pastures. The govt. will actually make loopholes so they can keep as many talented people working for the welfare banks as they can.

[VictorCharlie]

So why the hell didn't we just do this from the start and not spend 700 billion and counting

[killersheep]

3/2/09

Canada - GDP

Actual-1.00%|Forecast-0.70%|Previous-0.70%

Gross Domestic Product (GDP) determines the total worth of all goods and services produced by the economy. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably as it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the country's currency. An upward trend has a positive effect on the country's currency.

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USA - ISM Manufacturing Index

Actual35.80|Forecast34.00|Previous35.60|


The Institute of Supply Management (ISM) Manufacturing Index determines the activity level of purchasing managers in the manufacturing sector, with a reading above 50 indicating expansion. To produce the index, purchasing managers are surveyed on a amount of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely as purchasing managers, by virtue of their jobs, have early access to data about their company’s performance, which can be a leading indicator of overall economic performance. A rising trend has a positive effect on the nation's currency.

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Australia - Retail Sales

Actual0.20%|Forecast-0.50%|Previous3.80%|

Determines the worth of sales at the retail level. Traders pay close attention to Retail Sales as it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises. A rising trend has a positive effect on the nation's currency as Retail Sales make up a large portion of consumption, which is a key driver of the economy and has a sizable impact on GDP.

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Australia - Interest Rate Statement

Actual3.25%|Forecast3.00%|Previous3.25%

Each month, excluding January, the Reserve Bank of Australia (RBA) Board meets to set the nation's short term interest rate (i.e., "cash rate"). The Board announces the decided rate shortly after the meeting, and when there is a change in rates they also releases a statement that contains the economic conditions that effected their decision. The primary objective of the central bank is to achieve price stability; when inflation rises above an annualized rate of approximately 3%, they will respond by raising interest rates in an attempt to bring prices down. A rising trend in interest rates has a positive effect on the nation's currency. Short term rates are the paramount factor in currency valuation; traders look at most other indicators merely to predict how interest rates may change in the future. High interest rates attract foreigners looking for the best "risk-free" return on their money, which can dramatically increases demand for the nation's currency. The decision on where to set interest rates depends mostly on inflation.

[Kirkland Laing]

So why the hell didn't we just do this from the start and not spend 700 billion and counting

Because America is a corporate socialist economy. Since this crisis started the welfare of the banks' shareholders and bondholders has been the main priority of both the Bush and Obama admins.

Today's AIG bailout is part of that too. AIG insured hundreds of billions of mortgage securities from default, now they've all defaulted and so AIG has to pay out on them and they don't have any cash left so the government has to pay. If the govt. doesn't pay then the firms that AIG insured will go bust, notably US investment banks and French/German commercial banks. They should stop pretending and nationalise everything already, they're already backstopping the whole system. Yet they keep on bailing these balck holes out.