Oh what a surprise!

[BUSHWHACKER]

http://www.guardian.co.uk/politics/2...uses-ministers

[DaveHMS]

Wikileaks should publish names & addresses so we taxpayers can pop round to the homes of bankers concerned to get our cash back...

[Apache]

I heard an interesting discussion yesterday suggesting *some* of these bonuses are necessary in order to provide incentive.

RBS owes the taxpayer ££billions, so paying the director of RBS £2m in order to incentivise (?) him to work hard at recovering that money for the government could be argued as money well spent. Would someone paid £50k with no possibility of a big fat bonus be as motivated to sort that mess out? Personally, I think not.

However, I do think there should be transparent targets they MUST meet in order to receive said bonuses, rather than them just getting them whatever happens as has been the case in the past.

Also, the bigger the wage, the more tax they will pay towards the defecit.

Yes, for me sitting here earning substantially less than £2m, it's not particularly palatable, but if the boot was on the other foot I dont think I'd have any qualms about accepting a huge pay increase - nor, I would suggest, would anyone else here!

[Shaft120]

Fed up with people bashing the bankers.

Socialism, the politics of envy. If you get so upset about it, go and get a job as a banker. Last time I checked we didn't live in the former communist bloc and the free market determied what people pay for bonuses. By all means put pressure on the nationalised banks as is any taxpayers right as shareholders. But if you want to get your money back, you'll want said bank to compete with the others. Likewise, the reason the banks were bailed out and the reason it isnt in the taxpayers interest to impose punitive action (on what is a group of private companies) is because these banks have to compete in an international market and that the financial services generate over 60% of the UKs gross domestic product. If you want to bite the hand that feeds you then go ahead. But if you're angry about said banks behaviour then I'm sorry but that ship has sailed. The banks should have been allowed to fail at the time. But, I hear you shout, that would have casued a melt down of the financial system. Well, maybe, but that was because the government didn't impose proper regulation of the derivative market. Again, that ship has sailed. All you can do now is press for better regulation of the derivative market going forward so the same problem doesn't happen again. Then we can allow poorly run banks to fail without fear of it impacting other banks. You could also try and encourage more diversity of business in the UK economy so that we are not so reliant on the Financial Services. But, before lefty loons start jumping up and down and shouting "Margaret Thatcher generated the growth in Financial Services", just calm down a minute. The answer to creating a more robust and diverse economy in the UK is not by bringing the best performing sector down to the level of the poorly performing sectors (as is often misunderstood by socialists when they quote the gap between rich and poor, misunderstanding that as long as everybody is getting richer then it is better than having everybody equally impoverished), but by investing in reasearch and technology of the future....

...Anyway, just thought that may be worth a thought, I don't know nothing, I'm just an everyday working man

[Apache]

Lot of sense in that post.

Sadly, the days when Britain made stuff to sell to other countries (a major income stream back in the day) has gone, as has the expertise and infrastructure to support it. Short sightedness in previous governments (of both colours) saw to that.

It galls me to say it, but we are reliant on derivatives, as you say. How I wish we had a strong manufacturing / engineering base again.

[biosurf]

Heard an argument the other day to the tune that as one of the larest arms exporters in the world it is this industry that is one of the key factors in keeping not only our economy buoyant but also in ensuring that we remain a relatively large player on the global stage.

Now thats hard to swallow.

[Vultch]

Great TV programme on CNBC a few nights ago on Goldman Sachs

And yes they are corrupt... but not always

They have the pick of who they want to employ with staff drawing $2 million per year plus but its the Harvards grads etc with between 10 -15 boards/job interviews before you get the job, so only the select few get through.

Anyhow ...when they were founded they were a hard working, clever, shrewd bank but... the chairman and partners did have a moral code not to screw over their customers or the public. They believed in American and the working man.
They made lots of money in investment banking and indeed during the 1980's recession big money was been made in the USA by hostile take overs and the asset stripping of companies, finance house (Morgan Stanley etc) who handled this for the aggressor companies made big money.

Goldman Sachs said NO they would not be part of it as it destroyed companies, they fought to get finance to save companies facing a takeover and became known as the "White Knights of Wall street" saving jobs etc... it made them even richer as the recession ended people flocked to invest with them as they "liked their style"

Then.. the original board retired / management changed and it went down hill, they are now corrupt and linked to the property collapse.

This is what they and others did....

They would talk to investors who could be (pension funds / individuals / companies etc) and say we are putting together a morgage package to lend to say RBS in england, do you want in ? "property is a great long term secure loan" - people/companies invested and the money was passed onto RBS to loan out as mortgages

Then as the mortgage market saturated they knew all the normal secure mortgage customers were drying up so they created special mortgage packages (toxic debt) for Banks like RBS for people they knew could not pay or were in a very high risk group.
BUT at the same time they approached same investors with a new financial product called a SCDO "they sold it as "hey guys fancy insuring our mortgage loans, we Goldman Sachs will pay you say 100 million a year to your pension fund to insure our mortgage package to banks like RBS, mortgages will never fail but guess what if it does you have to pay out your surplus like $ 9 billion to us, but mortgages will never fail ...."

It was more profitable for Goldman if these mortgages did fail as the insurance payouts were a much better quick return, and only dodgy mortgages were put up for these special insurance policies...they lied to their investors selling products they knew would fail to gain bigger returns ...this all happened because of Banking de regulation and they were caught doing it in the 2004 got a $545 million dollar fine but carried on as it was so lucurative. They knew and engineered their products to fail to make more money

A certain amount of responsibility has to go to RBS etc loaning money to poor prospects but hey a sales commission is a commission...

[dieselboy]

Heard an argument the other day to the tune that as one of the larest arms exporters in the world it is this industry that is one of the key factors in keeping not only our economy buoyant but also in ensuring that we remain a relatively large player on the global stage.

Now thats hard to swallow.

Fine.
If a banker has done exceptionally well then why shouldn't he receive a large bonus.

However, I would like some guarantees on savings intrest rates and mortgage rates so the regular working people aren't shafted so that the banks can pay said bonuses.
There also needs to be some regulation on how they go about "doing exceptionally well".

[dieselboy]

Great TV programme on CNBC a few nights ago on Goldman Sachs

And yes they are corrupt... but not always

They have the pick of who they want to employ with staff drawing $2 million per year plus but its the Harvards grads etc with between 10 -15 boards/job interviews before you get the job, so only the select few get through.

Anyhow ...when they were founded they were a hard working, clever, shrewd bank but... the chairman and partners did have a moral code not to screw over their customers or the public. They believed in American and the working man.
They made lots of money in investment banking and indeed during the 1980's recession big money was been made in the USA by hostile take overs and the asset stripping of companies, finance house (Morgan Stanley etc) who handled this for the aggressor companies made big money.

Goldman Sachs said NO they would not be part of it as it destroyed companies, they fought to get finance to save companies facing a takeover and became known as the "White Knights of Wall street" saving jobs etc... it made them even richer as the recession ended people flocked to invest with them as they "liked their style"

Then.. the original board retired / management changed and it went down hill, they are now corrupt and linked to the property collapse.

This is what they and others did....

They would talk to investors who could be (pension funds / individuals / companies etc) and say we are putting together a morgage package to lend to say RBS in england, do you want in ? "property is a great long term secure loan" - people/companies invested and the money was passed onto RBS to loan out as mortgages

Then as the mortgage market saturated they knew all the normal secure mortgage customers were drying up so they created special mortgage packages (toxic debt) for Banks like RBS for people they knew could not pay or were in a very high risk group.
BUT at the same time they approached same investors with a new financial product called a SCDO "they sold it as "hey guys fancy insuring our mortgage loans, we Goldman Sachs will pay you say 100 million a year to your pension fund to insure our mortgage package to banks like RBS, mortgages will never fail but guess what if it does you have to pay out your surplus like $ 9 billion to us, but mortgages will never fail ...."

It was more profitable for Goldman if these mortgages did fail as the insurance payouts were a much better quick return, and only dodgy mortgages were put up for these special insurance policies...they lied to their investors selling products they knew would fail to gain bigger returns ...this all happened because of Banking de regulation and they were caught doing it in the 2004 got a $545 million dollar fine but carried on as it was so lucurative. They knew and engineered their products to fail to make more money

A certain amount of responsibility has to go to RBS etc loaning money to poor prospects but hey a sales commission is a commission...

Another big name that made the headlines a company called Sandleman (John Sandleman)

[Apache]

Heard an argument the other day to the tune that as one of the larest arms exporters in the world it is this industry that is one of the key factors in keeping not only our economy buoyant but also in ensuring that we remain a relatively large player on the global stage.

Now thats hard to swallow.

Most of our Defence companies are partly or wholly owned by American companies though, so a large amount of profits go out of the country. I think its Carlyle Group own a large stake in BAE Systems - and probably others.

Raytheon (now wholly L3 I think) are another big Defence co in the UK who are wholly US owned, QinetiQ, which spun out of DERA have links with Carlyle Group (I think... its all a bit grey, understandably)

In my experience, UK Defence companies tend to be small, working on novel concepts, which are then bought by the larger manufacturers.

So whilst there might be a large financial turnover in the UK, I imagine most of the profit goes across the pond.

[flounderbout]

I agree with quite a lot of what Shaft said, in that some of the media response to massive bonus payouts is a knee jerk reaction which though pretty understandable, is nevertheless not wholly informed.

BUT:

the whole "bonuses necessary to incentivise bankers" spiel is based on the premise that the banking employment market is a transparent one in which demand properly reflects supply. In other words you cannot find a decent banker to do a given job for less than few mill a year . I'm sorry, but in my view that is a pile of crap. A lot of my university contempories went into banking. Sure some (but by no means all) of them were bright, but there is no way they were the intellectual elite - I would say quite the contrary. My general experience of bankers is that they are tolerably bright, but there are plenty of equally bright people who would happily do their job for their base salary, which is still many times greater than the salary one would get for an equally or more demanding job in law or medicine etc. OK you can't just watlz into a banking job and start doing it, but a lot of serious commentators suggest that the highest earning bankers can ascribe their success only to survivorship bias rather than any particular talent (See e.g Nassim Taleb - Fooled by Randomness - an excellent read if you are interested in the financial markets and investment generally). I suspect that the banking employment market is a wholly artificial one. In reality a couple of hundred thousand a year ought to be "incentive" enough to do your job. And if it ain't, there are plenty more people who could do it.

It is actually a pretty bizarre proposition that on needs to be "incentivised" to do a good job. Imagine a neuro-surgeon demanding to be paid a bonus based on patient survival rate. Can it seriously be suggested that he does a shoddy job unless there is a bonus at the end? And yet the argument for doing so is the same as that used by the bankers.

Having said all that however, I suspect that the major problems in the financial system are exemplified by the hedge fund boys and not the likes of BarCap anyway - Crispin Odey took home a bonus of £36m odd this year from memory. But the government can't do anything about the hedge funders' bonuses.

Again though, the position with tax-payer bailed banks does seem to me to be rather different - after all they have not yet paid for the effect of heavily incentivised failure, so why should they be paid for some limited incentivised success? If we are going to incentivise success, it has to be long term success, not short term success. Otherwise it is self-evidently a recipe for disaster.

[dieselboy]

Andy, gatwick airport is owned by american company global infrastructure partners

[Rustinho]

http://www.guardian.co.uk/politics/2...uses-ministers

I just want Ed Milliband to start using catchphrases like "sufferin' succotash" and "you're dithpicable" cos I can't help but think of him saying that every time I hear him on the news...

[Vultch]

Sorry guys, I think the bonus es paid are way out of proportion to the work done...

Goldman Sacks as one example ..corrupt liars who swindled their investors.

Take the "real" private sector ..Apple they actually make something, I'm sure their designers and programmers are very well paid and receive bonuses but not on the same scale as the banks.

Banks who are mainly kept afloat by investors/pension funds etc keep the myth going bankers are special people needing such salaries bonuses. They would never leave London, they could if they wanted go now, you can trade from home... anywhere..its the London lifestyle that attracts them..

Also Bonuses now seem to be the norm instead of been paid for exceptional circumstances... Surely a decent salary is your incentive for going to work.

[flounderbout]

Also Bonuses now seem to be the norm instead of been paid for exceptional circumstances... Surely a decent salary is your incentive for going to work.

That was rather my point. Although less concisely put.