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Bonuses for bankers

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Poll Question: Should any banker be awarded a years salary or more as a bonus?
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Blacksword View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Blacksword Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 14:03
^^^ Yes, that's true re; Russia, and I would agree that 3 WS based agencies should probably not be in charge of rating the whole world.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 17:52
EL is right, and indeed while this is not a popular answer...the work required to make it in banking is pretty brutal.

Most of us don't want this life, I certainly as hell don't, but you gotta be exemplary in school, get an MBA, then endure insane hours, cut throat competition and just bust your ass. Constant threat of being tossed out and probably get a lot of sh*t from bosses.
So really kinda messed up to get angry over it, outside a general jealousy. Any of us could pursue such a life, if you wanna make big money. So why be mad?

Like I said the issue is when it spills out of their world and starts impacting ours. Now to the point that many modern economies are built heavily on bankers madness. This is the problem!


Edited by JJLehto - March 01 2013 at 17:55
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Dean Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 18:11
Originally posted by JJLehto JJLehto wrote:

EL is right, and indeed while this is not a popular answer...the work required to make it in banking is pretty brutal.

Most of us don't want this life, I certainly as hell don't, but you gotta be exemplary in school, get an MBA, then endure insane hours, cut throat competition and just bust your ass.
So really kinda messed up to get angry over it, outside a general jealousy.

Like I said the issue is when it spills out of their world and starts impacting ours. Now to the point that many modern economies are built heavily on bankers madness. This is the problem.
I couldn't give a flying fart how brutal it is and it certainly is nothing to do with general jealousy. Getting paid for doing your job is called salary, geting paid extra for doing it well is called a bonus. If you get paid a bonus whether you do well or screw up is not a bonus, it's salary with tax benefits.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 18:15
Indeed, but that's there whacky ass world and really what can ya do besides fume over it?
Just don't make all of us pay for your f**k ups.
Which of course keeps happening, and they are propped up constantly along the wayAngry
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Post Options Post Options   Thanks (0) Thanks(0)   Quote King of Loss Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 21:21
Now I bet everyone is noticing those much higher prices on everything. I think the most obvious stuff is food, oil and other daily necessities. It's just a bugger for us, but in poorer countries, it's terrible.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 21:46
Yeah, prices of everything has gone up at least by 100% if not more in just the last 5-6 years here.   It's ok for the middle class but I really wonder how the poor can possibly cope with such monstrous inflation.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote fusionfreak Quote  Post ReplyReply Direct Link To This Post Posted: March 04 2013 at 16:48
Originally posted by rogerthat rogerthat wrote:

Yeah, prices of everything has gone up at least by 100% if not more in just the last 5-6 years here.   It's ok for the middle class but I really wonder how the poor can possibly cope with such monstrous inflation.
I can tell you it's not very easy all the time for the have nots,everything seems so expensive!But one can't forget that middle classes are also suffering a lot.Bonuses should be diminished and top bankers such as Jamie Dimon or Stephen Hester should be punished because they went dangerously wrong.Every government should separate deposit  from trading in the banks.By the way Jolly Banker by Woody Guthrie is a very good song.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Blacksword Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 01:56
^^^ The middle class are feeling it too. You're right, and people often forget that the working class and middle class need each other in a functioning economy. Our last government re-branded the concept of being 'middle class' The labour party - historically the champions of the working class - claimed we were 'all middle class now' In fact all they meant is that we were all now allowed to accrue vast amounts of debt to pay for 'stuff' we wouldn't previously have been able to buy. It made many people feel and look richer, but those people are now discovering they were conned, and this current government is just rubbing their noses in it, and grinding them into the dirt.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Easy Livin Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 03:08
The assumption that people get bonuses for not performing is quite laughable. These organisations may be ethically challenged, but they do not just give their money away out of charity. Bonuses are usually based on meeting and exceeding pre-set targets. In the case of a company that is on the ropes, the bonus might be payable if the incoming staff appointed to turn it around can initially get the losses down to a manageable level. There's no magic wand for turning the company around, so you have to offer incentives to get the people in who can do the job.

There's a great lack of understanding or heads in the sand here about how things actually work. As I've said before, I don't seek to justify the way things are, but let's live in the real world. I notice too that no one has refuted the notion that it is our own greed that is at the root of the issue.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Dean Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 03:45
Originally posted by Easy Livin Easy Livin wrote:

The assumption that people get bonuses for not performing is quite laughable. These organisations may be ethically challenged, but they do not just give their money away out of charity. Bonuses are usually based on meeting and exceeding pre-set targets. In the case of a company that is on the ropes, the bonus might be payable if the incoming staff appointed to turn it around can initially get the losses down to a manageable level. There's no magic wand for turning the company around, so you have to offer incentives to get the people in who can do the job.
Somehow when a bank gets a bail-out, posts losses for that year and still pays bonuses then that's not laughable, it's cryable. It's tantamount to being criminal.
 
The incentive to get people to do their jobs is called salary. If those people who can do the job were not paid bonuses where would they go? More to the point: what are those people actually for? If they are not "doing the job" and making money for their employers then what are they there for? Seriously, what is the point of an investment banker who cannot invest money? What is the point of a bank trader who cannot trade?
 
Originally posted by Easy Livin Easy Livin wrote:

There's a great lack of understanding or heads in the sand here about how things actually work. As I've said before, I don't seek to justify the way things are, but let's live in the real world. I notice too that no one has refuted the notion that it is our own greed that is at the root of the issue.
What is there to refute? The purpose of investing in a bank is to get a return on your money, without that incentive you may just as well store your cash under the matress, if saving money with a return that barely keep track of inflation motivated by greed then so be it.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote Blacksword Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 06:57
With the greatest of respect to EL, this situation is actually fairly clear cut, and it is you who appears not to understand how things work.

Bonuses are often paid to traders even when their respective banks are showing losses, and in some cases ahave been bailed out and even put at least in part, in public ownership. It wouldn't be acceptable in any other private sector areas ( andcertainly not the public sector) to pay out millions in bonuses when the business is going down the swannie. It is morally repugnant to raid the public public purse to bail out private corporations only for those corporations to be - in some cases - exempt from corporation tax and to be awarding their crooked staff vast amounts of money for gambling.

Re; "What is the point of bank trader who can't trade? Who says they can't trade? The issue is what they are trading and the level of risk ascociated to the investment, not to mention the moral arguments of trading food stocks, among other commodities, as derivatives; deliberately and irresponsibily inflating huge debt bubbles to make a fast buck, knowing full well that bubbles burst and it is then the rest of us who pay the price. The banks have been able to do this with impunity because there has always been the promise of government bail outs. If this promise was removed the trading would not be so reckless. It may be less profitable in the short term, but it would likely be more stable in the long term. I fail to hear any coherant arguments as to why the fabric of our civilization should be in the hands of five or six mega banks. No one seems bothered by this. they either invest their energies in berating the poor for drawing benefits, or the middle class for having the audacity to own a house. People need to wake the f*** up!

Re; our own greed. Is this the greed that has been agressively encouraged by successive governments? It's easy to say people have minds of their own and should be capable of making the decision to avoid debt without help, but the problem is most don't and consequently can't. If you take a single parent on benefits, who can't afford to buy new clothes for their child, and you give them a credit card, what do you think they're going to do? Cut it up and throw it away? No, they're going to do what every good parent tries to do, and privide for their child. Over the last 20 years the benefit class has been able to borrow through banks and credit card companies. Government has not intervened to discourage or even educate about rhe conseqeunces of debt, because they know that living on the never never creates an illusion of wealth which can score electoral points for them. The psychology of debt is well understood by lenders and politicians alike and is exploited fully.

Edited by Blacksword - March 05 2013 at 07:00
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Post Options Post Options   Thanks (0) Thanks(0)   Quote chopper Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 07:42
Originally posted by fusionfreak fusionfreak wrote:

Originally posted by rogerthat rogerthat wrote:

Yeah, prices of everything has gone up at least by 100% if not more in just the last 5-6 years here.   It's ok for the middle class but I really wonder how the poor can possibly cope with such monstrous inflation.
I can tell you it's not very easy all the time for the have nots,everything seems so expensive!But one can't forget that middle classes are also suffering a lot.Bonuses should be diminished and top bankers such as Jamie Dimon or Stephen Hester should be punished because they went dangerously wrong.Every government should separate deposit  from trading in the banks.By the way Jolly Banker by Woody Guthrie is a very good song.
To be fair most of RBS' problems pre-date Stephen Hester. Blame them all on Sir Fred Goodwin.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 08:40
Originally posted by Easy Livin Easy Livin wrote:


There's a great lack of understanding or heads in the sand here about how things actually work. As I've said before, I don't seek to justify the way things are, but let's live in the real world. I notice too that no one has refuted the notion that it is our own greed that is at the root of the issue.

I'd suggest you speak for yourself there.  Do you know how conservative - and expensive - retail lending is in countries like India?  I am a qualified accounting professional and work for a large company but when I approached the bank for a home loan, I was only eligible to a loan of about 60% of my take-home pay (though I sought less anyway) and a still smaller percentage of my gross.  But what is the point of prudence, I wonder, if credit is built up like a pack of cards elsewhere in the world and upsets the best calculations.   I'd also like to point out that credit growth was fuelled very largely by an errant Federal Reserve that drove interest rates down to an all time low and then quadrupled it in a matter of a few quarters. If that is not the perfect recipe for financial disaster, I wonder what is.  As I said earlier, I'd not single out the bankers alone for blame because govts, rating agencies were all in it together.   It's a gigantic scam and its perpetrators still live in furious denial of the truth.


Edited by rogerthat - March 05 2013 at 10:30
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Post Options Post Options   Thanks (0) Thanks(0)   Quote King of Loss Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 10:21
It's quite hilarious that Ben Bernanke is being promoted as a good central bankerOuchConfusedI mean, it's because of his direct monetary policies we have close to double digit inflation and a hugely inflated stock market that's going to crash at any time when the bankers think they can profit off of the next crisis.


Edited by King of Loss - March 05 2013 at 10:22

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Post Options Post Options   Thanks (0) Thanks(0)   Quote The Doctor Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 10:26
I don't know about hung as I do not really believe in the death penalty, but they should be forced to work the rest of their lives digging ditches or flipping burgers for sub-minimum wage.  I think $2.00/hour sounds about right.  And obviously, they should be stripped of their wealth.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Padraic Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 12:31
Originally posted by King of Loss King of Loss wrote:

 hugely inflated stock market that's going to crash at any time 

I still have a lot of cash on the sideline because I also think this is the case, but sometimes I think I'm wrong.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Easy Livin Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 13:01
Sorry, I still think there is a lot of misinformation here. I think it's convenient to jump on a bandwagon to criticise  the "system" without accepting responsibility for it. As I explained previously, bonuses are the "at risk" portion of a person's salary. If you simply paid them the higher salary without any incentive to earn it, would that really be better? A company may be making loses and still need to pay contractual bonuses (to current and former employees). The fact is that if they have met or exceeded the targets they were set to generate in terms of income for the company, they get the contractually agreed bonus. Those who failed and caused the loses don't. As I also explained, sometimes reducing losses is actually meeting an agreed target. That is the real world.

Oh and as for blaming the government. Lets remember that the government is a reflection of the people. The party in power got the most votes and were democratically elected by you and me. The "I didn't vote for them" excuse doesn't wash as the problem emanate from all sides. If you didn't vote at all but could have, you are even more culpable. If you think you could do better, stand for election and persuade the electorate that your way is better.

As I probably have already said too often, I don't seek to condone or justify the way things are, but I do get irritated by those who seek to blame others for the issues without accepting their own share of the responsibility.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote lazland Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 13:55
Originally posted by Easy Livin Easy Livin wrote:

Sorry, I still think there is a lot of misinformation here. I think it's convenient to jump on a bandwagon to criticise  the "system" without accepting responsibility for it. As I explained previously, bonuses are the "at risk" portion of a person's salary. If you simply paid them the higher salary without any incentive to earn it, would that really be better? A company may be making loses and still need to pay contractual bonuses (to current and former employees). The fact is that if they have met or exceeded the targets they were set to generate in terms of income for the company, they get the contractually agreed bonus. Those who failed and caused the loses don't. As I also explained, sometimes reducing losses is actually meeting an agreed target. That is the real world.

Oh and as for blaming the government. Lets remember that the government is a reflection of the people. The party in power got the most votes and were democratically elected by you and me. The "I didn't vote for them" excuse doesn't wash as the problem emanate from all sides. If you didn't vote at all but could have, you are even more culpable. If you think you could do better, stand for election and persuade the electorate that your way is better.

As I probably have already said too often, I don't seek to condone or justify the way things are, but I do get irritated by those who seek to blame others for the issues without accepting their own share of the responsibility.

And I wholeheartedly agree with you. An important point - they had to have people to lend to in the first place. That was us, on a credit binge which would "never end". 

Years of political activism taught me one thing above all others. You can fool most of the people most of the time.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Finnforest Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 14:42
Well said, Bob

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Post Options Post Options   Thanks (0) Thanks(0)   Quote akamaisondufromage Quote  Post ReplyReply Direct Link To This Post Posted: March 05 2013 at 14:50
Well apparently Bankers jobs are so dull that we have to pay them shed loads of cash and then pay them shed loads more just in case they go and work somewhere else.  Why is this job so bad?  Everybody else is content to live on a wage and they do their best without having a bonus.  Bankers are not a limited commodity you can train up plenty of people to do this job.  They are not like footballers, theres only one Maradona (luckily) or one Rooney or whatever you can't train people to do what they do (on the whole).
 
Having said that , the EUs answer of limiting Bonuses is not the answer as they will just up the wages which doesn't depend on performance at all.  So it will be worse. 
 
From a UK perspective it is really very sad that we have become so dependent on the banking sector.  I blame it on that B*tch Thatcher who thought we could get everything from the service sector.  Ans successive governments have carried on asi.  We have been sold short. 


Edited by akamaisondufromage - March 05 2013 at 14:51
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