Goldman

From a Jan. 29 New York Times Magazine Q and A with Sen. Marco Rubio (R., Fla.), everybody's favorite choice for vice president (though he isn't endorsing anyone and tells the Times "I'm not going to be the vice-presidential nominee"): After you became the first Cuban-American speaker of the Florida House of Representatives, in 2006, your mentor, Jeb Bush, presented you with a sword. What was that about? Chang is a mythical conservative warrior.

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Of course, scapegoats are intrinsic to the language of politics. And scapegoats are particularly useful to ignorant politicians. The fact is that most politicians do not know the slightest about how finance—public or private—actually operates. It is for them a matter of good and evil—mostly good when prosperity reigns, mostly evil when prosperity collapses.

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The big banks are pre-testing their main messages for bonus season, which starts in earnest next week. Their payouts relative to profits will be “record lows,” their people won’t make as much as in 2007 (except for Goldman), and they will pay a higher proportion of the bonus in stock than usual.  Behind the scenes, leading executives are still arguing out the details of the optics. As they justify their pay packages, the bankers open up a broader relevant question: How much bonus do they deserve in this situation? After all, bonus time is when you decide who made what kind of relative contrib

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Jenny Anderson has an interesting and well-reported piece in today's Times about the concern among some Goldman alumni that the current CEO, Lloyd Blankfein, has changed the culture of the company. As Anderson sums it up, "[S]ome current and former Goldman executives say Mr.

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Maybe the way to think about it is from the perspective of a large shareholder.

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Looks like it passed with almost everything intact--consumer protection agency, resolution authority, systemic risk provisions, etc. The only thing that looks slightly ominous to my eyes is the derivatives piece.

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Justin Fox is unimpressed with the latest Goldman bonus manuever, in which the top 30 Goldman execs would get their bonuses in so-called "shares at risk" rather than cash, and the shares could be clawed back if the execs turn out to have placed some costly bets: Yawn. Bonuses for top management at Goldman were already paid out mostly in stock. Goldman already used clawbacks to make sure it wasn't paying for ephemeral performance. Personally, I like the idea of a corporation that pays out half its revenue as employee compensation. If only more companies did that!

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My first thought upon reading that Goldman is restructuring bonuses for its top 30 executives was that this is designed to preempt much more extreme measures, like an American version of the British bonus tax. My second thought was, "Great, we should do this for every bonus on Wall Street, every year." (At least every bonus over $50,000 or whatever.) According to the Times, the bonuses will be paid out in special "shares at risk," which is basically stock that can't be sold for five years and can be clawed back if the recipient loses Goldman a bunch of money. But only this year.

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I haven't completely thought through the pluses and minuses of the one-time, 50-percent tax on banker bonuses that British Finance Minister Alistair Darling just proposed, but it definitely sounds appealing at first blush. Here's how the Times describes it: Banks will be charged a 50 percent tax on 2009 bonuses of more than £25,000, or $40,800. It will be imposed on the pool of bonuses paid by a bank, rather than individual payments, and it will be paid by the bank — not by the recipient of the bonus.

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Should Geithner Resign?

So far the members of Congress who think the Treasury Secretary should go don't quite constitute a full-blown caucus, much less anything resembling a majority. But they're expressing their opinions with increasing passion. Early this month Democratic Senator Maria Cantwell confessed that she was "not sure" why Geithner still had his job given his too-soft treatment of Wall Street.

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