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Capping Executive Pay An Answer to Banking System Woes?
By revamping the banking sector’s compensation system, and creating a salary cap of $500,000 for the top executives at institutions that accepted federal bailout money, new U.S. President Barack Obama could be launching a reform movement that helps make the American financial system worthwhile to invest in again.
For the last 30 years, Wall Street has had a problem with its remuneration system. Base pay was only around $150,000 even for a partner/managing director – not enough to live on for senior Wall Street bankers with a Manhattan lifestyle – while bonuses were 10, 20 or even 100 times that amount.
Story…
11Feb2009 | Money Morning | 0 comments | ContinuedCorporations, wealthy will pay for this bailout
While ordinary consumers, taxpayers will benefit the most
Newspapers and Internet chat rooms are full of witty comments regarding the costly government bailout and stimulus efforts.
“Where’s my bailout?”, “Hey, I’ve incorporated my piggy bank. Now I’m a failing bank, and I want my share of the bailout money.”
But the most seriously intended complaints are that ordinary taxpayers, the little guys, are bailing out the wealthy bankers. So the wealthy and their big financial institutions will survive, while, as a result of their greed, the economy will suffer a serious recession and the little guy is not only stuck with paying the…
How Complex Securities, Wall Street Protectionism and Myopic Regulation Caused a Near-Meltdown of the U.S. Banking System
There’s no time to beat around the bush. Let’s flush out the three credit-crisis catalysts that have remained hidden for too long, thanks to Wall Street protectionism and myopic regulation. Those catalysts – which brought us to the brink of a financial meltdown – are structured collateralized debt obligations, credit default swaps, and the horrific offspring of the two – credit default swaps on structured collateralized debt obligations.
An asset-backed security (ABS) is a type of tradable debt security that’s derived from a pool of underlying assets. We could be talking about a pool of mortgages, of automobile leases, or loans…
24Sep2008 | Money Morning | Comments Off | ContinuedBuyer Beware: Why You Don’t Want to Buy What Wall Street Banks Are Selling
Imagine that you’re the investment director for one of the new sovereign wealth funds (SWFs). A very important guy – you get to invest several hundred billion dollars, with far fewer committees and shareholder interest groups harassing you than if you the head
of U.S. institutions such as CalPERS or TIAA-CREF.
Last winter, you had delegations from all the big banks in New York explaining that
they’d just had this teensy weensy hiccup in subprime mortgages and so were giving you an unparalleled opportunity to buy shares – or convertible bonds – at a modest discount to the market price. You bit and…
Major Lending Pullback Predicted by Maverick Wall Street Analyst Could Have Dire Implications for U.S. Economy
Oppenheimer & Co. (OPY) analyst Meredith Whitney’s reputation has soared like a skyrocket since she made her bearish – but highly prescient – call on the banking sector, including Citigroup Inc. (C), as Money Morning reported last fall.
Now she’s back. And her outlook for the financial sector is actually worse. Whitney is now predicting that the banking-sector’s financial crisis will extend well into next year. If not beyond.
And that’s not even the bad news.
Whitney now says the worst may be yet to come. The banking-sector financial crisis will last at least until the end of next year, and may actually stretch…
26May2008 | Money Morning | Comments Off | Continued
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