JPMorgan Investment Bankers to See Record Payday
January 18, 2010
Yahoo New/ Reuters
By Steve Eder
JPMorgan Chase & Co (JPM.N) on Friday announced a record $9.3 billion payday for its investment-banking employees, setting the stage for competitors like Goldman Sachs Group Inc (GS.N) to also make eye-popping payouts.
On a per employee basis, JPMorgan investment bankers, sales staff and traders, on average, are set to make about $379,000 for 2009, up more than $100,000 from 2008, when the broader financial sector was mired in crisis.
“People looking at it from the outside look at the dollars and say they are high,” said Kenneth Raskin, the head of law firm White & Case’s executive compensation practice. “There is no question the dollars are high. The question is whether they were deserving.”
Median U.S. household income in 2008 was $50,303.
Michael Cavanagh, JPMorgan’s chief financial officer, told reporters that even though pay is up overall, its investment bank still reduced the percentage of revenue that it set aside for pay, to 33 percent, from 62 percent for 2008 and historical averages of about 44 percent. Its investment bank had one of its strongest years.
Analysts also expect Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N), which report their results next week, to show an upswing in pay. Citigroup Inc (C.N), however, could pay commercial and investment banking bonuses for 2009 that are similar to 2008 levels, sources told Reuters.
Banks across the industry have changed their compensation plans to give managers more of their pay in the form of stock that must be held for multiple years. This sort of deferred compensation is meant to curb traders and others from taking short-term risks that could harm the investment bank several years later.
Changes in compensation plans, however, have done little to bring down overall pay figures and quell public outrage over pay.
The Wall Street Journal on Friday reported that the top 38 U.S. banks and securities firms are on pace to pay their people $145 billion, based the newspaper’s analysis.
The public anger over banker pay led the New York Times to call on Congress to pass a one-off windfall tax on banker bonuses. Britain plans a one-time tax of half of banker bonuses above 25,000 pounds ($40,675).
Banks, which now face President Obama’s bailout tax, have so far been successful in beating back other reforms, including plans for a consumer protection regulator.
The resistance of the banking industry to roll back pay is infuriating and short-sighted to some, especially with high unemployment and people losing homes to foreclosure.
“These people need some perspective on where we are and what they have done,” said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University.
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California Considers Nation’s First Statewide ‘Green’ Building Code
January 13, 2010 by Andrew
Filed under Government
January 13, 2010
USA Today
California, long a trendsetter for eco-friendly living, is breaking ground again this week. It’s set, as early as today, to adopt the nation’s first statewide green building code, which environmentalists say is not tough enough, and is also considering paying residents to cut their energy use.
On Monday, a state panel proposed that most of the new fees California plans to impose on greenhouse-gas emissions be returned to energy-saving consumers in the form of annual dividend checks that eventually could exceed $1,000 for a family of four, the Wall Street Journal reports.
The story says this proposal is part of an effort to find the most efficient way to change consumer behavior.
California is expected today to adopt a green building code that would reduce water use, mandate the recycling of construction waste and step up enforcement of energy efficiency in new homes, schools, hospitals and commercial buildings, the Los Angeles Times reports.
However, environmental groups, including the Sierra Club and the Natural Resources Defense Council, are mounting a last-ditch effort to derail key elements of the plan, backed by GOP Gov. Arnold Schwarzenegger. The report explains:
Critics say the rules fall short of rigorous standards adopted by Los Angeles, San Francisco and more than 50 California jurisdictions in league with the U.S. Green Building Council, a national non-profit group of architects, engineers and construction companies.
The council’s voluntary Leadership in Energy and Environmental Design standards have become an industry norm in recent years, with architects and construction firms competing on four levels — LEED basic, silver, gold or platinum — to market their buildings as green.
In 2004, Schwarzenegger ordered that all new state buildings meet at least a LEED silver level.
But parts of the state’s new code, which would take effect in January 2011, would amount to “a setback for California’s leadership on green building,” according to a Dec. 22 letter from six groups. They included the Sierra Club, the Natural Resources Defense Council and Global Green, along with two non-profit certification groups, the Green Building Council and Berkeley-based Build It Green.
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FDIC is $8.2 Billion in Debt
November 25, 2009 by JP
Filed under Government
November 25, 2009
The Raw Story
By Stephen C. Webster
As the number of problem U.S. banks swells to the hundreds, the Federal Deposit Insurance Corporation is increasingly hard-pressed to fill in the gaps where institutions have put depositor’s funds at risk.
Unfortunately, a dire prediction made by government officials in early 2009 has come true: the FDIC’s deposit insurance fund is now broke, according to published reports.
“The deposit insurance fund dropped by $18.6 billion during the third quarter of 2009 to negative $8.2 billion, as the Federal Deposit Insurance Corp. set aside $21.7 billion in provisions for additional bank failures,” The Wall Street Journal reported. “This is the second time in the agency’s history that the balance has fallen into negative territory.”
In March the FDIC took steps to stave off the possibility that its insurance fund would run dry, instituting new fees on banks, forcing them to pay to protect consumers.
The head of the Federal Deposit Insurance Corporation, Sheila Bair, wrote to bank leaders declaring that “without these assessments, the deposit insurance fund could become insolvent this year.”
According to the FDIC’s most recent quarterly report, there were 552 “problem” banking institutions in the U.S., the most since the end of 1993.
“In its state of the industry report, the F.D.I.C. reported that banks posted a $2.8 billion gain in the third quarter, after a $4.3 billion loss in the previous period,” The New York Times reported. “The number of bad loans of nearly every stripe — credit cards, mortgages, small business and commercial real estate — continue to grow, albeit at a slower pace.”
BizJournals added: “Fifty institutions failed during the third quarter, bringing the total number of failures in the first nine months of 2009 to 95. As of Nov. 21, 124 banks have failed nationwide.”
“The FDIC has not yet accessed a temporary $500 billion fund of capital it has available to it from Treasury for the insurance fund,” Marketwatch notd. “The FDIC estimates that bank failures will cost the agency as much as $100 billion over the next five years, with the majority of the losses taking place in 2009 and 2010. The agency may require banks to pay additional assessments to cover losses to the fund if bank failures expand in greater numbers than anticipated by the agency.”
When banks insured by the FDIC are seized or declare bankruptcy, the agency returns depositors’ funds up to $250,000.
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Full TARP Repayment Not Expected
October 22, 2009 by JP
Filed under Government
October 22, 2009
Yahoo News
The man who watches over the $700 billion in government money given to banks and other institutions to avert a financial collapse said Wednesday he thinks it’s too early to say how much will be repaid to the taxpayers.
Just as the Obama administration prepares to announce a new TARP-like program for small community banks, Inspector General Neil Barofsky said he believes that “it’s unrealistic to think we’re going to get all of that money back.”
The Treasury Department has spent more than $454 billion through TARP programs. Forty-seven recipients have paid back nearly $73 billion. That means more than $317 billion remains outstanding with the program set to expire Dec. 31.
Later Wednesday, President Barack Obama is expected to announce the community bank assistance effort. The American Bankers’ Association has asked for $5 billion in rescue-fund money to help small banks extend more loans.
Asked on a nationally broadcast interview how he would grade the program, Barofsky said, “I think right now it would have to be an incomplete.” Barofsky did say the program was successful in “pulling us back” from a financial collapse, however. At the same time, he told CBS’s “The Early Show” that the resumption of huge executive bonus payments by some of the same institutions that benefited from the government bailout has sown distrust and cynicism among many taxpayers.
The mixed and blunt assessment came as the Obama administration takes steps to wind down and refocus the Wall Street rescue effort. Barofsky’s conclusions were in a quarterly report scheduled for release later Wednesday.
An administration official said Tuesday that the bailout effort’s signature initiative — a capital purchase program that aimed to inject $218 billion into banks — would effectively wrap up at the end of the year.
But even as the administration aimed to refocus the massive Troubled Asset Relief Program on small businesses and homeowners, Barofsky said in his report that the effort to save the nation’s financial sector came at great cost to taxpayers, to the integrity of the financial system and to the public’s perception of the federal government.
“Despite the aspects of TARP that could reasonably be viewed as a substantial success,” he wrote, “Treasury’s actions in this regard have contributed to damage the credibility of the program and of the government itself, and the anger, cynicism and distrust created must be chalked up as one of the substantial, albeit unnecessary, costs of TARP.”
Barofsky said public suspicion was fed by Treasury’s decision not to require banks to report how they used their rescue money and its “less-than-accurate” statements describing the financial condition of nine large banks that benefited from large infusions of aid. The TARP program began under the administration of President George W. Bush and has expanded under Obama.
Ted Turner Wants to Control the Media
October 19, 2009
The Hollywood Reporter
By Paul Bond
No knock on his “good friend” Jeff Bewkes — or on Superman — but Ted Turner wishes that he were running Time Warner so that he could make some changes at Cartoon Network and CNN, the cable news channel he founded 29 years ago.
At CNN, he wants “less fluffy news and more international news,” especially about China, Turner says in an interview set to run on Bloomberg TV on Friday. “Less talk, more news,” he says.
As for Cartoon Network, Turner tells anchor Betty Liu, “If I had control of it, I’d put ‘Captain Planet’ on at a top time period so that kids would see the environmental superhero instead of just Superman.”
The environment, along with population control and nuclear disarmament, have been pet projects of Turner’s for decades, and he has been spending more time with those issues since retiring from media a decade ago.
But he clearly misses his former occupation. When Liu asks him if there are any media mergers he’d like to see happen, Turner responds: “I’d like to see me running Time Warner.” He says later, “I’d like CNN to report to me, and the Cartoon Network.”
He did, though, give the thumbs up to the notion of Comcast acquiring a part of NBC Universal. “Go for it,” he said. “You’ve got to do something. They’ve got a real good cable system. And they don’t have that much programming.”
Then again, Turner was also a proponent of AOL’s purchase of Time Warner, which, nine years later, is generally regarded as the worst merger in corporate history.
Turner also says that Viacom-CBS mogul Sumner Redstone was correct when he said at a conference that selling Turner Broadcasting to Time Warner was Turner’s downfall.
“He’s right. I made a mistake. I was tired,” Turner tells Liu.
Turner also says he “buried the hatchet,” as Liu put it, with News Corp. topper Rupert Murdoch about 18 months ago. He dropped him a note the other day telling him he was doing a good job with the Wall Street Journal.
“He didn’t write me back. He might not have gotten the letter,” he says.
Not that he’s a fan of print newspapers: “You’re chopping all these trees down and making paper out of them and trying to deal with all the waste paper. It’s the biggest solid waste problem that we have.”
Click here for the full report.
Is Big Pharma Covering Up Deaths?
October 5, 2009 by Andrew
Filed under Government
October 5, 2009
LewRockwell.com
By Karen De Coster
A precious, innocent child’s life came to a cruel, sudden end. The Wall Street Journal reports that Natalie Morton, who died in England shortly following a Cervarix injection, did not die from the vaccination.The WSJ, in fact, almost appears to be swaggering behind its words. So you see, says the WSJ, no need to fear or stop the H1N1 vaccination program. There are pathology reports that absolve the vaccination and its maker. The HPV vaccinations are perfectly safe, as are the swine flu jabs. Thank goodness—I feel better already.
The pathology report states that she had an undiagnosed condition that was “so severe that death could have arisen at any point.” What was that condition? A “tumour in her chest involving her heart and her lungs.” A tumor (don’t like the Brit spelling) that just suddenly lashed out at her and attacked and killed, after producing no symptoms of a cancer tumor whatsoever? Is there a single person who is dumb enough to swallow this very inadequate version of her death?
I mentioned the other day that GlaxoSmithKline is working to get approval to sell Cervarix in the U.S. to compete against Merck’s Gardasil. Of course they wouldn’t allow a truthful report of this death, caused by the vaccination, to be revealed and thus deny its approval in the U.S., causing the loss of billions of dollars in revenue streams. As Mike Adams says, “This explanation is obviously a cover story to protect the vaccine industry; and it’s not even a convincing cover story at that.” Remember, this is a global vaccination program, with mandates growing and billions at stake. This is from the Wall Street Journal piece:
That sad case is a reminder to be wary of confusing proximity in time with cause and effect — a concept public-health officials have been citing in advance of the imminent roll out of the swine (H1N1) flu vaccine.
Ahh yes, coincidence! People, you see, may now fear the massive swine flu forced vaccination program the government is trying to shove down our throats. Can’t have that—declaring a worldwide pandemic and triggering hysteria means the growth of government control and a healthy, wealthy pharmaceutical industry.
Click here for the full report
