Banks not curbing pay despite meltdown
Performance bonuses will be doled out at 9 biggest U.S. banks
Rachel Beck and Joe Bel Bruno - Oct. 25, 2008 12:00 AM
NEW YORK - Despite the Wall Street meltdown, the nation's biggest banks are preparing to pay their workers as much as last year or more, including bonuses tied to personal and company performance.
So far this year, nine of the largest U.S. banks, including some that have cut thousands of jobs, have seen total costs for salaries, benefits and bonuses grow by an average of 3 percent from a year ago, according to an Associated Press review.
"Taxpayers have lost their life savings, and now they are being asked to bail out corporations," New York Attorney General Andrew Cuomo said of the findings. "It's adding insult to injury to continue to pay outsized bonuses and exorbitant compensation." Banks will decide what to pay out in bonuses in the coming months. Just because they've been accruing money for incentive pay doesn't mean they will pay it out in full.
That there is a rise in pay from 2007 is surprising because many of the same companies were doing some of their best business ever, at least in the first half of last year. In 2008, each quarter has been weaker than the last.
Even if you subtract what the bank has shelled out in severance pay and other costs related to the job cuts, overall pay is only slightly lower this year.
Typically, about 60 percent of Wall Street pay goes to salary and benefits, while about 40 percent goes to end-of-the-year cash and stock bonuses that hinge on performance, both for the individual and the company, said Brad Hintz, a securities industry analyst at Sanford Bernstein and a former chief financial officer at Lehman Brothers.
"The fundamental goal of the compensation plan is to allow an employee to get wealthy," Hintz said. He also pointed out that workers' pay is supposed to be "exposed to the risk of the parent company."
This should be the year where that structure is tested. The financial crisis caused banks to falter or fail and lending to dry up and prompted Congress to pass a $700 billion bailout package. As part of that, government is pouring $125 billion through stock purchases into the nine large financial companies cited in AP's review of compensation.
Besides Citigroup, those include Bank of New York Mellon, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Merrill Lynch, Wells Fargo and Co., and State Street. Those taking cash from Uncle Sam must follow guidelines limiting executive pay. No restrictions are placed on across-the-board pay.
More and more it looks like a $700 billion slush fund for Congress to give out as it chooses
October 26, 2008
Spending plans shift for $700 bil bailout
Oct. 26, 2008 12:00 AM
WASHINGTON - First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets.
Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.
But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.
In buying equity stakes in banks, the Treasury has "deviated significantly from its original course," says Alabama Sen. Richard Shelby, the top Republican on the Senate Banking, Housing and Urban Affairs Committee.
"We need to examine closely the reason for this change," said Shelby, who opposed the bailout.
The centerpiece of the Emergency Economic Stabilization Act is the "troubled asset relief program," or TARP for short. The money was to be devoted to buying "toxic" mortgage-backed securities whose value has fallen in lockstep with home prices.
Other planned uses of the bailout money have lawmakers protesting, although it is only fair to note there is nothing in the law that they just wrote to prevent those uses.
Down and out billion dollar US corporations like Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Capital One Financial and SunTrust Banks line up for their share of the $700 billion in pork Congress voted to give them!!!!
U.S. ready to start bailout aid
Treasury prepares to move $125 bil to 9 banks;
Fed starts program to buy up short-term debt
by Martin Crutsinger - Oct. 28, 2008 12:00 AM
WASHINGTON - The government prepared Monday to move the first batch of bailout money to banks as fretful world markets plunged again. Wall Street ended with a big drop at the closing bell, sending the Dow Jones industrials to their lowest close since the financial meltdown began.
The Treasury Department said it will start moving $125 billion to nine major banks this week by buying ownership stakes, the first big transfer since the $700 billion bailout package was passed this month.
Assistant Treasury Secretary David Nason said the infusion will go to the largest banks in the nation, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. A group of smaller but significant regional banks, including Capital One Financial and SunTrust Banks, began announcing their own preliminary deals with Treasury for another $125 billion. That money should be released as soon as paperwork is finished.
The Fed also began a major program to buy up the short-term debt, known as commercial paper, that businesses use to pay for everyday expenses and salaries.
Lending, the lifeblood of the economy, froze up after the collapse of investment house Lehman Brothers in mid-September and has thawed agonizingly slowly since.
On Wall Street, buying and selling that was halfhearted by the standards of the past month had major averages drifting higher and lower throughout the day. Then, stocks plunged in the final 10 minutes of trading.
The Dow Jones industrials finished the day down 203 points, or 2.4 percent, closing at the 8,175 level, their lowest close of the year. Remarkably, it was the 28th time in the 31 trading sessions since the financial meltdown began that the Dow has moved triple digits for the day.
But the carnage was worse elsewhere on another day when investors worried about a looming worldwide recession. Major stock markets in Hong Kong, Tokyo, Britain, France and Germany dropped sharply earlier in the day. Tokyo's Nikkei 225 index closed at its lowest level in 26 years.
The Fed was expected to make an even more dramatic move on Wednesday by cutting interest rates, perhaps lowering the key federal funds rate by as much as a half-point. That would drive down the federal funds rate to 1 percent.
The question is whether all the efforts, including billions of dollars of loans to banks by the Fed and other central banks around the world, will be enough to get lending going again.
So far, it hasn't helped much. A closely watched measure that tracks what banks charge each other for loans, edged down marginally on Monday, suggesting credit is a bit looser than a few weeks ago but remains tight.
"All these efforts are doing some good, but the question is whether they will do enough," said David Wyss, chief economist for Standard and Poor's in New York. "The credit markets are still pretty locked up."
Besides pumping money into the banking system, Treasury Secretary Henry Paulson and other Treasury officials are considering a round of requests for help from other industries, including big insurance companies, automakers and foreign-controlled banks.
The broader bailout package has undergone major changes since it was passed by Congress. Global markets staggered, forcing other countries to rush to the aid of their own banks, and Paulson decided U.S. banks needed more urgent help.
Socialist McCain calls socialist Obama a Socialist! Their ain't a dimes worth of difference between them! They both voted to give the rich Wall Street brokers and bankers a $700 billion corporate welfare gift!
The only difference between them is WHO they will steal the money from, and more importantly if your on the receiving end, WHO they will give the stolen money to!
Oct 29, 2:27 PM EDT
Obama ridicules McCain charge he's socialist
By BEN FELLER
Associated Press Writer
RALEIGH, N.C. (AP) -- Barack Obama accused Republican rival John McCain on Wednesday of stooping to low tactics by labeling the Democrat a socialist.
"I don't know what's next," Obama, the presidential candidate, said at an outdoor rally in North Carolina. "By the end of the week, he'll be accusing me of being a secret communist because I shared my toys in kindergarten. I shared my peanut butter and jelly sandwich."
Obama turned to ridicule to rebut McCain's daily references to Obama's encounter with "Joe the Plumber." McCain has capitalized on a moment when Obama told an Ohio plumber that he wanted to "spread the wealth around" by boosting taxes on wealthier people to finance a middle class tax cut.
The rally in North Carolina's capitol opened a day when Obama will be a one-man television blitz, saturating prime-time with a 30-minute ad and popping up on late-night TV scene. He is also giving an interview to a prominent network news anchor, and appearing with fellow Democratic star Bill Clinton at a rally timed to hit the late-evening news.
The 30-minute infomercial is Obama's final opportunity to reach a mass audience to discuss his principles of governing. Obama's proposals will be showcased through the stories of four different Americans who illustrate specific national challenges and how Obama would address them, the campaign said.
Obama himself will speak in the video - at times with a group of voters, at others directly to the audience. The 30 minutes will end by cutting to a live appearance by Obama in Kissimmee, Fla., though the campaign said that would be a small portion of the half-hour video.
The video features footage shot by Davis Guggenheim, the director and executive producer of former Vice President Al Gore's Oscar-winning documentary on global warming, "An Inconvenient Truth." Guggenheim, the son of award-winning filmmaker Charles Guggenheim, also was a producer and director on the HBO series "Deadwood."
In Raleigh, Obama painted a bleak picture of a McCain presidency. He said voters would get no help paying for college, see their health benefits taxed, and watch tax relief go to the rich.
"So whether you are Suzy the student, or Nancy the nurse, or Tina the teacher, or Carl the construction worker, if my opponent is elected, you will be worse off four years from now than you are today," Obama said. "Let's cut through the negative ads and the phony attacks."
McCain, trailing in the pools with time dwindling, has tried to boost his chances by hammering Obama's tax plan. Obama says he wants to give a tax cut to 95 percent of taxpayers, but McCain says Obama and Democrats in Congress will wind up taxing the middle class.
Obama's counterpunch came amid new poll data in his favor.
An AP-GfK poll shows Obama leading in four key states won by President Bush in 2004 and essentially tied with McCain in two other Republican states - North Carolina and Florida, where Obama campaigned Wednesday.
With six days until the election, Obama was on the offensive in North Carolina, which Bush won twice by double digits. No Democratic presidential candidate has won it since Jimmy Carter.
McCain spent the day defending his position in Florida, the most valuable swing state with 27 electoral votes and another place Bush won twice. McCain is scrambling to hang onto states Bush won to have any chance of pulling an upset.
Obama, meanwhile, is trying to win over voters from the comfort of their couches.
His prime-time ad is rare, and costly. The Obama team bought time on CBS, NBC and Fox for about $1 million per network. The spot airs at 8 p.m. EDT. It is also scheduled to run on Univision, BET, MSNBC and TV One.
Flush with cash, Obama has used his record-shattering fundraising to by buy media time in ways McCain cannot.
McCain also is purchasing loads of ad time. But Obama has been able to spend in more states than McCain, appear more frequently in key markets and diversify his messages - some positive, some negative.
Obama's latest ad, unfurled Wednesday, was a negative 30-second spot aimed at key states that uses McCain's own words against him and mocks GOP running mate Sarah Palin. It shows McCain acknowledging in three quotes, one from 2005 and two from 2007, that he knows less about economic matters than other issues. In the last quote, McCain says he might have to rely on his vice president for expertise - and then the spot cuts to a winking Palin.
McCain countered with his own new ad, dismissing Obama's infomercial as a "TV special."
"Behind the fancy speeches, grand promises and TV special, lies the truth," the McCain ad's announcer says. "With crises at home and abroad, Barack Obama lacks the experience America needs. And it shows. His response to our economic crisis is to spend and tax our economy deeper into recession. The fact is Barack Obama's not ready yet."
Obama on Wednesday will give an interview to Charlie Gibson of ABC's "World News" and tape an appearance on Comedy Central's "The Daily Show," which will air at 11 p.m. EDT.
Palin: I am a frugal shopper at home [But as a government ruler I will spend other peoples money like a drunken sailor!]. I guess Sarah Palin isn't any different then Harry Mitchell, Ed Pastor, Gabrielle Giffords, John Kyl, John McCain and John Shadegg who steal our money and give it to rich Wall Street bankers and brokers in return for political contributions!
Palin: I am a frugal shopper at home
Oct. 24, 2008 10:17 AM
WASHINGTON - Republican vice presidential candidate Sarah Palin, on whom the GOP has spent $150,000 for designer clothes and beauty services, says her family shops frugally back home in Alaska and her favorite store is a consignment shop.
Purchases by the Republican National Committee at high-end department stores like Saks Fifth Avenue and Neiman Marcus appeared in spending reports filed with the Federal Election Commission. They offered a stark contrast to Palin's image as a "hockey mom" who calls herself part of an average, middle-class American family.
"Those clothes are not my property. We had three days of using clothes that the RNC purchased," Palin told Fox News in an interview that aired Thursday night.
"If people knew how Todd and I and our kids shop so frugally. My favorite shop is a consignment shop in Anchorage, Alaska, called Out of the Closet. And my shoe store is called Shoe Fly in Juneau, Alaska. ... It's not, you know, Fifth Avenue-type of shopping."
In one shopping spree for Palin, the RNC spent $75,062 at Neiman Marcus in Minneapolis. It also spent $49,425 at Saks Fifth Avenue and $4,902 at Atelier, a stylish men's store, and paid $92 for a romper and matching hat with ears for her infant son, Trig, at Pacifier, a Minneapolis baby store.
The McCain campaign reported paying $13,200 in September to celebrity makeup artist Amy Strozzi, who works on the reality show "So You Think You Can Dance." She was paid $22,800 for the first two weeks of October, nearly double what the campaign paid McCain's foreign policy adviser, Randy Scheunemann, according to a filing report.
Palin said the clothing purchased by the RNC would be returned or donated to charities.
John McCain and Barack Obama are both liars!!!!
For politicans running for office it seems like facts are something that you make up to help you get elected.
Fact Check: The myths that wouldn't go away
By CALVIN WOODWARD, Associated Press Writer
Nov 3, 3:47 am ET
WASHINGTON – Facts have taken a beating in Campaign '08.
Each in his own way, John McCain and Barack Obama have produced enduring myths, amplified by their running mates and supporters. When a non-licensed plumber who owes back taxes and would get a tax cut under Obama is held out by McCain as a stand-in for average working Americans who should vote Republican, you know truth-telling is taking a back seat to myth-making.
McCain has clung tenaciously to many of his distortions throughout the campaign, yielding on a few.
Obama has taken a different tack when he is called on his misstatements. Although perhaps too late to really set the record straight, he's edged closer to the facts.
You might need a microscope to tell the difference, but slight variations in a pitch or accusation can make all the difference between bogus and real.
Obama saddled McCain with a bum rap when he accused the Republican of wanting a 100-year war in Iraq back in the spring. Finally he relented and said McCain sees U.S. troops being in Iraq for 100 years. That's closer to right — as a peacekeeping force like the one in South Korea. But McCain might be long associated with war without end.
Obama accused McCain of wanting to privatize Social Security, which he doesn't. Now he accuses McCain of wanting to privatize "part" of Social Security, which he does, as one option that younger workers could choose.
For his part, McCain has blithely carried on with a variety of discredited claims, abetted by a running mate whose exuberance is not at all dimmed by contrary evidence.
Sarah Palin repeated her boast that she declared "thanks but no thanks for that bridge to nowhere" long after it became clear she had said no such thing — neither in words nor in essence.
McCain's down-to-the-wire accusation that Obama "will raise your taxes" contradicts Obama's tax-cut proposals for all but wealthy Americans. His dark warnings that Obama will fine small businesses that do not provide health insurance goes against a plan by the Democrat that exempts small businesses from paying for coverage. In fact, Obama would give them money to help them offer insurance.
Beyond the realm of exaggeration and misrepresentation, omission plays a large part, too, in denying voters important information on what the next president will do.
Neither candidate has owned up to the budget crunch that is certain to crimp their promises, send the country far deeper into debt, or both. Obama's assertion that his cost savings more than pay for his programs, and McCain's statement that he'll freeze most government spending and balance the budget in four years, are not believed outside their campaigns and circles of allies.
Some of the myths:
"We have to stop sending $700 billion a year to countries that don't like us very much," McCain says, again and again.
That's a seriously inflated figure cited by McCain for the value of U.S. oil imports from countries hostile to America. In fact, the government says the U.S. spent less than half that sum on crude oil and refined petroleum projects from foreign sources last year, and most were from friendly countries such as Canada, Mexico and Britain.
Obama upped the stakes when he used the figure, boiling the vast web of oil and debt transactions down to two countries: "Nothing is more important than us no longer borrowing $700 billion or more from China and sending it to Saudi Arabia," he said. "It's mortgaging our children's future."
HEALTH CARE HORRORS
It only takes McCain and Palin a few words to bend Obama's health care plan out of recognition.
McCain tells supporters he "won't fine small businesses and families with children, as Senator Obama proposes, to force them into a new, huge, government-run health care program, while I keep the cost of the fine a secret until I hit you with it."
Palin talks about Obama's "universal government-run program" and adds: "I don't think it's going to be real pleasing for Americans to consider health care being taken over by the Feds."
Obama's plan doesn't fine small businesses. It doesn't force families with children, or anyone, into government-run health care. And the Feds wouldn't be taking over the system.
Between them, McCain and Palin got one part of it half right: Obama has not said how much he would fine larger companies if they do not meet his requirement to offer health insurance or pay into a kitty.
McCain's health plan is distorted, in turn, by Obama.
"Your health care benefits will get taxed for the first time in history," Obama warns voters in attacking it. He often leads voters to think that's the full story. Hardly.
McCain, in exchange for proposing to tax the value of health benefits provided by employers, would offer a tax credit to help people buy insurance. That tax benefit — $5,000 for a family — gives people much more than the new taxation takes away.
Over time, the tax credit could lose value as premiums rise faster.
But that's not an argument the Democratic ticket has chosen to make, in speeches, debates and relentless advertising. Running mate Joe Biden mischaracterized the new taxation as the largest middle-class tax increase in history, ignoring the credits in a rhetorical exercise that would flunk Accounting 101.
THAT DARNED BRIDGE
When Palin ran for governor, she indicated her support for a proposal to build a nearly $400 million bridge from Ketchikan, Alaska, to an island with 50 residents and an airport. She was, at times, wishy-washy about it.
But that doesn't make for a compelling line against government waste on the stump.
So her stance became: "I told the Congress 'thanks but no thanks' for that Bridge to Nowhere." And a campaign ad declared she "stopped the Bridge to Nowhere."
Actually, during her governor's campaign, she vowed to defend Southeast Alaska "when proposals are on the table like the bridge, and not allow the spinmeisters to turn this project or any other into something that's so negative." At the time, the chief "spinmeister" against the project was McCain.
As governor, she abandoned the bridge after Washington pulled the money from it, letting the federal dollars be used for other projects in the state.
In September, her transportation department completed a $25 million gravel road to nowhere. Officials went ahead with the road, which would have led to the bridge, even though it has no purpose other than for foot races, hunting vehicles and possible future development.
GUILT BY ASSOCIATION
William Ayers, a University of Illinois education professor and former member of the radical Weather Underground, was front and center in Republican claims that Obama was "palling around with terrorists," as Palin put it. Ayers had a meet-the-candidate event in his home for Obama early in the Democrat's political career. The two served on the board of the Woods Fund. And they live in the same neighborhood.
McCain and Palin stretched the extent of that relationship to link Obama with shadowy figures.
Beyond that, they falsely implied that Ayers used the occasion of the Sept. 11, 2001, attacks to wish even greater harm.
"We don't care about an old washed-up terrorist and his wife, who still, at least on Sept. 11, 2001, said he still wanted to bomb more," McCain told a rally.
This distortion originated in Hillary Rodham Clinton's playbook during the primaries, when she criticized Obama for the same relationship.
Ayers, Clinton said, made comments "which were deeply hurtful to people in New York and, I would hope, to every American, because they were published on 9/11, and he said that he was just sorry they hadn't done more."
By coincidence, The New York Times published a story on the day of the attacks about Ayers and what he called his fictionalized memoirs. The story was based on an interview he had done earlier, in Chicago, in which he declared, "I don't regret setting bombs," and "I feel we didn't do enough," even while seeming to dissociate himself coyly from the group's most destructive acts.
Late in the campaign, McCain and Palin criticized Obama for attending a 2003 party for Rashid Khalidi, a Palestinian-American professor and critic of Israel. But McCain is also linked Khalidi. The professor was a founder of the Center for Palestine Research and Studies, which received $448,000 from an organization McCain chairs.
$4 billion: "John, you want to give oil companies another $4 billion" in tax breaks, Obama told McCain in a debate.
In fact, McCain supports a cut in income taxes for all corporations, and doesn't single out any one industry for that benefit.
$2,500: That's how much Obama says his health care plan will bring down costs for a family of four.
Obama's plan does not lower premiums by $2,500, or any set amount. Obama hopes that by spending $50 billion over five years on electronic medical records and by improving access to proven disease management programs, among other steps, consumers will end up saving money. He uses an optimistic analysis to suggest cost reductions in national health care spending could amount to the equivalent of $2,500 for a family of four over time. Even if savings that large are achieved — economists are highly skeptical — not every dollar is bound to be passed on to consumers.
_94: That's how many times McCain and Palin say that Obama has voted for tax increases or not to support a tax cut.
This inflated count includes repetitive votes as well as votes to cut taxes for the middle class while raising them on the rich. An analysis by factcheck.org found that 23 of the votes were for measures that would have produced no tax increase at all, seven were in favor of measures that would have lowered taxes for many, 11 would have increased taxes on only those making more than $1 million a year.
_$882 billion: "Senator McCain would pay for part of his plan by making drastic cuts in Medicare — $882 billion worth," Obama said. Obama ads claim McCain would cut benefits by 22 percent.
McCain's plan proposes neither. He wants to save money the same way Obama wants to — by making programs such as Medicare more efficient.
Obama's claim misrepresents what a McCain adviser said in a Wall Street Journal story and adds distorted analysis from a partisan think tank to come up with something that goes against what McCain says he would do — protect promised benefits from being cut.
Rich Wall Street Brokers and Bankers for U.S. Congressman Har0ry Mitchell
More news on the band of theives in Washington D.C.