November 5, 2009

“It’s Gonna Be A Good Christmas”

Filed under: Dance of Death — Russell Bangs @ 3:31 am
And you were worried about Christmas:

Now is the time of year when a Wall Streeter’s fancy turns, not so lightly, to thoughts of bonuses.

Inside major financial companies, the annual rite of tallying bonuses is about to begin, with a sense of relief and even elation that would have been unthinkable only a year ago. After all those federal bailouts, many banks are turning handsome profits. Top producers are looking forward to blowout paydays once again.

Yes, things are looking good on Wall Street. It may be cold outside in the for real people, but the sun is shining on the Ancien Regime. All the plans of the Fed or the pay czar to regulate this Winter Palace are just throwing sand against the wind.
In particular, the good earners, the soldiers, are getting a nice piece of this year’s take:

What is most remarkable about the estimate, compiled by Johnson Associates, is how quickly pay is expected to rebound for traders — Wall Street’s current kings and queens of ka-ching.

For people who trade bonds, commodities and currencies, bonuses are expected to soar as much as 60 percent, to around their pre-crisis levels. A typical senior fixed-income trader can expect a total pay package of about $930,000 in cash and stock, compared with a package last year of about $695,000. Paychecks for stock and derivatives traders are likely to jump by half that much. Bonuses for investment bankers, by contrast, are projected to rise 15 to 20 percent. Star performers could see their paychecks surge even higher.

As Robert De Niro’s Jimmy Conway says in Goodfellas, “It’s gonna be a good Christmas!”
But what about this?

“This is a year of two different worlds,” said Alan Johnson, of Johnson Associates. “It’s not a broad-based recovery.”

Surely he’s referring to the abyss between Wall Street and Main Street?
Not at all! As the NYT’s Eric Dash concurs:

But while the economic fortunes of Wall Street and Main Street have diverged, so too have the fortunes of certain employees within the financial industry. This will be an unusually lopsided year for bonuses. While traders are looking forward to fat bonuses, payouts for people working in asset management, corporate and retail banking and the insurance businesses are expected to be flat or even down, according to the study.

Given the decline in the once-booming mergers and acquisition business, bonuses for certain dealmakers could fall 10 to 15 percent. And the once-gilded paychecks of hedge fund managers are expected to decline 15 to 25 percent. Private equity executives will be among the hardest hit, with their year-end bonuses falling 20 to 25 percent as they struggle to sell many of their investments.

Still, it’s good to see that they acknowledge the real suffering in the world as we enter the holiday season.
This is nothing but divvying up the stolen loot, every cent of it heisted from the taxpayers.
1. None of them would even exist without the bailouts.
2. Cash is fungible, and if there’s even one cent of public money or risk exposure outstanding, that’s our cent they’re using for “bonuses”.
3. The TARP is just the tip of the iceberg, so paying it back is a minor step on a long road toward self-sufficiency whose end is in fact impossible for these zombies to achieve. There’s the TALF, the other facilities, FDIC guarantees and other backstops. Twenty four trillion dollars outstanding. They owe every cent of that.
4. Even if they paid every outstanding cent, there would still be the Too Big To Fail premium.
That’s our money. All of it.
Yet they think God is their copilot.

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