Comments on: Where Else Are You Going to Go?

By: chindit13

chindit13 — Sun, 25 Oct 2009 11:23:41 +0000

Maybe OXY knows that all traders are one step away from ruin. Example: Boaz Weinstein. One year he’s the highest paid employee at DB $40 million); the next he is the firm’s single largest all-time loser ($1 billion). And no clawback.

By: thoughtbasket

thoughtbasket — Wed, 21 Oct 2009 20:50:42 +0000

You touch on two important issues: one is that the ridiculous profits of some of these trading groups have clearly been partly due to getting cheap capital from their large corporate parents (meaning from the taxpayers, due to their implicit too-big-to-fail credit rating), and the other is that all this talk of needing to pay huge bonuses to retain talent is ridiculous. There are tens of thousands of bankers on the street who would kill for any job at GS, JPM or other surviving firms. Or will the traders move to Europe to get higher pay? Not likely.

I posted something similar a couple of months ago: http://thoughtbasket.com/2009/08/18/bankers-moving-for-higher-pay-go-ahead/

By: Silke

Silke — Wed, 21 Oct 2009 11:42:47 +0000

I’m missing one point in the list:

media tell me that management’s job description includes that it is responsible for the whole operation and that that is the reason it needs to be “adequately” paid

so whether they knew or didn’t know is irrelevant, they took cash for a job they didn’t deliver and that is fraud, (whether it is fraud that can be prosecuted is probably another matter)

same as if I go to the market wanting to buy tomatoes and the guy takes my money and refuses to hand over the tomatoes

btw what about religious leaders condemning them? or are those busy praying for their souls to remain unharmed by the havoc they wreaked?

By: pete muldoon

pete muldoon — Wed, 21 Oct 2009 01:04:33 +0000

It’s likely management really doesn’t know what’s going on at the trading desks, and is unwilling to upset the apple cart.

What management does know is that it’s raking in billions, and buying loyalty from traders. Shareholders aren’t about to complain, because they don’t want to rock the boat either.

Management’s job is to keep the taxpayer on the hook, and the regulators in the dark.

The traders’ job is to rent-seek, gamble, and take advantage of the near monopoly on trades that management has given them.

The shareholders just need to shut up and be happy with what they get, because they could have gotten wiped out last year. I’m sure they realize that now.

By: Charles N. Steele

Charles N. Steele — Wed, 21 Oct 2009 00:20:48 +0000

My question: what would we expect GS mgmt, etc. to be doing with its profits, other than paying themselves off.

As J.B. Hicks suggests, it does look suspiciously like asset stripping.

By: Wendy

Wendy — Tue, 20 Oct 2009 12:45:34 +0000

I think that´s what they´re trying to do with Raj at Galleon, but I think it smells like a fish. So he´s made $5 million on Hilton stock and he´s managing 3.7 billion. Even if he made the full 20 million, and not some of the other people who have been arrested, that´s mice nuts percentage wise, especially over a couple of years. I don´t know, there´s something about it I really don´t like. Hey, if he did something illegal, then fine, but no one is willing to touch the big boys at GS, etc.

By: tc

tc — Tue, 20 Oct 2009 00:54:08 +0000

Or the damage they could do INSIDE Goldman. If you piss those boys off, do you think they will give their 2 weeks notice and then get escorted out by security prompty with severance pay? Don’t you think they’d rather trash the company and then go out with a shrug of their shoulders saying they had a bad day.

By: drdj

drdj — Mon, 19 Oct 2009 22:10:18 +0000

Nothing would do more to clean up Wall Street and the TBTF
financial industry than to convene some special grand juries. The sight of having people in handcuffs being led in groups to the federal lockup with indictments for violations of federal
RICO/fraud statutes would both sober up Wall street and improve the spirits of Main street. Employing another 1000
FBI agents to investigate financial crimes would be money well spent. The financial industry doesn’t need the best and the brightest; it need the most ethical people for its next generation of employees.

By: Jessica

Jessica — Mon, 19 Oct 2009 19:56:55 +0000

For any lawyers or aspiring lawyers in the group:

Is not antitrust law intended to confront those entities that threaten competition or monopolize commerce? Does not TBTF imply that Goldman has the ability to destroy the economy? Why not too big for the antitrust axe?

Could the answer be that Goldman was the second largest contributor to the Obama campaign with a contribution of $994,795. ($230,095 to McCain who never lead in the polls) and we cannot forget the $3.3 million Goldman spent lobbying our esteemed public servants in 2008 or the $2.7 million in 2007.

By: wallst

wallst — Mon, 19 Oct 2009 19:32:52 +0000

perhaps i’m the only person on wall st. that reads this blog and feels compelled to post something. I hate to say but big contracts are out there again, without being specific there are banks (foreign and domestic) that are paying size 2yr g’teed deals $$$ left and right and some firms have been severely damaged on the talent scale as a result. as for the hall thing, deals a deal and if they guy made you $300-odd million pay the guy.. its not his fault the rest of your firm sucked.

By: Jessica

Jessica — Mon, 19 Oct 2009 19:22:14 +0000

“Oxy bought the business for its liquidation value.”

In March of this year there were many decent companies trading on the NYSE at liquidation or net asset value, but I am willing to bet that finding such companies was a virtual impossibility on Oct. 9. I read that “Citigroup…said certain Phibro executives had agreed their 2009 compensation would be deferred and reinvested in Phibro, and paid out in future years.”
“Occidental said Phibro’s senior management team had agreed to make a significant investment in the business and receive returns dependent on the company’s future performance.”
http://www.cnbc.com/id/33239696

Does this mean that OXY actually paid significantly less than $250 million for Phibro because of the investment agreement?

It was reported that Phibro does not trade in exotic derivatives but that does not rule out the possibility that OXY may have purchased derivatives directly from Citigroup.

By: Sandi

Sandi — Mon, 19 Oct 2009 18:32:16 +0000

They don’t call it “GOLDman Sachs” fer nuthin’

By: joedee1969

joedee1969 — Mon, 19 Oct 2009 18:03:35 +0000

Wall Street and this White House are hurting so many Americans:

http://americaspeaksink.com/2009/10/how-obama-lost-reelection-for-the-presidency/

By: Uncle Billy Cunctator

Uncle Billy Cunctator — Mon, 19 Oct 2009 17:45:43 +0000

Well, perhaps the fact that Goldman has banned viewing of Gawker.com on their computers and blackberries, is some indication. Gawker recently went to war by opening up “The Goldman Project”:

http://gawker.com/5384869/goldman-sachs-censors-gawker

By: Silke

Silke — Mon, 19 Oct 2009 17:08:46 +0000

compliance? – obedience?

and it may even be that they can convince some to convince themselves that compliance is for the greater good and bonusses are honestly earned
I imagine the argument goes something like when the bomb hits the ground too many get injured so the decent thing is to keep tossing it around …