Much to My Amazement
UPDATE: It gets even stranger. The bankrupt-since-October-2008 Lehman Brothers is going to pay $50,000,000 in bonuses for this year. (h/t alea’s Twitter feed)
It appears all of the “gosh, we really made a lot of money from bailing out rich bankers who socked it to their customers” rhetoric is having a small problem in the realization:
The U.S. government abruptly shelved plans to start trimming its 34% stake in Citigroup Inc., after investors demanded a price so low that the Treasury Department would have lost money on the deal….
The huge offering encountered a lukewarm reception on Wall Street, where investors were skeptical of the company’s earnings prospects…
Gosh, golly, gee. Really? I wonder if that’s a recent phenomenon:
(Recession period—still not officially over—shown in cyan.)
Hmmm. Guess not. Ah, well, there’s always next year. Or the year after. Or…
“Surprise! Surprise! Surprise!” — Gomer Pyle, USMC
Lehman hasn’t gone bankrupt again have they? And no one lined up for bonuses has been actually indicted for anything, right? By Wall Street standards, that’s got to be worth $50,000,000, right?
How about we scour the VA hospitals for wounded veterans and put a crew of them to work at generous (by government standards) salaries cleaning up this mess? They are unlikely to do any worse than the suits and will probably do better. The suits? Draft them, form them into work crews. Put em to work tearing down the facilities at Guantanamo Bay and remediating the place. (Hey, it worked for the Chinese).
OK, OK, I’m kidding about re-educating the Lehman people. That’d be vindictive, and they are probably unsuited to real work anyway.
Just fire them.
A windfall profits tax on bonuses is sounding better and better.
Regarding multi-million dollar bonuses for bankers, or anyone else for that matter. What was the lifetime compensation for Dr. Jonas Salk, the man who almost single handidly stopped polio in its tracks? What might be the economic value of his work? All of this talk recently concerning the compensation of people who do little more than move money from place to place has become absurd. What one person’s work can be valued as worthy of a King’s ransom? The one effective means of keeping individual compensation at some rational level is to set the higher marginal rate at a high enough level to make such personal earnings of little real value to the individual. No one does anything worth millions of dollars each year.
So Treasury announces it will dump a boatload of Citi stock, just about the time Citi announces a public offering. Bids at the public offering come in low. Who could have guessed? So Treasury announces that it will hold off selling its boatload for 6 to 12 months, waiting for better prices. Will anyone be surprised if Citi underperforms the banking sector in general, given the risk that any rise in Citi share prices will be met with a boatload of shares being dumped by Treasury? Stikes me as a bad way to protect tax-payer interests.
Meanwhile, does Treasury’s decision to delay the sale of Cit shares mean Congress will raise questions about the IRS decision to allow tax treatment of Citi’s losses that is unfavorable to tax payers?
slugs – That was funny! And right on target!!! 🙂
Islam will change