The Free Market Works!

[Ivytalk]

This morning's above-the-fold Wall Street Journal headline: "Wall Street Prepares to Take Big Pay Cut." Goldman Sachs partners' pay will be cut in half. Morgan Stanley bonuses down 30% to 40%. Fixed income sector may be down 60%.

Feeling better now, kalm??

[kalm]

This morning's above-the-fold Wall Street Journal headline: "Wall Street Prepares to Take Big Pay Cut." Goldman Sachs partners' pay will be cut in half. Morgan Stanley bonuses down 30% to 40%. Fixed income sector may be down 60%.

Feeling better now, kalm??

There's no such thing as a free market. But if they paid back the $9 trillion lent to them by the fed it would be nice.

[Ivytalk]

This morning's above-the-fold Wall Street Journal headline: "Wall Street Prepares to Take Big Pay Cut." Goldman Sachs partners' pay will be cut in half. Morgan Stanley bonuses down 30% to 40%. Fixed income sector may be down 60%.

Feeling better now, kalm??

There's no such thing as a free market. But if they paid back the $9 trillion lent to them by the fed it would be nice.

Wishing won't make it so, kalm. Paying for performance is about as close to the free market as you get. But I'm sure public school teachers and other union members would scream bloody murder at the concept. And by the way, plus loss of down and automatic ejection for inaccurate reference to two-year-old non-story. Most of the emergency Fed overnight loans have been repaid. FactCheck said so yesterday after one of Ron Paul's more egregious anti-Fed bloopers. Even Bernie Sanders admitted the fact of substantial repayment. For homework (fiction dept.), I assign you to read the collected works of Alan Grayson.

[kalm]

There's no such thing as a free market. But if they paid back the $9 trillion lent to them by the fed it would be nice.

Wishing won't make it so, kalm. Paying for performance is about as close to the free market as you get. But I'm sure public school teachers and other union members would scream bloody murder at the concept. And by the way, plus loss of down and automatic ejection for inaccurate reference to two-year-old non-story. Most of the emergency Fed overnight loans have been repaid. FactCheck said so yesterday after one of Ron Paul's more egregious anti-Fed bloopers. Even Bernie Sanders admitted the fact of substantial repayment. For homework (fiction dept.), I assign you to read the collected works of Alan Grayson.

Great news! So who has all that money now?

Links please.

[Ivytalk]

Wishing won't make it so, kalm. Paying for performance is about as close to the free market as you get. But I'm sure public school teachers and other union members would scream bloody murder at the concept. And by the way, plus loss of down and automatic ejection for inaccurate reference to two-year-old non-story. Most of the emergency Fed overnight loans have been repaid. FactCheck said so yesterday after one of Ron Paul's more egregious anti-Fed bloopers. Even Bernie Sanders admitted the fact of substantial repayment. For homework (fiction dept.), I assign you to read the collected works of Alan Grayson.

Great news! So who has all that money now?

Links please.

A lot of it was a figure of the left's febrile imagination. Check out the "FACT CHECK" portion of the 1/9/12 CBS MoneyWatch site for a good explanation of how Fed accounting works, and a note the estimated loan total net of repayments is just $1.1 trillion. See also the sensible explanations at http://www.econbrowser.com/archives/201 ... on_in.html" onclick="window.open(this.href);return false; (12/6/11) and http://www.cnbc.com" onclick="window.open(this.href);return false; (12/1/10) ("Did Fed Really Lend $9 Trillion Under Its Primary Dealer Credit Facility?"). You can find the Bernie Sanders quote on one of your favorite sites, http://www.openleft.com" onclick="window.open(this.href);return false; (12/3/10).

[kalm]

Great news! So who has all that money now?

Links please.

A lot of it was a figure of the left's febrile imagination. Check out the "FACT CHECK" portion of the 1/9/12 CBS MoneyWatch site for a good explanation of how Fed accounting works, and a note the estimated loan total net of repayments is just $1.1 trillion. See also the sensible explanations at http://www.econbrowser.com/archives/201 ... on_in.html" onclick="window.open(this.href);return false; (12/6/11) and http://www.cnbc.com" onclick="window.open(this.href);return false; (12/1/10) ("Did Fed Really Lend $9 Trillion Under Its Primary Dealer Credit Facility?"). You can find the Bernie Sanders quote on one of your favorite sites, http://www.openleft.com" onclick="window.open(this.href);return false; (12/3/10).

Well the Bernie Sanders link failed, econbrowser link was involved in a mighty struggle to simplify a complex issue, and the CNBC link...well, need I bring up the Daily Show beat down of CNBC again? I mean really. I'm sorry, but you'll have to do better than that.

[Ivytalk]

A lot of it was a figure of the left's febrile imagination. Check out the "FACT CHECK" portion of the 1/9/12 CBS MoneyWatch site for a good explanation of how Fed accounting works, and a note the estimated loan total net of repayments is just $1.1 trillion. See also the sensible explanations at http://www.econbrowser.com/archives/201 ... on_in.html" onclick="window.open(this.href);return false; (12/6/11) and http://www.cnbc.com" onclick="window.open(this.href);return false; (12/1/10) ("Did Fed Really Lend $9 Trillion Under Its Primary Dealer Credit Facility?"). You can find the Bernie Sanders quote on one of your favorite sites, http://www.openleft.com" onclick="window.open(this.href);return false; (12/3/10).

Well the Bernie Sanders link failed, econbrowser link was involved in a mighty struggle to simplify a complex issue, and the CNBC link...well, need I bring up the Daily Show beat down of CNBC again? I mean really. I'm sorry, but you'll have to do better than that.

You've provided absolutely nothing. Bernie's quote was right in the CNN insert, but you missed it. The left trumpets the " complexity" of the issue, but it's really easy to explain the accounting of the loans. I'm not technically facile with providing links, but you're light on substance. And if you're resorting to the Daily Show for support, I pity you.

[kalm]

Well the Bernie Sanders link failed, econbrowser link was involved in a mighty struggle to simplify a complex issue, and the CNBC link...well, need I bring up the Daily Show beat down of CNBC again? I mean really. I'm sorry, but you'll have to do better than that.

You've provided absolutely nothing. Bernie's quote was right in the CNN insert, but you missed it. The left trumpets the " complexity" of the issue, but it's really easy to explain the accounting of the loans. I'm not technically facile with providing links, but you're light on substance. And if you're resorting to the Daily Show for support, I pity you.

http://www.bloomberg.com/news/2011-11-2 ... ncome.html" onclick="window.open(this.href);return false;

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

And here is Bloomberg's later explanation of the numbers.

http://www.bloomberg.com/news/2011-12-2 ... ublic.html" onclick="window.open(this.href);return false;

Still can't find the Sanders quote you keep mentioning.

And if you still think this is a free market or that Wall Street bonuses reflect real world values I pity you.

[Ivytalk]

You've provided absolutely nothing. Bernie's quote was right in the CNN insert, but you missed it. The left trumpets the " complexity" of the issue, but it's really easy to explain the accounting of the loans. I'm not technically facile with providing links, but you're light on substance. And if you're resorting to the Daily Show for support, I pity you.

http://www.bloomberg.com/news/2011-11-2 ... ncome.html" onclick="window.open(this.href);return false;

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

And here is Bloomberg's later explanation of the numbers.

http://www.bloomberg.com/news/2011-12-2 ... ublic.html" onclick="window.open(this.href);return false;

Still can't find the Sanders quote you keep mentioning.

And if you still think this is a free market or that Wall Street bonuses reflect real world values I pity you.

For the life of me, I can't understand your stubborn refusal to admit that performance-related compensation reflects free market principles. Your basic problem is that you dislike successful people. "Real world values" is your euphemism for reflexive egalitarianism.

[kalm]

http://www.bloomberg.com/news/2011-11-2 ... ncome.html" onclick="window.open(this.href);return false;



And here is Bloomberg's later explanation of the numbers.

http://www.bloomberg.com/news/2011-12-2 ... ublic.html" onclick="window.open(this.href);return false;

Still can't find the Sanders quote you keep mentioning.

And if you still think this is a free market or that Wall Street bonuses reflect real world values I pity you.

For the life of me, I can't understand your stubborn refusal to admit that performance-related compensation reflects free market principles. Your basic problem is that you dislike successful people. "Real world values" is your euphemism for reflexive egalitarianism.

Yep you've got me pegged.

There's no such thing as a free market. But yes, performance related compensation and competition are healthy. I'm also a fan of Danny Ocean and Captain Jack Sparrow getting away with the loot. I like football games with referees...

But now you've done it. You were warned

" onclick="window.open(this.href);return false;

CNBC

[Ivytalk]

Had I followed Jim Cramer's 2008 advice to "sell everything," I'd be a lot worse off than I am now. I guess we can agree on that!

[UNI88]

http://www.bloomberg.com/news/2011-11-2 ... ncome.html" onclick="window.open(this.href);return false;



And here is Bloomberg's later explanation of the numbers.

http://www.bloomberg.com/news/2011-12-2 ... ublic.html" onclick="window.open(this.href);return false;

Still can't find the Sanders quote you keep mentioning.

And if you still think this is a free market or that Wall Street bonuses reflect real world values I pity you.

For the life of me, I can't understand your stubborn refusal to admit that performance-related compensation reflects free market principles. Your basic problem is that you dislike successful people. "Real world values" is your euphemism for reflexive egalitarianism.

Playing Devil's advocate: is CEO pay really 10 based on free-market principles and 2) are the performance standards that drive it really what they should be?

1) How is CEO pay determined? By the Boards of Directors of the corporations for whom the CEO works. Who sits on the Board? In many instances it's CEOs of other companies. Is it in the best financial interests of these board members to drive up the compensation for the CEO so that their compensation is also raised? Is this an incestuous relationship with similarities to public unions using money & manpower to help elect the officials that will ultimately be responsible for determining their compensation & benefits? I'm not arguing that being a CEO isn't a high-pressure job and that CEOs don't deserve to be well compensated but the question is how much more than other employees are they worth?

2) Are the performance standards that drive many CEO bonuses what they should be? Are they too focused on short-term stock market objectives vs. building a company for the long-term? Would a company be better off giving a CEO a bonus because of a gain in the company's market capitalization (potentially gained by laying off 10% of employees to reduce short-term costs but losing valuable industry knowledge that could negatively impact long-term prospects) or creating a trust of some kind that paid a mid-term bonus (5 years) and a longer-term bonus (10 years) based on the company achieving gains in market share, efficiencies, etc.?

[89Hen]

need I bring up the Daily Show beat down of CNBC again?

Wait, I thought the Daily Show was comedy and nobody on the left took it seriously as a news source.

[kalm]

need I bring up the Daily Show beat down of CNBC again?

Wait, I thought the Daily Show was comedy and nobody on the left took it seriously as a news source.

Sometimes comedy is a great source of truth. Go watch Jon Stewart's takedown of CNBC, not just the Kramer one and you tell me which is more credible.

[Ivytalk]

For the life of me, I can't understand your stubborn refusal to admit that performance-related compensation reflects free market principles. Your basic problem is that you dislike successful people. "Real world values" is your euphemism for reflexive egalitarianism.

Playing Devil's advocate: is CEO pay really 10 based on free-market principles and 2) are the performance standards that drive it really what they should be?

1) How is CEO pay determined? By the Boards of Directors of the corporations for whom the CEO works. Who sits on the Board? In many instances it's CEOs of other companies. Is it in the best financial interests of these board members to drive up the compensation for the CEO so that their compensation is also raised? Is this an incestuous relationship with similarities to public unions using money & manpower to help elect the officials that will ultimately be responsible for determining their compensation & benefits? I'm not arguing that being a CEO isn't a high-pressure job and that CEOs don't deserve to be well compensated but the question is how much more than other employees are they worth?

2) Are the performance standards that drive many CEO bonuses what they should be? Are they too focused on short-term stock market objectives vs. building a company for the long-term? Would a company be better off giving a CEO a bonus because of a gain in the company's market capitalization (potentially gained by laying off 10% of employees to reduce short-term costs but losing valuable industry knowledge that could negatively impact long-term prospects) or creating a trust of some kind that paid a mid-term bonus (5 years) and a longer-term bonus (10 years) based on the company achieving gains in market share, efficiencies, etc.?

Without getting into the philosophical issues that you raise, I can tell you as a corporate lawyer that since Enron and WorldCom imploded, and since the regulatory framework of SarbOx and Dodd-Frank has grown up, executive compensation standards have been scrutinized much more carefully. There has also been a marked trend toward boards dominated by outside, independent directors.
Bonus plans that I've seen for public companies have challenging performance metrics that are not geared to short-term profitability.

[UNI88]

Playing Devil's advocate: is CEO pay really 10 based on free-market principles and 2) are the performance standards that drive it really what they should be?

1) How is CEO pay determined? By the Boards of Directors of the corporations for whom the CEO works. Who sits on the Board? In many instances it's CEOs of other companies. Is it in the best financial interests of these board members to drive up the compensation for the CEO so that their compensation is also raised? Is this an incestuous relationship with similarities to public unions using money & manpower to help elect the officials that will ultimately be responsible for determining their compensation & benefits? I'm not arguing that being a CEO isn't a high-pressure job and that CEOs don't deserve to be well compensated but the question is how much more than other employees are they worth?

2) Are the performance standards that drive many CEO bonuses what they should be? Are they too focused on short-term stock market objectives vs. building a company for the long-term? Would a company be better off giving a CEO a bonus because of a gain in the company's market capitalization (potentially gained by laying off 10% of employees to reduce short-term costs but losing valuable industry knowledge that could negatively impact long-term prospects) or creating a trust of some kind that paid a mid-term bonus (5 years) and a longer-term bonus (10 years) based on the company achieving gains in market share, efficiencies, etc.?

Without getting into the philosophical issues that you raise, I can tell you as a corporate lawyer that since Enron and WorldCom imploded, and since the regulatory framework of SarbOx and Dodd-Frank has grown up, executive compensation standards have been scrutinized much more carefully. There has also been a marked trend toward boards dominated by outside, independent directors.
Bonus plans that I've seen for public companies have challenging performance metrics that are not geared to short-term profitability.

I don't doubt that things have improved but I wonder if it's still just small, incremental improvements hoping it's enough to keep the shareholders from storming the castle with their pitchforks.

What is a board that is dominated by outside, independent directors? If I check a bunch of Fortune 500 boards am I still going to find a majority of directors who are current or former CEOs/Chairman of other publicly traded companies?

The Chicago Tribune annually publishes a list of the highest paid local CEO's and when I look at the list I'm more than a little disappointed to see CEOs of companies that are in the toilet making $5-10 million in salary & bonuses. I have no problem with a CEO making a million in salary but if the company is in the toilet his or her bonus should be low to non-existent.

[Ivytalk]

Without getting into the philosophical issues that you raise, I can tell you as a corporate lawyer that since Enron and WorldCom imploded, and since the regulatory framework of SarbOx and Dodd-Frank has grown up, executive compensation standards have been scrutinized much more carefully. There has also been a marked trend toward boards dominated by outside, independent directors.
Bonus plans that I've seen for public companies have challenging performance metrics that are not geared to short-term profitability.

I don't doubt that things have improved but I wonder if it's still just small, incremental improvements hoping it's enough to keep the shareholders from storming the castle with their pitchforks.

Then you and like-minded stockholders should mount a proxy contest and throw them out. The SEC is making it easier to do that.