Friday, August 07, 2009

'Toontime: Spare Change

[credit: Mike Luckovich, Atlanta Journal-Constitution]

New York Attorney General Andrew M. Cuomo concludes in his report on bank executive compensation, "...compensation for bank employees has become unmoored from banks' financial performance." Fittingly the title of his report is "No Rhyme or Reason: the 'Heads I Win, Tales You Lose' Bank Bonus Culture". Citigroup and Merrill Lynch suffered losses of more than $27 billion at each firm. Citigroup paid out $5.33 billion in bonuses, and Merrill Lynch paid $3.6 billion in bonuses. Three other investment banks, Goldman Sachs, Morgan Stanley and JP Morgan Chase paid bonuses substantially greater than the banks' net income. While paying their executives shamelessly, the banks are forcing defaulting homeowners to the wall. Only 9% of those who qualified for assistance under the administration's homeowner foreclosure prevention plan have been accepted into trial programs to have their mortgage terms modified. One of the largest holder of distressed mortgages, Bank of America has allowed only 5% of its eligible mortgagors into the program. Citigroup has allowed 15%, and Wells Fargo has accepted 6%. Wackydoodle sez: Seems like yer 'nother day older 'n deeper in debt, while the boys get a free lunch.