Over the course of this decade, Wall Street banksters have looted more than $100 BILLION from their corporate coffers, in bonuses alone. This includes stealing more than $10 billion in bonuses last year – when they required trillions of dollars in emergency hand-outs to prevent their entire sector from being vaporized by their own reckless gambling.
Now, a year later, these professional thieves are already planning on breaking all their previous records for greed, at a time when these companies are seeing falling revenues, and rising loan losses based on the same series of reckless bets that nearly bankrupted them all last year. Were it not for their success in pushing the government 'regulator' (for lack of a better word) to endorse new, fraudulent accounting rules, most (if not all) of Wall Street would still be reporting multi-billion dollar losses every quarter (see “FASB strong-armed into mark-to-fantasy accounting”).
Anyone inside or outside Wall Street who claims otherwise simply cannot be taken seriously. Residential mortgages, auto loans, student loans, and credit card debt are all simultaneously at record default rates. Commercial real estate had been lagging this collapse, but with the entire commercial real estate market losing 25% of its value in just the last year (according to a Reuters article), it's catching up fast.
Much of this debt has been leveraged by Wall Street, by a minimum of 10:1, with a lot of their reckless gambling still being done at 30:1, or more. At even 10:1 leverage, a 10% loss on the underlying asset takes Wall Street's bets down to zero. The U.S. commercial real estate market is roughly $6.7 trillion in size. Thus, it's very probable that Wall Street is currently sitting with hundreds of billions of dollars in losses in this one sector alone, which it is allowed to hide through fraudulent accounting rules – and with more/bigger losses facing them in the future.
As that Reuters article points out, for the last couple of years, hundreds of billions of dollars of highly-dubious, commercial debt has simply been “rolled over”, creating a building mountain of refinancing needs – at a time when there isn't enough credit available to meet demand for new loans.
Given these parameters, it is very clear what Wall Street has proven itself good at: lying and stealing. It has also shown what it is not good at: making loans, packaging and selling financial products, and managing their own balance sheets. Conventional wisdom would suggest that these criteria should be the primary determinants as to whether a banker is entitled to a “performance bonus”.
Based on those parameters, what Wall Street should be doing is deciding how many of these incompetent clods should be fired – with there being absolutely no basis for handing out any “performance bonuses”.
Yes, some divisions of these fraud-factories have turned a profit recently. The obvious question to ask, especially to all the small-business owners out there is this: how well do you think you could do if you could borrow infinite amounts of money at zero percent interest? Better yet, imagine how your life would be if the same bank that loaned you money at 0% would pay you more than 1% interest just to leave some of that borrowed money with them?
Yet these same arrogant, incompetent oligarchs now once again feel entitled to loot tens of billions of dollars from their own corporate coffers – with all of it being taxpayer hand-outs. The Washington Post is reporting that just the six largest U.S. banks are now planning on handing themselves $74 billion in salaries and bonuses this year.
Thus, when we look at what Wall Street has done, and we look at what they are paying themselves for what they have done, it is clear that Wall Street pays itself not on how well its employees perform as bankers and brokers, but how successful they are at lying and stealing.
Earlier this decade, their bonus-orgy was based on scamming the world for trillions of dollars through their massive, Ponzi-scheme (see “U.S. bank-fraud SYSTEMIC and INTENTIONAL – William Black”). Now, they are getting even bigger bonuses for being able to steal trillions from their own government (and U.S. taxpayers), while simultaneously being able to get away with hiding trillions in losses on their balance sheets.
If we need any further evidence that Wall Street compensation has nothing to do with competence, we need only look at Hank “Bazooka” Paulson's recent performance testifying before Congress. To suggest he appeared clumsy and inept would be incredibly kind. Here is a man who obviously requires assistance when performing complicated tasks – like tying his shoes.
Yet, Henry Paulson is the former CEO of Goldman Sachs. As we are told on a nearly-daily basis (most often from Goldman Sachs, itself) this company represents the best-and-brightest of Wall Street. Assuming that the CEO of Goldman Sachs is not a purely ceremonial post, handed out to the longest-serving janitor, then presumably the CEO is the best-and-brightest of Goldman Sachs.
Henry Paulson is a walking advertisement of what a Wall Street banker is really worth – and its only a microscopic percentage of the $74 billion being paid out at the six biggest members of the U.S. financial crime syndicate.
[Disclosure: I hold no position in Goldman Sachs]