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3/06/2010

High pay who pays

The Diary of a Singaporean Mind has a pretty meaty article on the issue of high pay by the bank robbers in America and did a little correlations with the high pay in the Singapore context. I quoted a small extract of his quote: Kenneth Feinberg[Link] is Obama's "pay czar". After the US govt bailed out major banks, Fienberg was appointed to make sure bankers don't go back to their old bad habits of paying themselves tens of millions given the outrage among the general public for the bailout. Yesterday Fienberg appeared on CNBC because Maria Bartiromo was doing a segment on Wells Fargo executives wanting to double their own pay. Because Wells Fargo had already returned the TARP money, Feinberg has no juristriction over them and can't do anything about it - all he could do was give his opinion on the matter. This was what he said. Very often bankers would come to him to authorise fat bonuses or pay hikes saying that the executive is "especially talented" or he might be poached up by a foreign bank. He would ask for proof this "talent" and in every single case he found the person replaceable without loss to the company. It was mostly, in his own words,"spin" - bankers over the years have been very creative at manufacturing justifications for their high salaries even as they were about to cause a lot of economic pain to the rest of the population through their careless lending. Buffett asked why the CEO pay has gone from 50 times the lowest paid worker in the company in the 1950s to 500 then to 5000 times - is the CEO today 100 times more productive today? Not possible. The low down people must never ignore this issue of high pay. It comes from everyone's pocket. The banks are not paying the bankers. It is the ordinary folks. The high pay checks of the banks must come from more profits and this will be squeezed all the way down to the people in the street who thought they have nothing to do with it. But they do. Everything will be more costly, services and goods, to keep the robbers fed. Banks cannot feed the robbers with 1 or 2% interest rates. They must schemed all kinds of toxic instruments to muster enough money to pay themselves. At the worst, they will cook the books, hide the losses until it cannot be hidden anymore. It is so easy to churn the books from loss making to profit making, like Greeece. And oh, most of the major banks were in the same boat. That's how they got busted and needed public fund to write off their debts. The immediate turnaround to profitability in the hundreds of billions is fiction. Something fishy must be going on inside those bank books.

8 comments:

Wally Buffet said...

It is not only the Mafiaso or the Triads who are holding regular meetings in some dingy restaurants. The crooked bankers do it too but perhaps in some KTV den same as those frequented by the current diplomatic celebrity. What is discussed is the same. Carving of turfs and profit reports from nefarious activities in the case of organised crime and how to suck more blood from depositors, the gullible public and shareholders in the case of the Bank robbers. It's all the same. One is hunted by law enforcement agencies, the other is extolled by many as model citizens because everything is done "legit".

It is a zero sum game. For every additional buck that they are paying themselves, someone has to pay and that someone is you and me.

Anonymous said...

Kenneth Feinberg says that

"As part of his policies, he has suggested to many bank executives that they emphasize long-term stock compensation rather than cash payments.[6]"

Does that resonate with you when millions dollar PAP clowns keep emphasizing that citizens should look for long term when in fact those clowns are paying themselves millions as salary in short-term ?

Anonymous said...

As part of his policies, he has suggested to many bank executives that they emphasize long-term stock compensation rather than cash payments.[6]

from

http://en.wikipedia.org/wiki/Kenneth_Feinberg

Anonymous said...

Of course, it is the common people with savings that suffers. The banks pay you a measly rate of interest of a fraction of a percent, while they lend your money out for ten times that rate, over and over again.

More often than not, that someone is always you and me. But what can we do?

Matilah_Singapura said...

It is a ruse. The government "pretends" to protect the average hapless citizen by superb Academy Award standard acting.

In actual fact, they are buddy-buddy with their corporate buddies -- you know, those big donors to the politicians political campaigns. Govt and Big Business have been going out to lunch and dinners from the beginning. They attend the same conferences and belong to the same private clubs.

Prepare to see more record "bonuses" and continue scratching your head whilst waiting for the angels of "fairness" or "justice" to fly down from heaven.

Nobody's coming to save anyone.

Anonymous said...

Can someone please explain why in a country with few begging, there is almost daily large scale charity drive in SIN ???

Chua Chin Leng aka redbean said...

We have upgraded the skills of our beggars. Begging is now an art for celebrities.

Anonymous said...

I'll be dammed.

Deng was right. He said whether it is a black cat or a white cat does not make any difference, as long as it catches mice.

So, beggars in rags or beggars in suits makes no difference.

It is just a matter of interpretation.