Is the bailout working?

[LegendKiller]

Originally posted by: brandonbull
Companies should not be allowed to take any of the "bailout" money if they plan to pay any bonuses or dividends. If people don't like not getting a bonus, they can quit and see how they like getting no money.

Anyone claiming they are working 100+ hours a week is an idiot. Working that much puts you at about a 2 on the 1- 10 productive scale.

Depends. I can keep that pace up quite a bit, if I can go home and get 7+ hours of sleep, plus sleep on the train to and from, and get plenty of coffee and eat right.

One day of 5 hours of sleep and I am toast though. It requires a lot of work from my wife, which puts strain on our relationship but she'd rather see me employed.

I am in a hard-hit area, so I *have* to do it. However, if you're in a profit area this year, you're working your ass off, and you have offers to go elsewhere, not paying you will entice you to leave.

If the bank declines, then what good is the investment in it?

 

[First]

Originally posted by: shafeen
i read somewhere that the bailout could take atleast 2 months to show its effect

At the least.

 

[techs]

Originally posted by: Evan

Originally posted by: shafeen
i read somewhere that the bailout could take atleast 2 months to show its effect

At the least.

Well, there certainly was an immediate effect on the markets. Which is what I was getting at. I don't know how it will play out in the long run, but the immediate results were, actually, quite impressive.

 

[ElFenix]

Originally posted by: LegendKiller

Nor do they understand that in order to retain people who *ARE* performing they have to be paid. Those people will be paid anywhere they go, so why not maintain the investment the people have put into the companies?

you're assuming they have somewhere else to go

 

[TallBill]

Originally posted by: Skoorb
Too early to totally conclude, but I suppose things could be worse.

 

[sandorski]

There are some signs that the "Bailout" is having the desired effect. Many who were having difficulty getting Lines of Credit are begining to see those difficulties disappear.

 

[halik]

Originally posted by: brandonbull
Companies should not be allowed to take any of the "bailout" money if they plan to pay any bonuses or dividends. If people don't like not getting a bonus, they can quit and see how they like getting no money.

Anyone claiming they are working 100+ hours a week is an idiot. Working that much puts you at about a 2 on the 1- 10 productive scale.

You'd be surprised, most of the 100hr crunch time is back and forth editing models and pitch books and what not... not too much of critical thinking.

 

[StageLeft]

Originally posted by: LegendKiller

Originally posted by: gar3555

Originally posted by: LegendKiller

And you still have no fucking clue why the rescue plan was needed. I won't try and explain it to you, since it's been tried multiple times.

No, he is arguing about the appropriation of the bailout. If GS made a profit, why are they paying out bonuses using money intended to bail out a struggling company/prop up credit?

BSC, LEH, nor Goldman, ever really needed a bailout. They just needed positive publicity.

So does this mean you do agree with me? A company taking bailout cash and then funneling tons of money to bonuses has nothing to do with why the bailout was "needed".

you're assuming they have somewhere else to go

Exactly my point. And if they have somewhere, let them go.

 

[LegendKiller]

Originally posted by: ElFenix

Originally posted by: LegendKiller

Nor do they understand that in order to retain people who *ARE* performing they have to be paid. Those people will be paid anywhere they go, so why not maintain the investment the people have put into the companies?

you're assuming they have somewhere else to go

What's funny is that you still don't even get it.

Banker A makes the Bank A $10MM profit in one year. He gets a bonus of $1M. Taxpayers didn't help out Bank A because they are a foreign bank (say, Deutsche Bank).

Banker B makes the Bank B $20MM profit in one year. He gets no bonus because American's invested $10MM in the bank and bitched that it was no fair.

Banker B says "fuck that, I make plenty of profit, I work my ass off, and these ungreatful asses give me nothing". He then goes to Bank A and gets a $5MM signing bonus. After that, Bank B has $20MM less profit, leading to a complete elimination of the $10MM investment Americans made plus a reduction of $10MM beyond that, completely putting the investment underwater.

Meanwhile, Banker B's revenues go into the German tax system, resulting in greater revenues for the Germans. Win-Win for them.

That scenario is being played out right now. LEH employees who made a shit-ton of money for the bank, weren't bailed out by the US, and now they're working for Barclays, pushing shit-tons of money into that bank.

BSC? Great, Japanese banks bought up successful sectors for a fraction of their worth. Now they're paying big bonuses to retain employees.

This isn't a company who makes a single item, say widgets, and that's their only profit center and no other area of the company can make (or lose) money. Banks have many profit centers, all of which can make (or lose) money. Compensation of that profit center needs to be handled independantly, otherwise that profit center *WILL* go elsewhere.

Even in this environment I've seen groups of 50 people at one bank go to another because they got boned on bonuses. Provided you *DO* add value above your compensation and you're not getting compensation, another bank WILL value you higher.

Get it now?

 

[mooseracing]

I don't see it working, it is ruining capitalism and the US is trying to play God again. At least the Govt. turned down GM for the additional finds if they got married to Chrysler.

I think most of the positives (and negatives of a "recession") currently happening are placebo effects though.

 

[LegendKiller]

Originally posted by: Skoorb

Originally posted by: LegendKiller

Originally posted by: gar3555

Originally posted by: LegendKiller

And you still have no fucking clue why the rescue plan was needed. I won't try and explain it to you, since it's been tried multiple times.

No, he is arguing about the appropriation of the bailout. If GS made a profit, why are they paying out bonuses using money intended to bail out a struggling company/prop up credit?

BSC, LEH, nor Goldman, ever really needed a bailout. They just needed positive publicity.

So does this mean you do agree with me? A company taking bailout cash and then funneling tons of money to bonuses has nothing to do with why the bailout was "needed".

you're assuming they have somewhere else to go

Exactly my point. And if they have somewhere, let them go.

Not every company *needed* a bailout because of their current position. They needed one because the erosion of confidence would have caused a problem in their *FUTURE* position.

Why let them go? Why not keep them at that bank that we've put money into so they can earn a profit and repay our investment + more?

Let me guess, you're one of those guys who loves shooting themselves in the foot?

 

[LegendKiller]

Originally posted by: mooseracing
I don't see it working, it is ruining capitalism and the US is trying to play God again. At least the Govt. turned down GM for the additional finds if they got married to Chrysler.

I think most of the positives (and negatives of a "recession") currently happening are placebo effects though.

Please, it's not even getting close to "ruining capitalism". Enough with the hyperbole.

part of the reason we got to this situation is the idea that "free markets" will kill the weak and strengthen the strong. Sorry, but when it comes down to it, just like parenting, the ones that can get away with mischief will do so.

 

[piasabird]

Scrooge is going to have a good Christmas while everyone else suffers.

 

[StageLeft]

Originally posted by: LegendKiller

Originally posted by: ElFenix

Originally posted by: LegendKiller

Nor do they understand that in order to retain people who *ARE* performing they have to be paid. Those people will be paid anywhere they go, so why not maintain the investment the people have put into the companies?

you're assuming they have somewhere else to go

What's funny is that you still don't even get it.

Banker A makes the Bank A $10MM profit in one year. He gets a bonus of $1M. Taxpayers didn't help out Bank A because they are a foreign bank (say, Deutsche Bank).

Banker B makes the Bank B $20MM profit in one year. He gets no bonus because American's invested $10MM in the bank and bitched that it was no fair.

Banker B says "fuck that, I make plenty of profit, I work my ass off, and these ungreatful asses give me nothing". He then goes to Bank A and gets a $5MM signing bonus. After that, Bank B has $20MM less profit, leading to a complete elimination of the $10MM investment Americans made plus a reduction of $10MM beyond that, completely putting the investment underwater.

Meanwhile, Banker B's revenues go into the German tax system, resulting in greater revenues for the Germans. Win-Win for them.

That scenario is being played out right now. LEH employees who made a shit-ton of money for the bank, weren't bailed out by the US, and now they're working for Barclays, pushing shit-tons of money into that bank.

BSC? Great, Japanese banks bought up successful sectors for a fraction of their worth. Now they're paying big bonuses to retain employees.

This isn't a company who makes a single item, say widgets, and that's their only profit center and no other area of the company can make (or lose) money. Banks have many profit centers, all of which can make (or lose) money. Compensation of that profit center needs to be handled independantly, otherwise that profit center *WILL* go elsewhere.

Even in this environment I've seen groups of 50 people at one bank go to another because they got boned on bonuses. Provided you *DO* add value above your compensation and you're not getting compensation, another bank WILL value you higher.

Get it now?

I don't, but then again I am a moron.

So, let's instead look at it as an actual employee of GS would look at it:

Scenario 1, GS gets its bailout cash:
Superstar employee gets his bonus. He can now decide to leave to go to German bank or stay with GS based on whether he thinks GS will make a bonus next year. This year's bonus has no relevance to next year's one at all.

Scenario 2, GS gets no bailout cash:
Christmas bonus is a $50 GC at the grocery store (which in fact I won't even get, and no I'm not bitching). So, Superstar employee gets no bonus. He can now decide to leave to go to German bank or stay with GS based on whether he thinks GS will make a bonus next year. This year's bonus has no relevance to next year's one at all.

Not every company *needed* a bailout because of their current position. They needed one because the erosion of confidence would have caused a problem in their *FUTURE* position.

And how much confidence will a GS employee have in GS knowing that only because of a bailout are they able to get their bonus?

Why let them go? Why not keep them at that bank that we've put money into so they can earn a profit and repay our investment + more?

There is no requirement in cashing a bonus check that the employee hang around is there? So why would giving them this money have any bearing on them staying? Surely not out of loyalty (lawls).

Let me guess, you're one of those guys who loves shooting themselves in the foot?

You got me, I really do

Sorry, but when it comes down to it, just like parenting, the ones that can get away with mischief will do so.

Well gov is a real shi* parent to be giving GS its allowance after dicking around all school year and coming home with an F, isn't it?