Will banks like Citi pay out bonuses using bailout funds? Citi plans to distribute $26 billion after receiving $25 billion from you and me. Will the public let them get away with it? Given the tremendous value destruction they've caused, on Wall Street and beyond, how can top executives at these companies justify any bonus compensation for themselves?
After leaving the Clinton administration, how did Rahm Emanuel make $16 million in two years (at Wasserstein Perella) with no prior business experience? Did you really think Obama was going to be a radical left president?
Michael Lewis, Bloomberg commentary:
It may still take awhile before Wall Street finally accepts that it won't get paid.
At the moment, as their bony fingers fondle the new taxpayer loot, the firms appear to believe that they might still fool the public into thinking that bonus money isn't taxpayer money.
``We've responded appropriately to the attorney general's request for information about 2008 bonus pools,'' a Citigroup Inc. spokeswoman told Bloomberg News recently, ``and confirmed that we will not use TARP funds for compensation.'' But as the Bloomberg report noted, ``she declined to elaborate.''
As well she might! For if the Citigroup spokeswoman had elaborated she would have needed to say something like this: ``We're still trying to figure out how the $25 billion we've already taken of taxpayers' money has nothing to do with the $26 billion we're planning to hand out to our highly paid employees in 2008 (up 4 percent from 2007!). But it's a tricky problem because, when you think about it, it's all the same money.''
...If you are one of those people currently sitting inside a big Wall Street firm praying for some kind of bonus it may already have dawned on you that you need to rethink your approach. It's no longer any use to hint darkly that they had better fork over serious sticks or you'll bolt for Morgan Stanley. There's no point even in thinking up clever ways to make profits for your firm: who cares how much money you bring into Goldman Sachs if the U.S. Congress doesn't allow Goldman Sachs to pay bonuses?
The moment your firm accepted taxpayer money, you lost control of your money machine. ...
More from Michael Lewis at Portfolio Magazine (via Paul Kedrosky).
Figure from earlier post: Is the finance boom over?