NY AG: Before Losing $15 Billion, Merrill Lynch Quietly Made 696 Employees Millionaires

New York Attorney General Andrew Cuomo wrote a letter yesterday to Rep. Barney Frank (D-Mass.), head of the House Financial Services Committee, (which is currently holding hearings Washington on how banks are spending bailout funds.) In the letter, Cuomo expresses concern that Merrill Lynch moved up their bonus schedule so that they could make sure that taxpayers would get the bill.

As you probably know, Merrill Lynch posted a $15.31 billion loss in the 4th quarter, which forced taxpayers to help Bank of America acquire the firm.

Cuomo writes:

One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding. We plan to require top officials at both Merrill Lynch and Bank of America to answer this question and to provide justifications for the massive bonuses they paid ahead of their massive losses. As you know, my Office recently issued subpoenas seeking the testimony of former Merrill Lynch CEO John Thain, as well as the testimony of Bank of America Chief Administrative Officer J. Steele Alphin. I expect we will also be seeking the testimony of other top executives at these firms.

In addition, the AG goes on to bust the myth that Merrill’s hefty bonuses were spread out among a wide swath of employees, and were therefor actually quite modest. It turns out that while they did pay bonuses to some 39,000 employees, Merrill made 700 employees millionaires overnight. Cuomo says, “the vast majority of these funds were disproportionately distributed to a small number of individuals.”

Cuomo writes:

Bearing in mind that Merrill moved up its bonus payments in advance of its announced $15 billion quarterly loss and $27 billion annual loss, we have determined that Merrill Lynch made the following bonus payments:

  • The top four bonus recipients received a combined $121 million;
  • The next four bonus recipients received a combined $62 million;
  • The next six bonus recipients received a combined $66 million;
  • Fourteen individuals received bonuses of $1 0 million or more and combined they received more than $250 million;
  • 20 individuals received bonuses of $8 million or more;
  • 53 individuals received bonuses of $5 million or more;
  • 149 individuals received bonuses of $3 million or more;
  • Overall, the top 149 bonus recipients received a combined $858 million;
  • 696 individuals received bonuses of $1 million or more.
    Again, these payments and their curious timing raise serious questions as to whether the Merrill Lynch and Bank of America Boards of Directors were derelict in their duties and violated their fiduciary obligations.

You can read the full letter here. (PDF)

Comments

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  1. pockygt says:

    I hate to be “that guy” but, woah. Fuck those guys.

    • wee0x1B says:

      @pockygt: We seriously need to bring back the pillory. I really want to throw rocks as these people.

    • sohrobotic says:

      @pockygt: But wait. As terrible a thing as this is to do, isn’t the underlying problem that there is nothing illegal about it? I wouldn’t even think it twice to take the money and run if it has already been decided (and not by me) that my company will be bailed out WITHOUT any limitation on my pay.

  2. t-r0y says:

    I don’t see how you can continue to bad mouth these banks and investment firms without some comment about the idiots in Washington who thought it was a good idea to enslave our children so they could give billions to Wall Street.

    • boomersix says:

      @t-r0y: I agree that blame goes both ways here. No oversight up front, and now everyone is screaming. Idiot govt. and greedy corps = mortgage our children s future so the idiots who cant do business can stay in business.

    • Saboth says:

      @t-r0y:

      Newsflash, GW already enslaved them with the biggest deficit of all time and a quagmire war that will cost us 3 trillion.

      I just love how Congress cuts out things in the stimulus package that will actually improve the lives of Americans. “Education? Museums? Healthcare? BROADBAND INTERNET??? Do you think this is Japan? We only subsidize big businesses and wars in this country, not the American people! Hrmph!”

      • dcarrington01 says:

        @Saboth: Come on now! I don’t knwo about you, but the Frisbee park in the new stimulus package will make everything better! Just think if the Frisbee park made it, what kinda pork was cut out of it? Like President O said “there is no pork in this stimulus plan” He’s right, there’s no pork, beef or chicken in it anywhere, is straight paper!

        • Tightlines says:

          @dcarrington01: Well, people hired to build the Frisbee park might think it’s a good idea, as I’m sure the people using the Frisbee park would. So, by your definition of “pork,” it is now impossible to build anything, anywhere because…well, just because you decide to call it pork? Such righteousness.

          • t-r0y says:

            @Tightlines: You just don’t get it. If the government decided to put people to work to raze a perfectly good building and then rebuild it, you’d probably think that was a good thing. Well, it employees people, right?

          • dcarrington01 says:

            @Tightlines: I don’t think my future kids or their kids should have to foot the bill for a hippy Frisbee park, when there are much more important things that the $’s should be spent on!!!

      • portishead69 says:

        @Saboth: Agreed!

      • t-r0y says:

        @Saboth: Just because GW/Repubs (and Dems too) did a lot to screw things up (war, TARP), that doesn’t mean it’s okay to continue putting our country deeper into debt. I’m all for getting out of Iraq and canceling the rest of TARP!

        The government shouldn’t be subsidizing anything or anyone. They should be the referees in the game, not the players — and certainly not BOTH!

      • XianZhuXuande says:

        @Saboth: Spare us. Obama’s been in office how long? He’s pushing for his first trillion and he’ll soon have another bank bailout for another trillion coming right around the bend, the first of which he drafted and the second of which he has already announced his support of.

        The problem here isn’t Republicans or Democrats, it is politicians and businessmen.

    • snowburnt says:

      @t-r0y: I wonder if GW or Cheney walked away with any of that

    • Trai_Dep says:

      @t-r0y: Thanks, Paulson. Thanks, Bush!

      • t-r0y says:

        @Trai_Dep: Assuming you we’re in sarcasm mode, I’m with you Trai_Dep. Paulson (a thief) and Bush (a fool), started this whole bailout mess.

        But lets not forget all the Representatives (Democrats and Republicans alike) that went along with the god-awful TARP plan. And now the greatest presidentially appointed tax cheat in history will be expanding it — ‘cuz he’s so smart.

  3. axiomatic says:

    WTF!!!

    If this is true, this is really bad.

    _______________________________

    Dear upper management,
    We “worker bees” are running out of patience.

    -Ax

  4. logicalnoise says:

    but….but….but…..The free market….it will oversee itself!? right?

    • Saboth says:

      @logicalnoise:

      All the way to the bank…or maybe the swiss bank account since the American banks are shot.

    • SacraBos says:

      @logicalnoise: Yes, a free market would oversee itself – resulting in the failing of the bank. However, the Government hates a free market, so will now do everything it can to prevent it.

      Strange, the bank appears to be doing everything it can to fail, and the government is doing everything it can to keep it from doing so. This is not a “win-win” situation.

    • Eyebrows McGee (now with double the baby!) says:

      @logicalnoise: Invisible hand for the win … right? right? Where’s our win, invisible hand?

    • Segador says:

      @logicalnoise: Yes, it would have. These banks would have failed and their assets would have been liquidated to pay their debtors. In many cases, this extends to exeutive bonuses and pays. It certainly would have included the $84k carpet. Although, judging from other countries big nationalizations of private industry always improves the economy and people’s lives. Russia and China are great examples. All the peeps there are livin’ the high life.

      • bwcbwc says:

        @Segador: Two words for anyone who thinks that the invisible hand of the free market is the most efficient mechanism for regulating the economy: Bubble, Crash.

        The free market only works when it is transparent and the participants are rational. In the real world, all market participants try to hoard information for their own gain (hence things like insider trading law), and as far as rational goes: what rational lender would create something like a NINA loan?

        The ideal free market is just as much an oversimplification of the economy as communism is.

        There is a role for government regulation, and that role would be to soften both the bubbles (by raising taxes) and the crashes (by stimulation packages and lowering taxes). Unfortunately, governments have little motivation to go around bursting bubbles, since it would dampen the apparent prosperity. So we end up only getting the bailouts and not the payback.

        Yes it would be cleansing for the system if the bad banks went under. But why do you want to punish the rest of us for bad banking? Since they repealed Glass-Steagal, these banks truly are “too big to fail”. Is there something you enjoy about the risk of 30% unemployment and food riots in the cities because no one can pay to have goods transported? And even if it doesn’t reach the point of food riots, you can bet that the hit to the GDP would be greater than the amount of money that the feds are putting in. You’re like a doctor recommending an amputation when simple disinfection will suffice.

    • Gokuhouse says:

      @logicalnoise: LOL, not funny! The “free” market we’ve been living under for the last 90+ years isn’t a free market really. The banks have had complete control over the economy since 1913 and anyone who doesn’t believe it is blind.

    • Kllian says:

      @logicalnoise:

      THE UNITED STATES IS NOT A FREE MARKET. I wish people would stop saying this. The United States is a heavily REGULATED market. A free market wouldn’t have things like the FTC or FDA.

      • t-r0y says:

        @Kllian: Exactly! The worst of it is the existence of the Federal Reserve! That is the biggest enemy of the free market, and anyone who thinks that the U.S. is a free market, laissez faire capitalist society, doesn’t understand the impact of the Federal Reserve.

  5. Chairman-Meow says:

    I would like to thank Merrill Lynch for helping to wreck the US economy. I’m glad that you choose to use my tax money in order to feed the personal greed of your top executives.

    As I go to work every morning and wonder if I have a job by the end of the day, I’ll be thinking of you sitting in your mansions and counting the money that you earned off our backs.

    Enjoy!

    • drdom says:

      @Front_Towards_Enemy: Don’t forget the Congress, who gave them our money without doing their due dilligence.

      There is no such thing as a company, bank or whatever that’s too big to fail.

      Most of this could have been avoided if Congress didn’t give them the money. Merrill Lynch can’t spend money they didn’t have, unless they got more money somewhere else. Unfortunately, somebody decided my grandchildren will pick up the tab.
      How many people will remember this the next time elections come around?

    • Mike Min says:

      @Front_Towards_Enemy:

      Blame Bush and and “Lynch” Merill Lynch!

    • Anonymous says:

      @Front_Towards_Enemy: “and counting the money that you earned …” considering it was certainly not earned, should read “and counting the money you ROBBED…”
      The culture of greed is rewarded when it should be condemned!

  6. PHRoG says:

    I am Jack’s utter lack of surprise.

    This is EXACTLY why we shouldn’t have bailed them out at all. They are all lying, stealing, conniving, .

    I just can’t fathom how people can be so greedy!

    • Rarie says:

      @PHRoG: Nice Fight Club reference.

      Also, I agree. Why do these people deserve all this money while all the lower paid people are losing their jobs.

  7. nataku8_e30 says:

    Hrmm, it sounds to me like a lot of these people were probably already millionaires. I was expecting to see information on how many people received bonuses that moved their net worth from below 1 mil to above.

    • snowburnt says:

      @nataku83: I’m guessing none of them weren’t millionaires before. You can’t join their club if you’re not already there.

      In some ways though I think that a lot of those people may have been previously millionaires from actual hard work, intelligence, and most importantly excellent timing and luck. I think all of that has run it’s course for them though

  8. opsomath says:

    As part of the conditions for taxpayer support of these banking institutions, can we arrange to have these guys hunted with hounds? We could auction off the privilege to help offset costs.

    • bohemian says:

      @opsomath: I suggested this last week to a friend. Round them all up at one end of Central Park. Give them a head start and then let the hounds and horses loose. Alternately a public stoning would work. Free rocks to anyone who had their house foreclosed by these banks or lost their job due to their actions.

  9. thebluepill says:

    viva la revolution!

  10. BuddyHinton says:

    You guys don’t get it. All 700 of those employees have bills to pay just like you. The mortgage on their 7 homes, the private jet payments, private school tuition, and country club memberships. By not paying them, the economy of Manhattan would collapse! ;P

  11. UnicornMaster says:

    Talk about Billionaire Boys Club. Rub elbows with the right people and who needs to actually work for a living? Here’s a trust fund and a Bonus!

  12. Segador says:

    To play the Devil’s Advocate:
    I love seeing jackasses like Jack Cafferty bitch and read emails about how these guys are whining about the new federal $500k limits. When’s the last time you made $500K, Jack? How would you feel if your pay was suddenly cut by 90%? How would you pay for those professional bald-head-waxing sessions?

    • snowburnt says:

      @Segador: I understand what you are saying, at least about Jack Cafferty and having pay cut by 90%.

      Personally though, I couldn’t fathom trying to spend $5 million let alone $5 million a year. I guarantee they can survive trying to get their company profitable. If they need to sell off some assets then so be it. $500k is also more money than I could imagine trying to live off of also.

      Were I a CEO, I’d suggest most of my compensation be from a profit standpoint or stock options rather than a salary. That way if I’m not making money, I’m doing something wrong.

    • Blueskylaw says:

      @Segador:

      Nobody in this world would ever starve making $500,000 a year.
      That said, they don’t need to have 7 mansions, Bentleys or private jets. Even if they went from making $100,000,000 a year to $500,000 they would still be better off than 99.99999 (number off the top of my head) percent of the world.

      • Segador says:

        @Blueskylaw: I agree completely- anyone* can live like a king on $500,000. My problem is that this bailout necessitated that the federal government step in and tell a private company what to pay their employees. At that point, it’s no longer a private company- it’s a national company. The government taking control of these companies was a HORRIBLE idea, and when you stop to think about the implications behind their limiting of executive pay, it should make you shiver.

        *very successful businesspeople make a lot of money. A LOT of money. That’s because they are successful, and usually have a track record of delivering results. If, as a successful rich person, you become used to making $9 million a year, your lifestyle and bills rise to meet that. The situation is similar (but not the same) as if you or I were used to making $40k a year. We would buy a house, a car, and make other large purchases based on this income. If that income was suddenly decreased by 75%, we would definitely feel the effects. We have bills and other obligations that were based on that $40k. Fabulously wealthy people have those same bills and obligations, only much larger.

        • Chuck Barris says ROLL TIDE! says:

          @Segador: Successful? Maybe at scamming the American public.

          How can you say these executives are successful and deserving of bonuses, when the company itself is collapsing? If they do such great work, the company should be boasting a profit, not posting a loss, and SURELY not asking for a government handout.

          When a company asks for a bailout, the entity providing the bailout should have a say in how that money is spent. If I ask my Mom for cash to pay a bill, she’s gonna demand that I use it to pay that bill, not blow it on weed or something. And she’d have every right to do so.

          • Segador says:

            @Chuck Barris says ROLL TIDE!: When a company asks for a bailout, the entity providing the bailout should have a say in how that money is spent. YES THEY SHOULD. Which is why the Government should’t bail companies out. I don’t want them EVER telling a private company what to pay people. If the company fails because of inflated exeutive pay and idiotic decisions, so be it.

        • Oranges w/ Cheese says:

          @Segador: Fabulously wealthy people have those same bills and obligations, only much larger.

          Your point being? They have bills and obligations that fit their income sure, but they’re highly inflated and frivolous. You don’t NEED to buy a Bentley when you could buy a Toyota.

          I’d wager a guess that its 100% easier for someone making millions a year to experience a 90% pay cut then it is for someone making $40k. At least at 90% of a million, you aren’t in fucking poverty.

          • Segador says:

            @Oranges w/ Cheese: Which is why we live in America, not China. In America, if you make enough to afford a Bently, you can choose to buy that car as opposed to the Toyota. You definitely don’t need the Bently, but you don’t need cable or air conditioning, either.

        • t-r0y says:

          @Segador: Well said.

        • zark169 says:

          @Segador: Of course their bills will eventually reflect their income. It’s natural for someone to enjoy their income. However, you’re comparing fractions of income when you should be comparing overall survivability of the person. The difference is that the 40K individual isn’t going down to a wage an average US citizen can survive on. The executive is going from upper-upper class to low-upper class whereas the 40K individual is going from middle class to the streets.

          • zark169 says:

            @zark169: In short, the rich SOB can give up a ton of crap he liked and wanted but didn’t actually need (he might think he needs it but he doesn’t), whereas the average guy is giving up needs like a place to live, transportation, and food.

            • econobiker says:

              @zark169: Yeah, that is the main problem that some of Madoff’s chi-chi, la-de-da victims are dealing with. Years of 10%-12% returns (they thought) on their huge nest eggs- so, for example, a nest egg of $1,000,000 with $100,000+ returns got people accustomed to living in certain ways. So those folks have to trottle back to living on $25,000 a year (from other sources) but probably live in areas where the home taxes alone are $10,000 to $20,000 per year…

              Hence the whining formerly-“rich” older people we have heard from in the media…

  13. Dennis Wilkins says:

    I try not to read articles like this, because it pisses me off, to no end. The worst part about it, is that we will never ever get that money back.

  14. bohemian says:

    Organized theft, nothing else. Disgusting.

    • snowburnt says:

      @bohemian: We have the FBI trying to hunt down “organized crime syndicates”. If I stole a car I’d be paying more in restitution than these people who stole millions. Madoff will probably get off easier than some guy caught smoking marijuana

  15. ForrestWhitakersLazyEye says:

    So when’s that uprising of the lower class gonna happen? I need to loot me some of these bastards commodes.

  16. idip says:

    o.O

    I wonder what it would be like to get a ‘bonus’ at the end of the year for $1 million dollars.

    I wonder what it was like for them… How many of them said, “Whoa?! That’s awesome”……..

    ….

    Or rather, how many said…, “That’s it?!”

    It’s just werid… our buisness is failing, let’s give out tons of bonuses to add to our losses so we get more money! Whoohoo!

    • Oranges w/ Cheese says:

      @idip: I don’t think I can even comprehend what a million dollars looks like. I mean, at my current salary, one million dollars = 30 years of my life if I didn’t spend a penny of it – which obviously means its more than 10x that period with a reasonable savings rate. Just.. can’t… comprehend.

      • zark169 says:

        @Oranges w/ Cheese: Nevermind that it’s probably only like 10% or 20% of their annual salary. I would be in heaven if I got a year end bonus for that % of my salary, especially considering how hard I worked my ass off at my last job.

    • econobiker says:

      @idip: Some of those rich idiots might have expenses like $20,000 per month rents in NYC. A friend of my parents was(is?) a rental agent for the high end of the rental market in NYC and she quoted that price even about 10 years ago…

  17. Plates says:

    New York Attorney General Andrew Cuomo is starting his campaign to become New York Governor Andrew Cuomo. Hopefully the voters of the Empire State will remember the last time the state’s Attorney General became governor.

    • gparlett says:

      @Plates: If more politicians ‘campaigned’ by kicking the ass of evil-doers the world would be a better place. I have a huge man crush on Cuomo… then again I really like Spitzer too and wish he was still governor.

    • Trai_Dep says:

      @Plates: Yup. Gosh DARN those fancy-pants Attorneys General who go after thieving Wall Street billionaires for their crimes, trying to claw back their ill-gotten gains. Public servants serving the public – how DARE they.
      Look – a minor sex scandal involving consenting adults! Follow the shiny ball. Follow the shiny ball!

      Sigh. Son, you’ve got to straighten your priorities…

  18. Anonymous says:

    it’s obvious that this is just a game theory scenario that allows the few to maintain control over the many.

    Unfortunately, the greed is overwhelming and must be put into perspective. Like so many other fields, an example should be made of them so that others in positions of power to not resort to abuse.

    It’s is utterly disheartening to hear that people are to gain from such a global, not just national, situation. It promotes dissent, and completely abolishes trust. What COULD have been a good precedence for a free market model has been violated to satiate the need for some to feel significant.

    These are no longer exceptions in this situations, we have seen overwhelming evidence that check and balances must be enforced and that the overseers are subject to checks and balances as well.

    It is not a new situation, and we have not proven the wiser, even though we have had the advantage of learning from our history.

    How long can we keep a blind eye to this gouging?

  19. The Cynical Librarian says:

    What’s the minimum sentence for something like this?

    Also; can we sneak something into the stimulus bill that someone who does something like this should always be sent to “Federal, pound-me-in-the-ass prison”?

  20. failurate says:

    It’s going to be difficult to recover from all of the huge, widespread, economy destroying fraud. Especially since our elected officials are co-conspirators.

  21. vildechaia says:

    Somebody’s ass or asses, as the case may be, needs to sit in a jail cell for a very, very, very long time. Assuming this is all true, of course. Where in the hell was the “oversight?” Was everyone asleep at the wheel?

  22. faintandfuzzies says:

    When is someone going to do something about these jerks??? …and I’m being nice!

  23. IphtashuFitz says:

    I wonder if it would be worth attempting to get people all across the country to send these banks a message. What would happen if, on the same day, tens or hundreds of thousands of people all went and closed their accounts with BoA or Merrill Lynch? I’d be more than happy to close my BoA accounts and move them to local/regional banks, not only as a form of protest but as a way to show my support for my local economy. As one person this wouldn’t do much but imagine if a significant percentage of their customers did this, and all on the same day.

  24. vastrightwing says:

    I see a lot of looting going on here. Didn’t Russia do the same thing before they collapsed? The people who knew collapse was imminent simply looted the government for all they could. Or maybe there’s nothing to see here.

  25. Corporate_guy says:

    Hopefully this will be considered some kind of theft. They basically cleared company bank accounts before the companies debt ate up the money.

  26. jtheletter says:

    I’m past jailtime. These abuses are flagrant. Time to take a page from the French Revolution playbook. [ka-shunk!]

  27. stephenwdaries says:

    This is just fucking disgusting. If our government doesn’t take action soon I foresee an American Coup d’etat.

    In fact, I will welcome it. At this point, any change is better than no change. (Um… Hello.. Mr. President? Change? Soon? Now? The “YES WE CAN” bullshit, where is it?)Any actions taken, is better than no actions taken. Any.

    It’s sad to know that while these CEO’s and the people they rub elbows with are becoming millionaires off free taxpayer money and not having to worry about anything financially… I sit here, a veteran, jobless….

    Maybe that bail-out money along with the liquidation of bank assets and the remaining money there-in should of been used to help the people who have lost their homes do to foreclosure by no choice of their own…

    • Fresh-Fest-1986 says:

      @stephenwdaries: Dude has been in office 3 weeks and he has already got the ball rolling in shutting down Guantanamo and is trying to pass a huge stimulus bill.

      What the hell more do you want from him?

      • stephenwdaries says:

        @Fresh-Fest-1986:
        Nothing. Just for him to have somebody put their foot down and have somebody that has been manipulating the banks with in it respective ranks pay for their heinous actions.
        Didn’t mean to offend anyone. I just think some stronger political power needs to be used to put someone behind bars.

  28. AmbroseP says:

    Pitchforks and torches, anyone? Unfortunately, radical times call for radical measures…

  29. tailstoo says:

    I know that one person doesn’t make much of a difference to these banks, but I’m closing all of my accounts with BofA.

    I wonder how often this kind of stuff happens in other big companies.

    When the average household income is around 50k a year, how can any executive in any company believe that they deserve to take home tens of millions a year?

    Maybe it is time to let the whole system collapse and start again from scratch. My children don’t stand a chance in this system of today. It’s like modern day serfdom.

  30. ZukeZuke says:

    These idiots in Congress still don’t get it? The financial “giants” like Merrill and AIG milked every damn red cent out of the bleeding patient, especially after they knew they sold Bush + Obama + the Democrats on the fact that a bailout was critical to preventing a complete collapse of America.

    I swear, the whole lot of them are criminals and needed a good ass kicking. Man, this pisses me off…

  31. Plankton420 says:

    This will all be sorted out once the coming Class Warfare starts…

    EAT THE RICH!!!

  32. pjstevens77 says:

    I think they need a ride on the new Chinese Death Bus that was highlighted this morning on Jalopnik…

    [jalopnik.com]

  33. tundey says:

    This just makes me laugh. I laugh because if I don’t, I’ll just get needless pissed and that’s no good for my health.

    I also laugh because we in America spend so much time advising people to beware of foreign scammers. We spend time worrying about grocery shrink ray and target’s fake save-by-buying-2 deals. We worry about credit card interest rates. We worry about comcast throttling our bit torrent.

    Meanwhile we are willingly handing out billions to these bastards. How can anyone justify a bonus (not salary but bonus) of $1 million to anyone that contributed to a company’s bankruptcy? What could they have done to deserve that much money?

  34. Oranges w/ Cheese says:

    I’m happy to say my only account with BoA (car loan) is over and done with this month!

  35. Nearsite00 says:

    Seriously, I want them to feel the hurt that the rest of the country is feeling, and I want to be the one administering the pain. This is just super fu*king ridiculous.

  36. bloatboy says:

    My irony meter just exploded looking at this.

    Andrew Cuomo is one of the biggest players in the current economic collapse. Or to put it more plainly, had he not crammed these bad loans down the throat of as many lending instutions, we would not have had a subprime meltdown or housing bubble. Without the subprime crisis, there is no credit crunch. Without the credit crunch and the collapse of the housing bubble, there is no economic downturn.
    [www.liveleak.com]

    For those of you attempting to blame the free market, you have it exactly backwards. The market collapsed because Cuomo (and the rest of the Clinton administration) regulated it to death, forcing it to act in ways in direct opposition to the ummutable laws of economics.

    • orlo says:

      @bloatboy: When did Clinton pass a law requiring that Countrywide give out 110% mortgages? And there is no such thing as a “law” of economics.

    • Eliamias says:

      @bloatboy: Except that you plainly – and correctly – state that there was a housing bubble. Bubbles burst; that is their nature. Maybe there are governing factors that made this happen sooner rather than later, but with the over-inflation of housing values, this was pretty much a foregone conclusion.

  37. chargernj says:

    Can someone tell me where in the Constitution that capitalism is enshrined as our econimic system?

  38. kwsventures says:

    If you get a $1M bonus, after taxes, you might keep $600K. Putting that $600K into a safe 10-year treasury will pay you a measly 2.90% on your bonus today. Meaning you will make $17,400 per year on that bonus. Not exactly retire and live a comfortable life money. I assume that this bonus was a part of the employment contract with Merrill Lynch, signed prior to the taxpayer funded corporate welfare TARP money was given to financial institutions. Congress make me laugh. Now, they are mad about this bonus money. Should of thought about how the money was to be used prior to saying the world was going to end if this money was given out.

  39. grapedog says:

    i blame congress and I blame the american voters…we are to blame, not the companies that abused our handouts.

    what did people think was going to happen? all these paragons of morality were going to take our free tax money and use it to correct the course?

  40. AlmetaSaffron says:

    As an honest Wall Street professional (yes, there are a few of us), this disgusts me. Our industry has never been about enriching clients, only stockbrokers. That’s always been our dirty little secret but this…just goes beyond the lowest excess I have ever seen.

    I suppose the only thing we can look forward to is much like Rudy in the 80s and Spitzer in 2002, you WILL see some Cuomo perp walks.

  41. u1itn0w2day says:

    I’m tired of hearing ‘they earned it ,they are entitled to it ‘-bullcrap .Being employed is your bonus .Would there be paid bonuses without TARP or government aide-I think not,your bonus would be that you were lucky enough to get a severance and some benefits .

  42. mac-phisto says:

    @t-r0y: i’m not going to sit here in defense of washington, but we’re not “enslaving our children”. in the short-term, the debt will be monetized (& we’ll see a period of inflation). over long-term, GDP growth will reduce the overall impact of the debt. that’s assuming we see significant GDP growth. if we don’t…well, i don’t think we have to worry about our children picking up the tab too much. bankrupt nations don’t usually sit around too long before they’re gobbled up by societal changes that restore the balance.

    • t-r0y says:

      @mac-phisto: “Societal changes that restore the balance” — Do you mean a collapse like the Soviet Union or just hyper-inflation like Argentina? Either way, our children are getting shafted!

  43. Feminist Whore says:

    @t-r0y: If you don’t see how, maybe you’re not looking hard enough.

  44. wickedpixel says:

    oh how i long to be even the 946th best employee at Merrill Lynch last year….

  45. ceez says:

    lynch em all!

    in time square in prime time tv! watch those ratings soar!!!

    I hate you wall street!

  46. parad0x360 says:

    This crap just makes me angry.

  47. Skater009 says:

    They hang all those guys. there all crooks.I SAY NO TO THERE BAILOUT BONUES

  48. Consumernista says:

    As an ardent responsible capitalist, I find it extraordinary that these defenders of capitalism have no problem with Socialism — that is socialism for the very wealthy not for the average worker. It is a reverse Karl Marx.

  49. TrueBlue63 says:

    Growing up politically (well after childhood) all I ever heard from Republicans was that we should vote for them because they would control spending and allow the market place to set manage the economy. Laissez faire ring a bell?

    Reagan’s 8 years were OK, spending wasn’t catastrophic but we unraveled tons of important regulations for no apparent reason.

    But the last 8 years under Bush II have been cataclysmic. I don’t care about the politics so much, but the fiscal conservatism that the Republicans espoused was replaced by the most spend thrift and fiscally reckless administration of my lifetime. And the TARP legislation seems to be the final FU to the American people. Doing all that could be done to make certain that the wealthiest among us suffer as little as possible, from the economic meltdown they ushered in. What makes it so egregious, is that these people have created this mess, because being rich wasn’t good enough. They needed to be so insanely rich as to defy comprehension.

    I hope the people that kept that disaster rolling, because they were angry about Clinton’s sex life are all happy now. It was just so important to worry about a BJ, and other sex issues.

  50. crashfrog says:

    @t-r0y: Well, yes. Paying one set of people to dig holes and then paying another to fill them is technically stimulus, because it stimulates demand for both hole-diggers and hole-fillers. Indeed, you could pay them the same amount of money to do nothing, and that would still be stimulus.

    But even better – why not pay for things that people want? Why not pay for some infrastructure, while you’re at it? Then you get the benefits of stimulus plus you’ve got all this infrastructure when you’re done.

    You know, infrastructure like the rural broadband lines John McCain supported right up to the point where Obama put it into the stimulus bill. (Hrm.) Or, sure, parks. FDR built a ton of parks, and it not only put people to work, it stimulated the local economy by making those areas more attractive to residents.

    that doesn’t mean it’s okay to continue putting our country deeper into debt.

    Not stimulating the economy is going to put the government in more debt than you can possibly imagine. Think it through. As the economy spirals down the toilet, people lose their jobs, and then they lose income. And if the American people aren’t making any money, the government can’t make any money in taxes.

    And the government can reduce spending, but only to a point – and every reduction in government spending makes the economy even worse, as it reduces demand. There’s a bottom limit to the cost of government, because it has to make certain expenditures to function, but there’s theoretically no limit to how little tax income the government can raise.

    And that means an incredible amount of debt, eventually. So that’s your choice. A debt-free government is off the table (and, let’s be real, it has been since the 1800’s.) But a moderate amount of additional debt now will prevent the need for an astronomical amount of debt in the future. I don’t think there’s anybody who thinks infinite government debt is a great thing. But anyone who thinks about this should support the stimulus, because 400 billion or 1.2 trillion in additional spending now could prevent hundreds of trillions is debt over the next decade.

    • t-r0y says:

      @crashfrog: You don’t get it. When you take dollars out of the private sector to pay someone to dig a whole and another someone to fill it up it will hurt the economy. When you take those dollars away from the private sector, there are fewer dollars to invest in the production of real goods that people will buy! The production of real goods is what will stimulate the economy, and we need to save/invest in order to get there.

      Let say you have $1,000 and two kids, would you pay one of them to dig a whole and fill it up for $1,000 or pay the other one to buy raw material from your neighbor, work to shape it into something new and usable, then sell it for more than was put into it (cost + labor)? The second kid would be able to pay you back AND keep some profit, your other kid will just do nothing. If you choose to give the first kid the $1,000 and give him the MAKE WORK to keep him busy, what message does that send to the second kid??? It says stop trying, dad will just give you money. But you don’t have endless funds, you’re already in debt to your neighbor for $100,000. You need to get both kids, and yourself, busy production something that someone else will buy. Don’t waste your time with make work.

      • mac-phisto says:

        @t-r0y: isn’t that the point of the stimulus package? it’s not like we’re just doling out money to people (like the last one) – we’re earmarking money for specific fields that we hope to stimulate: energy, health, science. the idea is to generate production within the private sector.

        unfortunately, that investment often takes time to reap benefits, so we’re supplementing it with short-term “hand-outs” to stem the tide in the interrim (food stamps, unemployment funds, work education grants).

        i don’t support the whole dig a ditch just to fill it approach, but i don’t think that’s even necessary. we haven’t made a solid investment in infrastructure in at least 3 decades – isn’t it about time? our roads are falling apart, our energy grid is taxed – we need to replace some of the capital in this country.

      • crashfrog says:

        @t-r0y: No, you don’t get it. They’re not taking dollars out of the private sector – in fact the stim package the Senate passed has $400 billion of (useless) tax cuts.

        The government is going to print new dollars to invest in the production of goods, services, and infrastructure. Sure, that’s inflationary – but the negatives of a little inflation over the next year or two is nothing compared to the negatives of a decades-long currency devaluation, which is what we’re looking at as a result of this crisis of demand.

        The production of real goods is what will stimulate the economy, and we need to save/invest in order to get there.

        Invest in what? Nobody’s going to expand their factory or start a new business during a time when the American people are saving money or paying down debts instead of buying things.

        At this point, the stimulus is required because only the government can do something as stupid as invest in a time of declining demand.

        Do you get it, yet? It has nothing to do with “taking dollars out of the private sector”, because that’s not how this stimulus is being paid for. It’s being paid for by new dollars minted by the government.

        But you don’t have endless funds, you’re already in debt to your neighbor for $100,000.

        This is why I can’t take you serious. Who do you think the US Government, who prints American money, could possibly be in debt to? The government doesn’t really rack up “debts” except in the form of government bonds. There’s a carry-over deficit that builds up every year that spending exceeds tax revenue, but the shortfall is made up by printing money.

        It’s not like the US Government gets foreclosed on. The rules are different when you print your own money, and that’s what makes government unique. That’s what makes a government spending stimulus effective when there’s a 2 trillion dollar shortfall of demand in the worst economy since the Depression.

        • t-r0y says:

          @crashfrog:

          The government is going to print new dollars to invest in the production of goods, services, and infrastructure.

          Printing money is a hidden tax. When the Fed prints more money, they devalue the dollar that’s in your pocket. You now need more dollars to buy the same amount of goods.

          Sure, that’s inflationary – but the negatives of a little inflation over the next year or two…

          The next year or two? You think the government will bring back those dollars that they’re printing in a year or two? You think they’ll pay off the loans in a year or two? The CBO says $350 billion in interest over 10 years.

          is nothing compared to the negatives of a decades-long currency devaluation

          But it’s the money printing, the inflation that will devalue the dollar!

          … this crisis of demand.

          Huh? Demand of what?

          Invest in what? Nobody’s going to expand their factory … people are saving money or paying down debts instead of buying things.

          Export! Save to fund/expand production, export to pay off our debt to other nations!

          At this point, the stimulus is required because only the government can do something as stupid as invest in a time of declining demand.

          Bullshit! If the government would stop messing with the rules of the game and remain an impartial referee, rather than becoming a player, then business would create jobs.

          It’s being paid for by new dollars minted by the government.

          But, as I said above, that does take money out of my pocket. Now, it doesn’t literally remove any dollar bills from my pocket, but it devalues it. When the government creates new money, it means more money chasing the same amount of goods, and that will cause prices to rise. So, although I have the same number of dollars in my pocket, they have less spending power. The Fed is no different than a counterfeiter — except it legal!

          Who do you think the US Government, who prints American money, could possibly be in debt to?

          You poor ignorant fool! [www.treas.gov]

          • crashfrog says:

            @t-r0y: When the Fed prints more money, they devalue the dollar that’s in your pocket. You now need more dollars to buy the same amount of goods.

            At the same time, the decline in consumer demand deflates the value of goods. And, ultimately, currency deflation is a ton worse than inflation.

            The CBO says $350 billion in interest over 10 years.

            Does it? People like you have a nasty habit of quoting “CBO reports” that don’t actually exist.

            Huh? Demand of what?

            Demand of everything, stupid! God, open a paper sometime. People are saving money or paying down debt. Which, normally, isn’t bad – saving money in the bank or paying off your credit card both increase the supply of money able to be loans as capital – but at this time, people are saving so much and paying so much debt that demand for goods and services is on the decline. We’re looking at a multi-trillion-dollar demand deficit over the next two years.

            Save to fund/expand production

            No one is going to expand production when they can’t sell the goods they already have. If you have a warehouse full of flatscreen TV’s you can’t sell, it doesn’t make sense to build another flatscreen factory.

            That’s what the decline in demand means – people aren’t buying what is being sold. Nobody with any sense expands production in that environment, and as a result – there’s nothing to invest in.

            business would create jobs.

            Business doesn’t “create jobs”. Businesses hire workers when they need to expand production – but, again, no business is looking to expand production in this environment. Indeed, they’re looking to contract production, to prevent their warehouses from filling with unsold goods, and as a result – businesses are laying people off. Half a million people or more, to be precise, just this past month.

            But, as I said above, that does take money out of my pocket.

            Not having a job, because people weren’t buying what your company is selling, is really going to take the money out of your pocket. That’s what the stimulus is designed to prevent, by increasing the demand for the products you help make or the services you help provide.

            The Fed is no different than a counterfeiter — except it legal!

            And you’re no different from a murderer – except you’ve never killed anyone. Bit of a looming caveat, there.

            • t-r0y says:

              @crashfrog:

              Does it? People like you have a nasty habit of quoting “CBO reports” that don’t actually exist.

              From the CBO [www.cbo.gov]

              …the government’s interest costs would increase by $0.7 billion in fiscal year 2009 and by a total of $347 billion over the 2009-2019 period…

              Business doesn’t “create jobs”. Businesses hire workers when they need to expand production…

              Umm, create jobs, hire workers. I fail to see the difference.

              The rest of your reply tells me that you don’t understand the concept of money and how printing new dollars will inflate the currency. Maybe this will help…

              • crashfrog says:

                @t-r0y: Umm, create jobs, hire workers. I fail to see the difference.

                The difference is one of motivation. Businesses don’t exist to “create jobs”, they exist to make money. As a result they hire more people when doing so would make them money, not when it wouldn’t.

                Hiring new people isn’t going to make them money during a retraction of consumer demand. Why would they hire more people to make cars, for instance, when nobody’s buying cars? It would be stupid.

                We need the stimulus because we need to stimulate demand. Do you understand what I mean when I say that? I don’t have a cute cartoon to explain “supply and demand”, but maybe you could stop surfing YouTube for a second and open a book. If demand is allowed to decline businesses will have no reason to “create jobs”, and every reason to destroy them, instead. Like they’ve been doing for the past six months.

                • t-r0y says:

                  @crashfrog:

                  The difference is one of motivation. Businesses don’t exist to “create jobs”, they exist to make money…

                  So it’s bad to create a job because you want to make money.

                  …maybe you could stop surfing YouTube for a second and open a book.

                  Here’s some suggested reading for you …

                  Applied Economics: Thinking Beyond Stage One [www.amazon.com]
                  Economics in One Lesson [www.amazon.com]
                  The Case Against the Fed [www.amazon.com]
                  The New Deal or Raw Deal? [www.amazon.com]

                  On a personal note .. The fact that you’re willing to come back to continue this conversation says that you’re open to the dialog I hope someday that I or someone else can help you understand economics.

                  • crashfrog says:

                    @t-r0y: So it’s bad to create a job because you want to make money.

                    I didn’t say it was bad, stupid. What I said is that because businesses hire people in order to make money, they only do it when doing so would make them money.

                    In a recession/depression, with consumer demand trending downwards across the board, hiring new people loses them money – they have to pay wages, but they gain no increased profits in return. It’s a net loss to hire 20 new people to increase your production of widgets when you can’t sell the widgets you already have.

                    Christ this really isn’t that complicated.

                    Here’s some suggested reading for you …

                    I have no interest in conservative revisionist history. It’s a matter of historic fact that Hoover’s attempt to balance the budget prolonged the Depression, just like attempting to balance the budget prolonged England’s depressions – prompting Keynes to develop his theory in the first place. FDR’s deficit spending, and then later the massive deficit spending project called “World War II”, ended the Depression by stimulating the economy and creating a massive demand for tanks, airplanes, and guns.

                    Now, a war is the economic equivalent of burying money in mine shafts, since the ultimate fate of most of those tanks and planes was to be destroyed. The political necessity of the war aside, it was essentially economic waste. But it only goes to show that even wasteful spending can be stimulus. Imagine how the economy could have been improved if, instead of tanks and bombers built and then essentially dropped to the bottom of the ocean (or the equivalent), we had spent the cost of World War II on infrastructure, instead.

                    Well, we’re in the exact same position now. Deficits don’t matter – at least, not right now. The costs we’ll pass on to our children – or ourselves, ten years from now – are astronomically lower than the costs of passing them an economy caught up in a decades-long deflationary spiral.

                    Now explain to me what you still don’t get about that. Don’t come back to me with bullshit like “it’s bad to create a job” because that’s not what I said at all.

  51. savdavid says:

    Well, as long as we all sit on our asses and not do anything about this but bitch we deserve exactly what we are getting. Enjoy!

  52. TheThirstMutilator says:

    Destroy the fed…

  53. tworld says:

    ENOUGH ALREADY!!!! SEND THESE GUYS TO JAIL. CASE CLOSED.

  54. Chris Bellido says:

    I am surprised that the sales of Pitch forks torches and other farm implements are not on the rise. Imagine the surprise of all these CEO vultures, when the peasants show up at their palatial estates screaming for their pound of flesh.

  55. chrisburp says:

    It’s hilarious that the letter from Cuomo was addressed to Barney Frank who is one of the idiots at least partially responsible for this mess. He and others protected Fannie Mae/Freddie Mac from any oversight.

    Where’s the outrage against these guys like Frank and Dodd? Why are they getting a free pass?

  56. Anonymous says:

    Bonuses only get paid when one dose a good job seems to me like all these big bonuses are like bribes for a job well done. Call me a

    Conspirasist but I’m smelling a rat here and I cant believe all these people can make all the same mistake unless its all a well planned!