Bulls, Bears & Bucks #49: 50.000 banen weg bij Citigroup

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Goldman Chiefs Give Up Bonuses
Seven Top Executives to Forgo Millions in 2008; Move Could Pressure Other Firms

In a closely watched move that may be followed across Wall Street, the top executives at Goldman Sachs Group Inc. have decided to forgo their 2008 bonuses. In doing so, they are giving up potentially tens of millions of dollars in payouts in a year that reshaped the securities industry.

After months of internal debate at Goldman, the seven top executives at the firm, including Chief Executive Officer Lloyd Blankfein, asked the board's compensation committee to grant them no bonuses. The board approved the request on Sunday.

The executives will only be eligible for their base salaries, $600,000 for each. A firm spokesman said the executives felt it was "the right thing" to do.

"While the firm has distinguished itself through many aspects of the crisis, we cannot ignore the fact that we are part of an industry that is directly associated with the ongoing economic distress," the firm spokesman said late Sunday.

It isn't clear yet whether other firms will follow suit. Spokeswomen at Morgan Stanley and Merrill Lynch & Co. said no compensation decisions have been made yet. Morgan Stanley CEO John Mack took no bonus in 2007 after the firm suffered a fourth-quarter loss.

Just a year ago firms across Wall Street were still more or less untouched by the mortgage meltdown and were ringing up record profits. Mr. Blankfein took home $68.5 million in cash and stock in 2007, a record payday for the head of a publicly-traded securities firm.

But over the past year, mortgage related losses have slammed the firms, starting in March with the shotgun marriage of Bear Stearns Cos. to J.P. Morgan Chase & Co. Then, in September, Lehman Brothers Holdings Inc. filed for bankruptcy protection and Merrill Lynch agreed to be bought by Bank of America Corp.

Goldman has fared better than other firms, but its stock is down more than 60% this year. Analysts are predicting it is on course to post its first quarterly loss as a public company in December when it reports its fourth-quarter earnings.

The debate over bonuses and how much should be paid out has been raging for months across Wall Street. Some investment bankers have argued that even if it was an ugly year, only a handful of people are responsible for the losses and not everyone should be punished for that.

The decision at Goldman doesn't mean everyone at the firm will go home empty-handed. The firm still has to reward its roughly 30,000 employees. Distinctions are being made between the highest-ranking executives and lower-level traders and investment bankers, according to people familiar with the matter. Many of these employees performed well in 2008 despite the market turmoil, these people say, but could get plucked away by rival firms if compensation practices are significantly altered.

The move on the part of Goldman's top executives is expected to set the tone for the rest of Wall Street, where bonuses are typically many times bigger than base salaries. At many financial firms, about half of all revenue is allocated to compensation, and multimillion-dollar bonuses are routinely paid out to ensure the best talent stays put. Top traders and bankers on Wall Street typically make a base salary of about $250,000, with the rest coming as a bonus. Employees tend to get their bonus numbers in the first two weeks of December -- with the cash coming early in the New Year.

Goldman's decision may make it hard for other firms to pay their top people anything above their base salary, especially since compensation at the highest level is publicly disclosed. Some executives at other firms have joked about an ongoing "Lloyd watch," referring to Goldman CEO Mr. Blankfein: "If Lloyd doesn't take home a bonus no one will," said one senior executive at another firm.

Since the start of 2002, Goldman, Morgan Stanley, Merrill, Lehman and Bear have paid a total of $312 billion in compensation and benefits to its employees. But this compensation model has come under pressure since the Treasury Department recently announced plans to inject capital into financial institutions. Goldman is among the initial nine companies getting a combined $125 billion in government capital. That's fueled worries that taxpayer funds will be used to essentially subsidize Wall Street bonuses.

Regulators including New York Attorney General Andrew Cuomo have asked firms for information about compensation plans. Mr. Cuomo said Sunday that Goldman Sachs "has taken an important step in the right direction," adding, "we strongly encourage other banks to follow Goldman Sach's step."

The compensation change affects Mr. Blankfein and his two co-presidents, Gary Cohn and Jon Winkelried. Each made a total of $67.5 million in 2007. Vice chairmen J. Michael Evans, Michael Sherwood and John Weinberg as well as Chief Financial Officer David Viniar will also take home just their base salary for 2008. Through a company spokesman, all seven declined to comment.

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Op maandag 17 november 2008 14:57 schreef ItaloDancer het volgende:
Dit vind ik ook wat overdreven. 600.000 dollar per jaar daar kun je nauwelijks van rondkomen.

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Op maandag 17 november 2008 15:15 schreef At-EZ het volgende:

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Ze hebben nog altijd hun opties en aandelen.

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Op maandag 17 november 2008 16:41 schreef shilizous_88 het volgende:
Wat maken jullie trouwens van het aparte handelsvolume van de Societe Generale?
Is een dergelijk groot handelsvolume aan het eind van een dag te verklaren?


http://finance.google.com/finance?q=EPA%3AGLE

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Op maandag 17 november 2008 18:56 schreef pberends het volgende:

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Zou die Buffet nooit transactiekosten hebben moeten betalen als ie met 100 dollar begon?

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Op maandag 17 november 2008 16:41 schreef shilizous_88 het volgende:
Wat maken jullie trouwens van het aparte handelsvolume van de Societe Generale?
Is een dergelijk groot handelsvolume aan het eind van een dag te verklaren?


http://finance.google.com/finance?q=EPA%3AGLE

[ afbeelding ]

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Op maandag 17 november 2008 14:09 schreef Lifesaver48 het volgende:

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Zijn punt heeft natuurlijk vrij weinig te maken met 'de crisis'. Maar weldegelijk met hoe Nederland in elkaar steekt.

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Op maandag 17 november 2008 21:13 schreef superworm het volgende:
Zo is het. Een Nederlander is trots op zijn land: ja, de EU en VN zijn prima, de handelsverdragen en vriendschapsbanden met andere landen uitzonderlijk handig, maar Eigen Land Eerst, of zo je wil, volk, d.w.z. elke levende ziel ín Nederland of daarbuiten, die een Nederlands paspoort heeft. We zijn in staat grote delen van de Noordzee droog te baggeren. 80 procent van onze grond kan gebruikt worden voor de landbouw. We kunnen onszelf prima verzorgen, mocht het er toe komen, maar Nederland blijft Nederland, no matter what. Zo zitten Nederlanders van oudsher in elkaar, en in tijden van crisis komt het bovendrijven.

Diep onder de moderne multimediale wereldburger die de Nederlander van de media en politiek al decennia geacht is te zijn, zit nog steeds die rauwe ideologie van pure vaderlandsliefde - de wil te vechten, vaak te sterven, voor het Vaderland. Zo is het in de geschiedenis altijd geweest, en daar staan (of, vanaf de sixties, stonden) we om bekend.

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Op maandag 17 november 2008 18:58 schreef Drugshond het volgende:

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Bij het horen bij zijn naam, gaat de kluis koelkast open, en komt het zilver op tafel.

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Op dinsdag 18 november 2008 11:59 schreef rvlaak_werk het volgende:
Uhm... bij Citigroup gaan er geen 50K banen uit, maar 75K. Die 50K komen bovenop de 25K die al eerder waren aangekondigd.

53,000 additional Citi layoffs

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Moody’s Ominous Alt-A Warning - Mortgage Implosion Round 2

Posted on November 18th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

Moody’s recently put out a very chilling report that brings home just how early it is in the overall mortgage and housing implosion.

Many of us have written volumes on the impending Alt-A Implosion. But, I still don’t think people understand that the Alt-A universe, larger is size than SubPrime, is presently imploding in front of our very eyes. Unlike Subprime loans that were more localized to specific regions of the bubble states or lower priced areas, Alt-A loans cut across all socio-economic boundaries and can be found littering some of the most affluent areas in the nation.

For those of you who think that higher priced regions are ‘isolated’ from price declines just because they have not been beaten as badly as Subprime epicenters yet, this should be a wake up call.

The ‘Alt-A Implosion’ could dwarf the Subprime Implosion when all is said and done. This is because values in higher-priced, heavy Alt-A areas should actually end up being hit harder, as Alt-A loan allowed much more leveraged and much less documentation than Subprime relying mostly on a credit score and an appraisal for loan approval. Within the Alt-A universe is where all of your stated income, no ratio, no doc, 100% piggy-backs can be found. The most notorious Alt-A loan is the Pay Option ARM.

The way all of these loans were structured is producing a very linear mortgage crisis - from Subprime to Alt-A to Jumbo-Prime then Prime. Jumbo Prime is arguably a little less risky than Alt-A but includes much of the same types of loans such as the 5/1 interest Only. Much of this was also stated income, allowed high combined loan-to-values and carried low introductory teaser rates. With values down as much as they are in the Jumbo regions, I would suspect that Jumbo Prime will end up acting much more like Alt-A in the future.

The coming Alt-A and Jumbo Prime Implosions puts at risk well over $1 trillion in residential mortgage loans, much of it sitting on the balance sheets of some of the nations largest banks such as Wells Fargo, Chase, Bank of America and Citi. It will also take out of commission the higher income demographic for a long period of time.

At the very bottom of this post are many links dating back months on just how devastating the Alt-A Implosion will be. This is likely why banks and regulators are so gung-ho on mortgage modifications as of late. None have the balance sheet to manage high double-digit default rates on what they still consider to be ‘high grade’ loans.

Below are highlights from a recent release from Mortgage Daily. -Best Mr Mortgage

Alt-A Performance Sinks
Serious delinquency spikes on 2006, 2007 vintages
November 17, 2008
By MortgageDaily.com staff

Rapidly deteriorating performance on Alternative-A loans is prompting one ratings agency to warn that widespread downgrades are possible on Alt-A residential mortgage-backed securities.

As of October, delinquency of at least 90 days on Alt-A loans backing securitizations averaged 20.3 percent on the 2006 vintage, rising from 16.9 percent six months earlier, Moody’s Investors Service reported today. For the 2007 Alt-A vintage, delinquency averaged 17.5 percent last month, rising from 12.2 percent.

But Moody’s said prepayment rates are at historical lows — averaging in the mid to high single digits — and are expected to remain depressed in the near term in light of a tight credit environment and declining home-equity.

“Given the lack of pool seasoning, cumulative losses have not yet risen as steeply as delinquencies,” the ratings agency stated. “However, many pools are starting to show a sharp increase in the rate of loss realization. As the pace of liquidations has picked up, the performance data suggests worsening loss severities.”


Alt-A loans with subprime credit are performing worse than those with near-prime credit.

Moody’s noted that when Alt-A loans include an option adjustable-rate mortgage, delinquency outpaces that of pools without option-ARMs. This was attributed to weaker loan-to-values caused by negative amortization.The New York-based firm said it plans to review ratings on Alt-A transactions over the coming months.

Given the marked deterioration in recent performance, the expectation is that there will be further negative rating actions and in some cases, multi-notch downgrades,” the announcement said.

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Op dinsdag 18 november 2008 18:11 schreef TubewayDigital het volgende:
ben jij zelf analist bij een bank drugshond, als ik zie wat jij allemaal post