Ad astra per aspera
Oct. 18 (Bloomberg) -- Bonuses for 5,000 or fewer investment bankers around the world are unjustifiably large and reflect "market failure" because their institutions tend to overcharge clients, U.K. Treasury Minister Paul Myners said. "We're talking here probably about less than 5,000 people globally who are being paid these enormous bonuses," Myners said today in an interview on the British Broadcasting Corp.'s Andrew Marr show, when asked about the size of payouts for employees of Goldman Sachs Group Inc. "That has to stop. It isn't justifiable, it can be a source of risk." Goldman has set aside $16.7 billion to pay employees so far this year, close to the amount it allocated in the first three quarters of 2007, when compensation reached an all-time high. Royal Bank of Scotland Group Plc said today that it hasn't taken decisions on bonuses yet after the Sunday Times said that some employees may take home record pay. "There's an element of market failure here," Myners said. "Quite frankly, the clients of these investment banks probably are not challenging enough on the fees and the very large spreads that these investment banks are currently charging. "I'm saying to companies: `For goodness sake, why are you paying these fees?'" he said. "I'm saying it to pension funds: `Why are you paying such large spreads?'"
Oct. 18 (Bloomberg) -- Bonuses for 5,000 or fewer investment bankers around the world are unjustifiably large and reflect "market failure" because their institutions tend to overcharge clients, U.K. Treasury Minister Paul Myners said.
"We're talking here probably about less than 5,000 people globally who are being paid these enormous bonuses," Myners said today in an interview on the British Broadcasting Corp.'s Andrew Marr show, when asked about the size of payouts for employees of Goldman Sachs Group Inc. "That has to stop. It isn't justifiable, it can be a source of risk."
Goldman has set aside $16.7 billion to pay employees so far this year, close to the amount it allocated in the first three quarters of 2007, when compensation reached an all-time high. Royal Bank of Scotland Group Plc said today that it hasn't taken decisions on bonuses yet after the Sunday Times said that some employees may take home record pay.
"There's an element of market failure here," Myners said. "Quite frankly, the clients of these investment banks probably are not challenging enough on the fees and the very large spreads that these investment banks are currently charging.
"I'm saying to companies: `For goodness sake, why are you paying these fees?'" he said. "I'm saying it to pension funds: `Why are you paying such large spreads?'"
You can say that again, and to mutual fund savers as well! I feel just as exasperated as he does. Why, why, why? Peak oil is not an energy crisis. It is a liquid fuel crisis.
"I'm saying to companies: `For goodness sake, why are you paying these fees?'" he said. "I'm saying it to pension funds: `Why are you paying such large spreads?'" You can say that again, and to mutual fund savers as well! I feel just as exasperated as he does. Why, why, why?
You can say that again, and to mutual fund savers as well! I feel just as exasperated as he does. Why, why, why?
These companies didn't make bad loans because they simply had lax procedures, these companies were all about making large short term profits that could be creamed off by the directors ith little thought for the long term viability of the company. They seemed almost designed to go bust, but only after certain well-placed people were able to walk away with sackfulls of cash. This is City SOP of parasitism practiced as naked piracy. keep to the Fen Causeway
The Royal Bank of Scotland, which was bailed out with government money 12 months ago, has set aside almost £2bn for bonuses and salaries to investment banking staff - a figure that could double by the end of the year.After a week in which Goldman Sachs admitted it is on track to pay out its biggest ever bonuses, the Edinburgh-based RBS conceded that it too would be likely to offer bonuses to its 20,000 investment bankers this year.The remuneration bill for the investment bank division at RBS in the first half of 2009 reached £1.8bn - equal to £90,000 a head.The final total is expected to rise substantially, by the time a decision on bonus payouts is made by the bank at the end of the year.Unions reacted angrily to the potential sums for RBS investment bankers, particularly as their division sparked the crisis inside the bank. Rob MacGregor, national officer for Unite, said: "These RBS bankers are happy to return to business as usual and line their pockets while thousands of bank staff pay the price for reckless behaviour which almost destroyed the company.
The Royal Bank of Scotland, which was bailed out with government money 12 months ago, has set aside almost £2bn for bonuses and salaries to investment banking staff - a figure that could double by the end of the year.
After a week in which Goldman Sachs admitted it is on track to pay out its biggest ever bonuses, the Edinburgh-based RBS conceded that it too would be likely to offer bonuses to its 20,000 investment bankers this year.
The remuneration bill for the investment bank division at RBS in the first half of 2009 reached £1.8bn - equal to £90,000 a head.
The final total is expected to rise substantially, by the time a decision on bonus payouts is made by the bank at the end of the year.
Unions reacted angrily to the potential sums for RBS investment bankers, particularly as their division sparked the crisis inside the bank. Rob MacGregor, national officer for Unite, said: "These RBS bankers are happy to return to business as usual and line their pockets while thousands of bank staff pay the price for reckless behaviour which almost destroyed the company.
Rapidly rising unemployment in Britain's industrial heartlands has sent the real level of joblessness surging to well over 3m during the recession, according to a report to be published this week.Urging a package of help for dole queue blackspots, the study shows that widespread lay-offs in the manufacturing sector have widened the north-south divide in the labour market.Professor Steve Fothergill, author of the report for the Industrial Communities Alliance, said the real level of unemployment was close to 3.4m, more than double the 1.6m claimant count total once those ineligible for benefits and the hidden unemployed on incapacity benefits were taken into account."There are two disturbing things about this report," Fothergill said. "It underlines the extent to which the old industrial areas were quite a distance from full employment even before the recession started. But since the recession began, there has been a big jump in joblessness in the old industrial areas, which in many places is in excess of 10% of the workforce."Scotland, Wales, the West Midlands and the north bore the brunt of job cuts in the 1980s, when most of Britain's mines were closed and large numbers of factories shut down. Despite attempts to create new jobs through retail parks and call centres, Fothergill said the traditional manufacturing heartlands had still lagged behind the richer parts of the UK in terms of employment when the downturn began 18 months ago.
Rapidly rising unemployment in Britain's industrial heartlands has sent the real level of joblessness surging to well over 3m during the recession, according to a report to be published this week.
Urging a package of help for dole queue blackspots, the study shows that widespread lay-offs in the manufacturing sector have widened the north-south divide in the labour market.
Professor Steve Fothergill, author of the report for the Industrial Communities Alliance, said the real level of unemployment was close to 3.4m, more than double the 1.6m claimant count total once those ineligible for benefits and the hidden unemployed on incapacity benefits were taken into account.
"There are two disturbing things about this report," Fothergill said. "It underlines the extent to which the old industrial areas were quite a distance from full employment even before the recession started. But since the recession began, there has been a big jump in joblessness in the old industrial areas, which in many places is in excess of 10% of the workforce."
Scotland, Wales, the West Midlands and the north bore the brunt of job cuts in the 1980s, when most of Britain's mines were closed and large numbers of factories shut down. Despite attempts to create new jobs through retail parks and call centres, Fothergill said the traditional manufacturing heartlands had still lagged behind the richer parts of the UK in terms of employment when the downturn began 18 months ago.
Old style sexism has "died a death" in the city, so says the deputy chairman of fund management firm JO Hambro. Equality laws are holding women back, says Nichola Pease In fact, controversially, Nicola Pease, 48, suggests that red tape is now holding women back rather than helping them to get ahead. The mother-of-three, who's been working in the City of London since the 1980s, made the comments to MPs investigating the issue of Women in the City. But has sexism really left the financial sector? "Prejudicial attitudes in flexible working structures and discriminatory pay practises means that today women suffer an 80% pay gap with regards to bonuses," says Kat Banyard, campaign director at the Fawcett Society. Pay battleMs Banyard says that despite having equal pay rights enshrined in law since the 1970s, a pay gap still exists and the law is not strong enough. "As a result companies are not required to check that they are paying equally, so it's absolutely crucial we have mandatory pay audits," she adds. "The Equality Bill currently going through Parliament is a once in a generation opportunity to reform equal pay law we cannot afford to miss."
Old style sexism has "died a death" in the city, so says the deputy chairman of fund management firm JO Hambro.
In fact, controversially, Nicola Pease, 48, suggests that red tape is now holding women back rather than helping them to get ahead.
The mother-of-three, who's been working in the City of London since the 1980s, made the comments to MPs investigating the issue of Women in the City.
But has sexism really left the financial sector?
"Prejudicial attitudes in flexible working structures and discriminatory pay practises means that today women suffer an 80% pay gap with regards to bonuses," says Kat Banyard, campaign director at the Fawcett Society.
Pay battle
Ms Banyard says that despite having equal pay rights enshrined in law since the 1970s, a pay gap still exists and the law is not strong enough.
"As a result companies are not required to check that they are paying equally, so it's absolutely crucial we have mandatory pay audits," she adds.
"The Equality Bill currently going through Parliament is a once in a generation opportunity to reform equal pay law we cannot afford to miss."
Nicola Pease rarely gives interviews and is uncomfortable with the public's fascination over the perfectly groomed, rich and successful Alpha Females of the Square Mile, though it has to be said that she fulfils the textbook qualifications. A tall, slim blonde with a winning smile, 39-year-old Pease is married to multi-millionaire fund manager Crispin Odey, and combines running JO Hambro with bringing up three children....She comes from a City dynasty. Her father Sir Richard, comes from one of the founding familles of Barclays Bank and Is a former chairman of Yorkshire Bank. Her brother also named Richard, works for New Star Asset Management.
Nicola Pease rarely gives interviews and is uncomfortable with the public's fascination over the perfectly groomed, rich and successful Alpha Females of the Square Mile, though it has to be said that she fulfils the textbook qualifications.
A tall, slim blonde with a winning smile, 39-year-old Pease is married to multi-millionaire fund manager Crispin Odey, and combines running JO Hambro with bringing up three children.
...
She comes from a City dynasty. Her father Sir Richard, comes from one of the founding familles of Barclays Bank and Is a former chairman of Yorkshire Bank. Her brother also named Richard, works for New Star Asset Management.
combines running JO Hambro with bringing up three children.
She brings up her children? Ad astra per aspera
'Beckham of the City' who preyed on banks gave Tories £30,000 | Mail Online
A hedge fund high-flyer who made a killing from the financial crash has donated £30,000 to the Tories. Crispin Odey, nicknamed the 'David Beckham of the City' for his success in the money markets, raked in a fortune by short-selling shares in British banks. His gift, handed over in July, is the latest in a series from so-called City 'wolves' seeking to bankroll David Cameron's bid for Downing Street.
A hedge fund high-flyer who made a killing from the financial crash has donated £30,000 to the Tories.
Crispin Odey, nicknamed the 'David Beckham of the City' for his success in the money markets, raked in a fortune by short-selling shares in British banks.
His gift, handed over in July, is the latest in a series from so-called City 'wolves' seeking to bankroll David Cameron's bid for Downing Street.
A FORMER Northern Rock boss has come under fire after it was revealed her husband made £28m out of the credit crunch. Nichola Pease was a director of the Newcastle-based bank before it crashed in September last year, leaving more than 2000 workers facing the dole. Around 150,000 shareholders, including many pensioners, lost around more than £2bn as the Northern Rock went into meltdown. Ms Pease, who was a non-executive director for eight years, stood down from the Northern Rock in November. She had been paid around £65,000-a-year for her part-time job at the bank. The 47-year-old mum-of-three was already reportedly the 20th richest woman in Britain. She is the chief executive of J Hambro Capital Management and is married to hedge fund manager Crispin Odey. The pair, who are believed to be worth around £300m, are nicknamed the "Posh and Becks" of the City of London.
A FORMER Northern Rock boss has come under fire after it was revealed her husband made £28m out of the credit crunch.
Nichola Pease was a director of the Newcastle-based bank before it crashed in September last year, leaving more than 2000 workers facing the dole.
Around 150,000 shareholders, including many pensioners, lost around more than £2bn as the Northern Rock went into meltdown.
Ms Pease, who was a non-executive director for eight years, stood down from the Northern Rock in November. She had been paid around £65,000-a-year for her part-time job at the bank. The 47-year-old mum-of-three was already reportedly the 20th richest woman in Britain.
She is the chief executive of J Hambro Capital Management and is married to hedge fund manager Crispin Odey.
The pair, who are believed to be worth around £300m, are nicknamed the "Posh and Becks" of the City of London.
REYKJAVIK (Reuters) - Iceland's budget committee will meet on Sunday to finalise a new law on reimbursing Britain and the Netherlands for deposits lost when the island's banks collapsed last year, the daily Morgunbladid said. Iceland passed a law in August to repay more than $5 billion (3 billion pounds) lost in high-interest 'Icesave' accounts, but Britain and the Netherlands baulked at the terms, holding up aid from the International Monetary Fund and other lenders for the island's stricken economy. Morgunbladid said the proposed changes to the law would mean the government's repayment guarantee will not run out in 2024 with remaining debts needing to be renegotiated at that date, as stated in the old law.
REYKJAVIK (Reuters) - Iceland's budget committee will meet on Sunday to finalise a new law on reimbursing Britain and the Netherlands for deposits lost when the island's banks collapsed last year, the daily Morgunbladid said.
Iceland passed a law in August to repay more than $5 billion (3 billion pounds) lost in high-interest 'Icesave' accounts, but Britain and the Netherlands baulked at the terms, holding up aid from the International Monetary Fund and other lenders for the island's stricken economy.
Morgunbladid said the proposed changes to the law would mean the government's repayment guarantee will not run out in 2024 with remaining debts needing to be renegotiated at that date, as stated in the old law.
The Women's Forum for the Economy and Society in Deauville has exposed how the crisis has affected women worldwideA Congolese woman told me: 'For you in the west, the financial crisis is a change in lifestyle. For us it is a matter of life and death.'" Iraqi-born Zainab Salbi, the founder of Washington-based organisation Women for Women International, speaks about this encounter with all the eloquence and passion she can muster as an advocate for the silent victims of the banking collapse.Their voices may be drowned out by bankers noisily protesting about possible curbs on bonuses, but women and girls in poor countries have been hard hit by the implosion of banks thousands of miles away - and unlike the financiers, they are not being bailed out. For every dollar of development aid, Salbi says, women and girls can receive as little as half a cent. "They are just not on the radar."Salbi, whose father was a personal pilot for Saddam Hussein, has helped nearly 200,000 women to recover from the devastation of war, to gain economic independence and to help rebuild more stable societies. Her work has won support from the likes of Oprah Winfrey, Angelina Jolie and Brad Pitt.
A Congolese woman told me: 'For you in the west, the financial crisis is a change in lifestyle. For us it is a matter of life and death.'" Iraqi-born Zainab Salbi, the founder of Washington-based organisation Women for Women International, speaks about this encounter with all the eloquence and passion she can muster as an advocate for the silent victims of the banking collapse.
Their voices may be drowned out by bankers noisily protesting about possible curbs on bonuses, but women and girls in poor countries have been hard hit by the implosion of banks thousands of miles away - and unlike the financiers, they are not being bailed out. For every dollar of development aid, Salbi says, women and girls can receive as little as half a cent. "They are just not on the radar."
Salbi, whose father was a personal pilot for Saddam Hussein, has helped nearly 200,000 women to recover from the devastation of war, to gain economic independence and to help rebuild more stable societies. Her work has won support from the likes of Oprah Winfrey, Angelina Jolie and Brad Pitt.
Peak oil is not an energy crisis. It is a liquid fuel crisis.
GMAC Bank | DJ Newswire | 16 Oct 2009
GMAC was granted bank holding company status in December. This status gave it access to the Treasury Department's Troubled Asset Relief Program, or TARP, and also access to federal programs aimed at helping financial companies raise cheap debt in a frozen credit market. The Treasury said in May it would swap $884 million of its existing preferred- stock investment in GMAC for common stock, giving the U.S. government a 35.4% equity stake in the lender. This stake could increase to more than 50% if GMAC, amid potential mounting losses and meager capital levels, further converted the government's investments into common equity. Despite the help from taxpayers, GMAC is struggling to return to profitability as it takes hit after hit on its mortgage unit, Residential Capital LLC. ResCap, one of the largest lenders to borrowers with shaky credit, is still reeling from its souring mortgages. ResCap reported a loss of $841 million for the second quarter, its 11th consecutive quarterly loss. But excluding gains stemming from its debt being forgiven by GMAC, ResCap's loss totaled $1.7 billion. In the same quarter, GMAC's credit loss provisions jumped 50% from a year earlier to $1.16 billion. For 2008 and 2007, ResCap's net loss totaled a staggering $9.9 billion. GMAC also plowed in $6 billion of capital, which included forgiving ResCap debt, during those two years. Propping its mortgage unit delays GMAC's return to profitability, which, in turn, renders uncertain the lender's ability to repay federal funds. In addition, GMAC has to raise $5.6 billion by Nov. 9 to satisfy the requirements of the government-conducted stress tests earlier this year. GMAC could raise this capital by issuing new equity, divesting its businesses or asking for additional federal help.
The Treasury said in May it would swap $884 million of its existing preferred- stock investment in GMAC for common stock, giving the U.S. government a 35.4% equity stake in the lender. This stake could increase to more than 50% if GMAC, amid potential mounting losses and meager capital levels, further converted the government's investments into common equity.
Despite the help from taxpayers, GMAC is struggling to return to profitability as it takes hit after hit on its mortgage unit, Residential Capital LLC. ResCap, one of the largest lenders to borrowers with shaky credit, is still reeling from its souring mortgages.
ResCap reported a loss of $841 million for the second quarter, its 11th consecutive quarterly loss. But excluding gains stemming from its debt being forgiven by GMAC, ResCap's loss totaled $1.7 billion. In the same quarter, GMAC's credit loss provisions jumped 50% from a year earlier to $1.16 billion.
For 2008 and 2007, ResCap's net loss totaled a staggering $9.9 billion. GMAC also plowed in $6 billion of capital, which included forgiving ResCap debt, during those two years. Propping its mortgage unit delays GMAC's return to profitability, which, in turn, renders uncertain the lender's ability to repay federal funds.
In addition, GMAC has to raise $5.6 billion by Nov. 9 to satisfy the requirements of the government-conducted stress tests earlier this year. GMAC could raise this capital by issuing new equity, divesting its businesses or asking for additional federal help.
Almost 51 million square feet of office space is vacant in Southland, and that number is expected to continue growing well into next year.
Though Wall Street investors are showing some enthusiasm about the direction of the economy, shell-shocked business owners in Southern California are still more inclined to shrink than grow their companies. ¶ Problems at white-collar firms are bleeding the region's enormous office rental industry. Almost 51 million square feet of office space in Los Angeles County, Orange County and the Inland Empire is now empty -- more than 17% of the total. ¶ The exodus from office buildings that started in late 2007 accelerated during the third quarter as the anemic business climate took its toll on the real estate rental industry, according to the Cushman & Wakefield real estate brokerage. ¶ "These vacancies are a direct reflection on unemployment," said Joe Vargas, an executive vice president at Cushman & Wakefield. "Companies continue to reduce their workforce, or they are not hiring." Troubled business owners facing expiring leases often choose to downsize these days and take less office space, even though rents are falling, he said. Real estate rentals are a lagging indicator of the economy, so the shrinking-space trend is expected to persist well into next year even if the nation's financial outlook continues to improve. Industry observers were divided in their assessments about whether tenants at least showed signs of interest in renting new office space. .... Cushman & Wakefield's Vargas predicts Southern California will remain a tenant's market through mid-2010 and perhaps longer if employment doesn't start picking up. "This is certainly the worst downturn we've seen," Vargas said. "We're not going to see real improvement until job growth occurs."
Real estate rentals are a lagging indicator of the economy, so the shrinking-space trend is expected to persist well into next year even if the nation's financial outlook continues to improve. Industry observers were divided in their assessments about whether tenants at least showed signs of interest in renting new office space. .... Cushman & Wakefield's Vargas predicts Southern California will remain a tenant's market through mid-2010 and perhaps longer if employment doesn't start picking up. "This is certainly the worst downturn we've seen," Vargas said. "We're not going to see real improvement until job growth occurs."
For years, whenever anyone asked Raj Rajaratnam about the success of his hedge fund, the Galleon Group, he chalked it up to being hungrier than everyone else. "It is pride, and I want to win," Mr. Rajaratnam said in "The New Investment Superstars," a book by Lois Peltz published in 2001. "After awhile, money is not the motivation. I want to win every time. Taking calculated risks gets my adrenaline pumping." Now prosecutors are claiming that Mr. Rajaratnam, 52, crossed the line into criminal activity. At dawn on Friday, Mr. Rajaratnam was arrested at his expensive Manhattan home, charged with running the biggest insider trading scheme involving a hedge fund. He and five others are accused by the Justice Department and the Securities and Exchange Commission of relying on a vast network of company insiders and consultants to make more than $20 million in profit from 2006 to 2009. Mr. Rajaratnam's lawyer has said his client is innocent. He is free on $100 million bail and is expected to be in the office Monday to address Galleon employees. In 2007, Mr. Rajaratnam's name arose in connection with an inquiry into fund-raising for the Tamil Tigers, the Sri Lankan rebel group that was defeated in May after a quarter-century of violence. News of Mr. Rajaratnam's arrest has also shaken the secretive hedge fund world, in which intelligence on companies is often shared among Wall Street analysts, traders and other investors. "The defendants operated in a cozy world of `you scratch my back, I'll scratch your back,' " Preet Bharara, the United States attorney for the Southern District of New York, said on Friday. He added that the case should be a "wake-up call" for hedge fund managers who even think about insider trading.
Now prosecutors are claiming that Mr. Rajaratnam, 52, crossed the line into criminal activity.
At dawn on Friday, Mr. Rajaratnam was arrested at his expensive Manhattan home, charged with running the biggest insider trading scheme involving a hedge fund. He and five others are accused by the Justice Department and the Securities and Exchange Commission of relying on a vast network of company insiders and consultants to make more than $20 million in profit from 2006 to 2009. Mr. Rajaratnam's lawyer has said his client is innocent. He is free on $100 million bail and is expected to be in the office Monday to address Galleon employees.
In 2007, Mr. Rajaratnam's name arose in connection with an inquiry into fund-raising for the Tamil Tigers, the Sri Lankan rebel group that was defeated in May after a quarter-century of violence. News of Mr. Rajaratnam's arrest has also shaken the secretive hedge fund world, in which intelligence on companies is often shared among Wall Street analysts, traders and other investors.
"The defendants operated in a cozy world of `you scratch my back, I'll scratch your back,' " Preet Bharara, the United States attorney for the Southern District of New York, said on Friday. He added that the case should be a "wake-up call" for hedge fund managers who even think about insider trading.
