Report: $30B in Bonuses Doled on Wall St.
(AP)
Goldman Sachs, Morgan Stanley and JPMorgan Chase, which have all exited the government's Troubled Asset Relief Program, or TARP, are set to dole out $29.7 billion in bonus money.
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November 9, 2009 7:37 AM Just a year after receiving a record-setting amount of government aid to rescue their failing companies, three of Wall Street's giants will pay the government's generosity forward, in the form of nearly $30 billion worth of executive bonuses, according a report in Bloomberg.
Goldman Sachs, Morgan Stanley and JPMorgan Chase, which have all exited the government's Troubled Asset Relief Program, or TARP, are set to dole out $29.7 billion in bonus money.
Goldman Sachs, Morgan Stanley and JPMorgan Chase, which have all exited the government's Troubled Asset Relief Program, or TARP, are set to dole out $29.7 billion in bonus money.
November 5, 2009 4:04 PM 
Senate Banking Committee Chair Chris Dodd is planning to push a financial reform plan that would restructure the government's control of the banking industry, according to today's Wall Street Journal.
Dodd, the Democratic senator from Connecticut, has been praised by President Obama for his financial reform efforts, particularly for his work to establish a consumer protection agency.
His new plan, however, would significantly diverge from efforts by the Obama administration and the House Financial Services committee to overhaul the nation's financial regulation system.
The bill Dodd is proposing would almost completely restructure the federal financial regulation system, taking almost all bank-supervising responsibilities away from the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), the Journal reports. Bank-supervisory responsibilities would fall to a new agency that would oversee all national financial institutions: one single financial regulator. Currently, America has four federal regulatory agencies.
Senator Dodd Proposes Major Financial Reform
(CBS)
Dodd, the Democratic senator from Connecticut, has been praised by President Obama for his financial reform efforts, particularly for his work to establish a consumer protection agency.
His new plan, however, would significantly diverge from efforts by the Obama administration and the House Financial Services committee to overhaul the nation's financial regulation system.
The bill Dodd is proposing would almost completely restructure the federal financial regulation system, taking almost all bank-supervising responsibilities away from the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), the Journal reports. Bank-supervisory responsibilities would fall to a new agency that would oversee all national financial institutions: one single financial regulator. Currently, America has four federal regulatory agencies.
November 5, 2009 11:18 AM
Some NYC Businesses Receive H1N1 Vaccine
Some of New York's largest companies have received the H1N1 vaccine in the last week.
October 30, 2009 4:54 PM 
This post by Rachel Elson originally appeared on CBS' MoneyWatch.com.
In the hours leading up to the collapse of Lehman Brothers, JP Morgan Chase CEO Jamie Dimon warned his top executives to prepare for the worst. "There is no way that Washington is going to bail out an investment bank," he told his team. "Nor should they."
Andrew Ross Sorkin tells the story of the ensuing meltdown in his new book, "Too Big to Fail," going behind the scenes for a play-by-play account of the 2008 crisis on Wall Street.
Earlier this week, Sorkin stopped by the CBS MoneyWatch studios to discuss the meltdown with editor-at-large Jill Schlesinger.
They discussed the causes of the financial crisis, as well as the backstage drama, the big egos, and one unsung hero. Sorkin also calls out the two most important changes that he thinks could prevent a repeat of the meltdown.
You can watch Schlesinger's interview with Sorkin below, or read an excerpt of his book, at CBS MoneyWatch.
Too Big to Fail: Countdown to Meltdown
This post by Rachel Elson originally appeared on CBS' MoneyWatch.com.
In the hours leading up to the collapse of Lehman Brothers, JP Morgan Chase CEO Jamie Dimon warned his top executives to prepare for the worst. "There is no way that Washington is going to bail out an investment bank," he told his team. "Nor should they."
Andrew Ross Sorkin tells the story of the ensuing meltdown in his new book, "Too Big to Fail," going behind the scenes for a play-by-play account of the 2008 crisis on Wall Street.
Earlier this week, Sorkin stopped by the CBS MoneyWatch studios to discuss the meltdown with editor-at-large Jill Schlesinger.
They discussed the causes of the financial crisis, as well as the backstage drama, the big egos, and one unsung hero. Sorkin also calls out the two most important changes that he thinks could prevent a repeat of the meltdown.
You can watch Schlesinger's interview with Sorkin below, or read an excerpt of his book, at CBS MoneyWatch.
October 22, 2009 12:00 PM
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Channeling his inner Russian emperor, Pay Czar Kenneth Feinberg's compensation edict shook top executives at some of the nation's biggest banks. The Special Master will cut the cash component of salaries for the top 25 earners at the companies he oversees - AIG, Bank of America, Citigroup, Chrysler, Chrysler Financial, GM and GMAC.
How big a deal is this? First of all, we're talking about 175 employees, so let's not leap to "compensation is changing forever!" And Feinberg is not cutting total compensation, he's changing the composition of pay packages - less cash, more stock with longer vesting periods. In other words, the top guys will have more skin in the game.
Pay Czar Feinberg Speaks and Wall Street Cringes
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
(AP)
How big a deal is this? First of all, we're talking about 175 employees, so let's not leap to "compensation is changing forever!" And Feinberg is not cutting total compensation, he's changing the composition of pay packages - less cash, more stock with longer vesting periods. In other words, the top guys will have more skin in the game.
October 14, 2009 11:51 AM 
Happy days are here again for Wall St. workers.
Twenty-three major U.S. banks and investment firms are on a pace to dole out $140 billion in compensation this year, exceeding the pre-crisis levels of 2007, according to a Wall Street Journal report ($).
Many banks have quickly returned to strong revenue levels a year after the entire financial system was threatened – a crisis that sparked public outrage over the banks' risky practices and exorbitant compensation levels and prompted a multi-billion-dollar government rescue.
But now, with the stock market recovering and the credit crunch easing, banks and investment houses are pumping money back into human capital.
The $140 billion estimate, which amounts to a $143,400 average worker salary, is 20 percent higher than last year's $117 billion. It also beats out 2007's record level of $130 billion.
Among the companies included in the Journal's survey are banks JPMorgan Chase, Bank of America and Citigroup and investment firms Goldman Sachs and Morgan Stanley.
The Journal analyzed the firms' quarterly compensation disclosures and calculated them as a percentage of quarterly earnings. They then extrapolated compensation estimates based on annual revenue projections – which are expected to reach $437 billion this year.
Wall St. Salaries on Record-Setting Pace
(CBS / iStock Photo)
Twenty-three major U.S. banks and investment firms are on a pace to dole out $140 billion in compensation this year, exceeding the pre-crisis levels of 2007, according to a Wall Street Journal report ($).
Many banks have quickly returned to strong revenue levels a year after the entire financial system was threatened – a crisis that sparked public outrage over the banks' risky practices and exorbitant compensation levels and prompted a multi-billion-dollar government rescue.
But now, with the stock market recovering and the credit crunch easing, banks and investment houses are pumping money back into human capital.
The $140 billion estimate, which amounts to a $143,400 average worker salary, is 20 percent higher than last year's $117 billion. It also beats out 2007's record level of $130 billion.
Among the companies included in the Journal's survey are banks JPMorgan Chase, Bank of America and Citigroup and investment firms Goldman Sachs and Morgan Stanley.
The Journal analyzed the firms' quarterly compensation disclosures and calculated them as a percentage of quarterly earnings. They then extrapolated compensation estimates based on annual revenue projections – which are expected to reach $437 billion this year.
October 7, 2009 10:19 AM 
U.S. banks "are slow" to absorb losses on commercial real-estate loans, according to a Federal Reserve analyst. That's stoking fears that banks will face a crisis similar to the one fueled by the collapse of the residential housing market.
According to a Wall Street Journal report ($) Wednesday, a Fed real-estate expert told banking regulators last month that "banks will be slow to recognize the severity of the loss - just as they were in residential."
Commercial property values are down along with rental payments, pummeling lenders. But instead of taking hits on bad loans immediately, many banks are "extending loans when they come due even if they wouldn't make those loans now," the Journal states.
"There's been an extend-and-pretend philosophy by banks to forestall hits to their balance sheets that might occur," Patrick Phillips, new chief executive of the Urban Land Institute, told the Journal.
A Journal analysis also finds that banks heavily exposed to commercial real estate are keeping less cash on hand to cover bad loans – setting aside just 38 cents in reserves for every $1 in loans during the second quarter. That's down from $1.58 in extra capital for every dollar in bad loans at the beginning of 2007.
According to the Fed presentation, commercial real-estate losses are expected to hit 45 percent next year.
"Slow" Banks May Point To Commercial Real-Estate Crisis
(CBS / iStock Photo)
According to a Wall Street Journal report ($) Wednesday, a Fed real-estate expert told banking regulators last month that "banks will be slow to recognize the severity of the loss - just as they were in residential."
Commercial property values are down along with rental payments, pummeling lenders. But instead of taking hits on bad loans immediately, many banks are "extending loans when they come due even if they wouldn't make those loans now," the Journal states.
"There's been an extend-and-pretend philosophy by banks to forestall hits to their balance sheets that might occur," Patrick Phillips, new chief executive of the Urban Land Institute, told the Journal.
A Journal analysis also finds that banks heavily exposed to commercial real estate are keeping less cash on hand to cover bad loans – setting aside just 38 cents in reserves for every $1 in loans during the second quarter. That's down from $1.58 in extra capital for every dollar in bad loans at the beginning of 2007.
According to the Fed presentation, commercial real-estate losses are expected to hit 45 percent next year.
October 6, 2009 9:49 AM 
U.K. residents baffled by their banks' jargon-filled explanations have an ally in Chrissie Maher.
The 71-year-old is the founder of the Plain English Campaign, a group formed 30 years ago to counter "the ever-growing tide of confusing and pompous language" that "takes away our democratic rights." The group has taken on the language practices of their own government and even the European Union.
And, according to a Wall Street Journal report Tuesday, one of Maher's latest targets is the "incomprehensible gobbledygook" of Britain's financial system.
"Families are losing their homes because of jargon-filled credit agreements," Maher told the paper. "Language has been misused and has contributed to the economic disaster."
In one example, Maher sent the Royal Bank of Scotland a critique of a pamphlet she received several months ago, citing its "tortuous and ambiguous language" and changing terms like "maximum debit balance" to "the most that can be owed."
U.K. Banks Get "English" Tutor
(iStockphoto)
The 71-year-old is the founder of the Plain English Campaign, a group formed 30 years ago to counter "the ever-growing tide of confusing and pompous language" that "takes away our democratic rights." The group has taken on the language practices of their own government and even the European Union.
And, according to a Wall Street Journal report Tuesday, one of Maher's latest targets is the "incomprehensible gobbledygook" of Britain's financial system.
"Families are losing their homes because of jargon-filled credit agreements," Maher told the paper. "Language has been misused and has contributed to the economic disaster."
In one example, Maher sent the Royal Bank of Scotland a critique of a pamphlet she received several months ago, citing its "tortuous and ambiguous language" and changing terms like "maximum debit balance" to "the most that can be owed."
October 1, 2009 11:04 AM
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Ken Lewis, the embattled CEO of Bank of America has always been full of surprises. It sure took my breath away when Lewis bought Countrywide Mortgage on the eve of the biggest mortgage meltdown in US history, not to mention his shot gun $50 billion acquisition of Merrill Lynch, after conducting what seemed to be five minutes of due diligence.
The guy likes to spring news on the market, which is why Ken Lewis' resignation from Bank of America shouldn't have been all that surprising. But it was and here's why: Ken Lewis had essentially gotten everything he had ever wished for. He had finally cobbled together enough companies to vault him into the big leagues of banking. The man who started at Nations Bank had built a global financial conglomerate that demanded respect even from those Wall Street execs that Lewis supposedly despised.
B of A's Ken Lewis: Beware What You Wish For
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Ken Lewis, the embattled CEO of Bank of America has always been full of surprises. It sure took my breath away when Lewis bought Countrywide Mortgage on the eve of the biggest mortgage meltdown in US history, not to mention his shot gun $50 billion acquisition of Merrill Lynch, after conducting what seemed to be five minutes of due diligence.
(AP Photo/Bebeto Matthews)
The guy likes to spring news on the market, which is why Ken Lewis' resignation from Bank of America shouldn't have been all that surprising. But it was and here's why: Ken Lewis had essentially gotten everything he had ever wished for. He had finally cobbled together enough companies to vault him into the big leagues of banking. The man who started at Nations Bank had built a global financial conglomerate that demanded respect even from those Wall Street execs that Lewis supposedly despised.
September 25, 2009 1:06 PM
Big Banks' Sneaky New Tricks
This post by Kathy Kristof originally appeared on CBS' MoneyWatch.com.
Erik Weech learned about sneaky banking polices the hard way.
A few weeks ago, Bank of America hit the Chicago marketing man with a $35 overdraft fee when he had more than $130 in his account. The bank was apparently "holding" his money for charges that hadn't cleared - only they appear to have been holding three times more than he actually spent. Then, if that wasn't enough, they "reordered" his subsequent purchases in a way that tripled his overdraft charges. Within a couple days, he had racked up $140 in fees.
Authorization holds and transaction reordering are among the banking practices taking increasing heat recently from both consumers and lawmakers. Although nickel-and-dime fees are pervasive - just check your cable bill - the big financial institutions have become poster children for customer abuse. With direct access to your cash, they have developed a range of sneaky tricks that can quickly whittle down your account.
Use your credit card and you’re likely to find that they’ve hiked your interest rate, perhaps switching it from a fixed-rate to a variable. Don’t use your card and you could get hit with an inactivity fee. Fail to fix an overdraft promptly and you could get hit with a zero balance fee — in addition to overdraft charges. Flee the bank and they’re likely to slap you with an exit fee.
“Consumers would be shocked at how many different tricks the regulators allow banks to use to take money out of their wallets,” said Ed Mierzwinski, consumer services projects director at the U.S. Public Interest Research Group in Washington. “As long as the banks disclose in the small print that they are going to rob you, it’s legal to rob you.”
Erik Weech learned about sneaky banking polices the hard way.
A few weeks ago, Bank of America hit the Chicago marketing man with a $35 overdraft fee when he had more than $130 in his account. The bank was apparently "holding" his money for charges that hadn't cleared - only they appear to have been holding three times more than he actually spent. Then, if that wasn't enough, they "reordered" his subsequent purchases in a way that tripled his overdraft charges. Within a couple days, he had racked up $140 in fees.
Authorization holds and transaction reordering are among the banking practices taking increasing heat recently from both consumers and lawmakers. Although nickel-and-dime fees are pervasive - just check your cable bill - the big financial institutions have become poster children for customer abuse. With direct access to your cash, they have developed a range of sneaky tricks that can quickly whittle down your account.
(WCBS)
Use your credit card and you’re likely to find that they’ve hiked your interest rate, perhaps switching it from a fixed-rate to a variable. Don’t use your card and you could get hit with an inactivity fee. Fail to fix an overdraft promptly and you could get hit with a zero balance fee — in addition to overdraft charges. Flee the bank and they’re likely to slap you with an exit fee.
“Consumers would be shocked at how many different tricks the regulators allow banks to use to take money out of their wallets,” said Ed Mierzwinski, consumer services projects director at the U.S. Public Interest Research Group in Washington. “As long as the banks disclose in the small print that they are going to rob you, it’s legal to rob you.”
