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22 Sep 2008
Remember kids, CYA first ...
22 Sep 2008 11:53 amLehman Brothers created a $2.5 billon bonus for their New York head office staff before declaring bankrupcy last week. Lehman's London staff got nada, and the New York office pulled in $8 billion in cash from Lehman's European businesses just before the bankrupcy.
Treasury Secretary Henry Paulson says that suggestions that the CEOs of failing financial companies share some portion of the blame for their failures, and perhaps give up bits of their massive salaries and multi-million dollar golden parachutes, have no place in resolving the current financial crisis. Looks like he's on the same page as Lehman's New York office.
Do we really want to give Paulson $700 billion to use for purchasing mortgage-related assets or paying administrative costs as he personally sees fit while prohibiting any review?
Oh, Morgan Stanley and Goldman Sachs -- who last Tuesday were both upbeat in public comments about being investment banks -- yesterday closed their doors as investment banks, reopening as bank holding companies. Here's a paragraph from Wikipedia (with links) that sums up the history:
Treasury Secretary Henry Paulson says that suggestions that the CEOs of failing financial companies share some portion of the blame for their failures, and perhaps give up bits of their massive salaries and multi-million dollar golden parachutes, have no place in resolving the current financial crisis. Looks like he's on the same page as Lehman's New York office.
Do we really want to give Paulson $700 billion to use for purchasing mortgage-related assets or paying administrative costs as he personally sees fit while prohibiting any review?
Oh, Morgan Stanley and Goldman Sachs -- who last Tuesday were both upbeat in public comments about being investment banks -- yesterday closed their doors as investment banks, reopening as bank holding companies. Here's a paragraph from Wikipedia (with links) that sums up the history:
In the US, the Glass-Steagall Act, initially created in the wake of the Stock Market Crash of 1929, prohibited banks from both accepting deposits and underwriting securities which led to segregation of investment banks from commercial banks. Glass-Steagall was effectively repealed for many large financial institutions by the Gramm-Leach-Bliley Act in 1999.
