Banking Bailout Media Articles
Below are key excerpts of revealing news articles on the 2008 banking bailout from reliable news media sources. If any link fails to function, a paywall blocks full access, or the article is no longer available, try these digital tools.
Even as the economy continues to struggle, much of Wall Street is minting money and looking forward again to hefty bonuses. Many Americans wonder how this can possibly be. How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes? It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions debts helped set the stage for this new era of Wall Street wealth. Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder a benefit of less competition after the failure of some investment firms last year. So even as big banks fight efforts in Congress to subject their industry to greater regulation and to impose some restrictions on executive pay Wall Street has Washington to thank in part for its latest bonanza. All of this is facilitated by the Federal Reserve and the government, said Gary Richardson, a research fellow at the National Bureau of Economic Research. But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them. I have big concerns about that.
Note: For lots more on the realities of the Wall Street bailout, click here.
Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter. 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008. Most disturbing is that all foreclosures -- not just repossessions -- are rampant despite efforts to corral them. There are no firm statistics for it, but many industry watchers claim the percentage of REOs [properties possessed by the mortgage company after an unsuccessful foreclosure auction] caused by borrowers voluntarily walking away from their homes is skyrocketing. The foreclosure crisis may not diminish anytime soon.
Note: For lots more from major media sources on the impacts of the financial crash, click here.
On Tuesday, March 11th, 2008, somebody nobody knows who made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness "like buying 1.7 million lottery tickets," according to one financial analyst. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history. The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money...) at the humiliating price of $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. Six months after Bear was eaten by predators, virtually the same scenario repeated itself in the case of Lehman Brothers another top-five investment bank that in September 2008 was vaporized in an obvious case of market manipulation. From there, the financial crisis was on. When Bear and Lehman made their final leap off the cliff of history, both undeniably got a push ... in the form of a flat-out counterfeiting scheme called naked short-selling.
Note: Why isn't this being reported in the major media and aggressively investigated? For many reports from reliable sources on the corruption at the core of the Wall Street collapse and bailout, click here.
Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year -- a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street's pay culture. [Executives] at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal. Total compensation and benefits at the publicly traded firms analyzed by the Journal are on track to increase 20% from last year's $117 billion -- and to top 2007's $130 billion payout. This year, employees at the companies will earn an estimated $143,400 on average, up almost $2,000 from 2007 levels. The growth in compensation reflects Wall Street firms' rapid return to precrisis revenue levels. Even as the economy is sluggish and unemployment approaches 10%, these firms have been boosted by a stronger stock market, thawing credit market, a resurgence in deal making and the continuing effects of various government aid programs. So far, regulators and lawmakers have focused on making sure pay practices discourage excessive risk-taking, leaving to companies the question of how much is too much.
Note: For lots more on the realities of the Wall Street bailout, click here.
LOIS ROMANO: Welcome, Elizabeth Warren, Chairman of the Congressional Oversight Committee that is tasked with scrutinizing how the Treasury Department has spent $700 billion to shore up our failing financial institutions. There's a wonderful moment [in the movie "Capitalism: a Love Story"] when [Michael Moore] asks you where the $700 billion is, and you look at him and you say, "I don't know." So the question is: why don't you know? WARREN: Well, we don't know where the $700 billion is because the system was initially designed to make sure that we didn't know. When Secretary Paulson first put this money out into the banks, he didn't ask "what are you going to do with it?" He didn't put any restrictions on it. He didn't put any tabs on where it was going to go; in other words, he didn't ask. And if you don't ask, no one tells. And so we have a system that originally put more than $200 billion into the financial institutions basically saying just take it. ROMANO: And that money is gone. You have not been able to track where that money is? WARREN: Well, we don't know where the money went from the financial institutions. The big conversation at the time was that the credit markets are frozen; if we put money into the financial institutions, they will start lending it because that's what they do when they receive money. It was called the "Healthy Banks Program." Secretary Paulson kept saying, over and over, these are investments in healthy financial institutions, no one needs any subsidy, that [the] money was going to be used in lending to small businesses and consumers and kind of get our whole credit market going again. That didn't happen.
Note: To watch a powerfully revealing, five-minute video showing the Inspector General of the Federal Reserve testifying that she doesn't know where trillions of dollars are, click here. For a comprehensive overview of the realities underlying the government's bailout of the biggest financial institutions, click here.
No one, including himself, would argue that Bradley Birkenfeld, 44, is a saint. But at the same time, almost no one in the U.S. government would deny that Birkenfeld was absolutely essential to its landmark tax-evasion case against Swiss banking giant UBS. The former UBS employee turned whistle-blower exposed the previously hidden world of offshore tax shelters, which cheats the Treasury out of about $100 billion a year. Thanks to his insider information, UBS was fined $780 million, and it promised to "exit entirely" from the U.S. tax-shelter business and to provide the names of thousands of American tax dodgers, from which hundreds of millions of dollars still might be collected. It also led to new tax treaties with the Swiss that should provide unprecedented tax information in civil cases and better access to such data in criminal cases. Considering Birkenfeld's help, many observers wonder why the Justice Department decided to arrest and prosecute him. Many critics believe the decision to prosecute Birkenfeld, whom some consider the most important whistle-blower in years, sends the worst possible message to other financial-industry insiders who might be considering coming forward. The Government Accountability Project (GAP), a Washington watchdog organization that has extensive whistle-blower experience, says a chilling effect is already apparent: a senior executive at a European bank that offers similar U.S. tax shelters is having second thoughts about going public because of the Birkenfeld case.
Note: For lots more, including Obama's tight ties with UBS, see the New York Daily News article here.
The Treasury Department and the Federal Reserve lied to the American public last fall when they said that the first nine banks to receive government bailout funds were healthy, a government watchdog states in a new report released today. Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), says that despite multiple statements on Oct. 14 of last year that these nine banks were healthy and only receiving government funds for the good of the country's economy, federal officials knew otherwise. "Contemporaneous reports and officials' statements to SIGTARP during this audit indicate that there were concerns about the health of several of the nine institutions at that time and, as detailed in this report, that their overall selection was far more a result of the officials' belief in their importance to a system that was viewed as being vulnerable to collapse than concerns about their individual health and viability," Barofsky says. In announcing the initial $125 billion provided to these banks, former Treasury Secretary Hank Paulson on Oct. 14 said, "These are healthy institutions. As these healthy institutions increase their capital base, they will be able to increase their funding to U.S. consumers and businesses." That same day, the Treasury Department, the Federal Reserve and the FDIC also released a joint statement reiterating that "these healthy institutions are taking these steps to ... enhance the overall performance of the US economy." Barofsky finds, however, senior officials at the Treasury and the Fed had serious concerns about the health of some of these banks.
Note: For a comprehensive overview of the realities underlying the government's bailout of the biggest financial institutions, click here.
The head of the U.S. Federal Deposit Insurance Corp. said on Sunday that she wanted to end the "too big to fail" doctrine and shrink the shadow banking system that operates outside the reach of regulators. FDIC Chairman Sheila Bair ... said a U.S. proposal to create the authority to shut down failing systemically important financial firms may need to be extended to insurers and hedge funds. "We need to end 'too big to fail' and this needs to be an overarching policy that applies to everyone," Bair said. Bair said she believed that bank holding companies with subsidiaries that are shut down by regulators also should be made to pay the price of failure by being subject to the same wind-down process. "I believe that the new regime should apply to all bank holding companies that are more than just shells and their affiliates regardless or not whether they are considered to be systemic risks," she said, adding that including only systemically important firms in the shut-down regime could reinforce the 'too big to fail' doctrine. Financial firms subject to systemic risk shutdown authority should likely also be required to publish "living wills" -- details on how an orderly wind-down would play out -- on their websites to provide more clarity to shareholders and customers. And by applying the resolution authority more broadly outside of normal regulated bank holding companies, it would help shrink the shadow banking system by discouraging regulatory arbitrage under which financial firms shop for the most lenient supervisors. "If you tighten regulation of the banks even more without dealing with the shadow sector you could make the problem even worse," she said.
Note: For a comprehensive overview of the realities underlying the government's bailout of the biggest financial institutions, click here.
The Securities and Exchange Commissions independent watchdog called for a sweeping overhaul of the agencys investigation and enforcement practices on Tuesday, after a blistering report on the S.E.C.s failure to detect Bernard L. Madoffs extensive Ponzi scheme. Two reports, released by the S.E.C.s inspector general, H. David Kotz, recommended dozens of changes in the way the agency evaluates tips, trains investigators and documents examinations of securities firms. The first report, which covers the S.E.C.s inspections and examinations office, outlines 37 improvements that would revamp nearly every aspect of the divisions operations, including how investigators follow up on tips and creating step-by-step procedures in identifying potential violations of securities laws. Mr. Kotz also issued 21 recommendations to the S.E.C.s division of enforcement, including the start of a formal process for handling complaints and improving working relationships within the division. One measure would mandate that tips and complaints be reviewed by at least two individuals experienced in the subject before taking further action. The proposed changes come after Mr. Kotzs office completed an exhaustive investigation this month of the S.E.C.s failure to detect the Madoff fraud despite many warnings and a flood of complaints from credible sources. At nearly every turn, the investigation found, the agency had failed to properly examine Mr. Madoffs firm and had not adequately followed up on tips from as far back as 1992 that could have unearthed the estimated $65 billion scheme.
Note: For a treasure trove of key revelations on the realities behind the Wall Street crash and bailout, click here. Contact your political representatives urging them to support these recommendations.
The Federal Reserve Board has rejected a request by U.S. Treasury Secretary Timothy Geithner for a public review of the central banks structure and governance, three people familiar with the matter said. U.S. lawmakers have also called for a review of the Feds power and structure, saying Fed Chairman Ben S. Bernanke overstepped his authority as he bailed out creditors of Bear Stearns Cos. and American International Group Inc. while battling a crisis that led to $1.62 trillion in writedowns and losses at financial firms. While the report requested by the Treasury hasnt been formally scrapped, no work has been done on the project, which was due Oct. 1. Treasury spokesman Andrew Williams declined to comment, as did Fed spokeswoman Michelle Smith. Congressional leaders have balked at the notion of giving the Fed more power and are leaning toward vesting authority over capital, liquidity and risk-management practices of big banks in a council of regulators.
Note: To understand how business corrupts politicians watch the heated MSNBC News clip at this link.
Two weeks before his movie "Capitalism: A Love Story" opens nationwide, filmmaker Michael Moore swept through San Francisco ... with a rally, a Commonwealth Club appearance and an unlikely new antagonist: Democrats. When Moore criticized Sen. Chris Dodd, D-Conn., this week on NBC's "The Jay Leno Show" for getting "sweetheart loans" from a mortgage company he was charged with overseeing, Moore said he got a call from a top Democratic Party official telling him to "back off." But Moore, a longtime supporter of a single-payer health plan, didn't back off. In an interview with The Chronicle, he chided House Speaker Nancy Pelosi for not being aggressive enough in pushing health care reform and ripped President Obama's financial team as "the foxes guarding the henhouse." There is plenty of conservative-bashing in the film, which focuses on capitalism as the "evil" at the root of the financial crisis, but the film also refers to Democratic leaders as the "deliverymen" of the government bailouts for financially troubled Wall Street firms. In his new film, Moore focuses on the investment house Goldman Sachs as a main beneficiary of capitalism's largesse. He notes that Treasury Secretary Timothy Geithner and senior White House economic adviser Lawrence Summers are proteges of Robert Rubin, longtime Goldman executive and President Bill Clinton's Treasury secretary. "The fact that Geithner and Summers are part of this administration makes everything that happens open to question and needs our vigilance," Moore said, "because, literally now, the foxes are guarding the henhouse."
Note: For a review of Michael Moore's new film, "Capitalism: a Love Story," click here.
Nothing succeeds like failure, as the saying goes. And nowhere is this dismal truth more evident than in our financial regulatory system, one year after the bankruptcy filing of Lehman Brothers. Even though calamitous lending practices laid waste to the nations economy, surprisingly little has changed about how the financial arena operates and is supervised. Sure, a couple of venerable brokerage firms have vanished, but many of the same players remain on the scene, in the same positions of power. Senior regulators who stood idly by for years as financial firms built their houses of cards have been rewarded with even bigger jobs or are jockeying for increased responsibilities. The Federal Reserve Board, for example, wants to become the financial systems uber-regulator, even though its officials did nothing as banks made deadly decisions to lend recklessly and leverage themselves to the max. Awarding increased power to those who failed in their oversight duties flies in the face of all notions of accountability. Yet those in the public sector ask us to believe that regulators who snoozed during the credit bubble will be alert to emerging problems on their beats when the next mania begins. Thats asking a lot, isnt it? Heres a novel thought. Instead of creating more regulations to try to prevent this kind of mess from recurring, why not figure out how to hold regulators accountable when they perform as poorly as they did in recent years? Taxpayers must protect themselves against two things: the corrupting influence of bureaucratic self-interest among regulators and the political clout wielded by the large institutions they are supposed to police. [And] taxpayers must demand that the government publicize the costs of efforts taken to save the financial system from itself.
Note: For lots more from reliable sources on the realities of the Wall Street crash and bailout, click here.
Wall Street lives on. One year after the collapse of Lehman Brothers, the surprise is not how much has changed in the financial industry, but how little. Backstopped by huge federal guarantees, the biggest banks have restructured only around the edges. Employment in the industry has fallen just 8 percent since last September. Only a handful of big hedge funds have closed. Pay is already returning to precrash levels, topped by the 30,000 employees of Goldman Sachs, who are on track to earn an average of $700,000 this year. Nor are major pay cuts likely, according to a report last week from J.P. Morgan Securities. Executives at most big banks have kept their jobs. Financial stocks have soared since their winter lows. Banks still sell and trade unregulated derivatives, despite their role in last falls chaos. Radical changes like pay caps or restrictions on bank size face overwhelming resistance. Even minor changes, like requiring banks to disclose more about the derivatives they own, are far from certain. Regulators and lawmakers have spent most of the last year trying to save the financial industry, rather than transform it. In the short run, their efforts have succeeded. Citigroup and other wounded banks have avoided bankruptcy, and the economy has sidestepped a depression. But the same investors and economists who predicted, and in some cases profited from, the collapse last fall say the rescue has come at an extraordinary cost. They warn that if the industrys systemic risks are not addressed, they could cause an even bigger crisis in years, not decades. Next time, they say, the credit of the United States government may be at risk.
Note: For a treasure trove of reports from reliable sources on the realities of the Wall Street bailout, click here.
After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one. The bankers plan to buy life settlements, life insurance policies that ill and elderly people sell for cash $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to securitize these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die. The earlier the policyholder dies, the bigger the return though if people live longer than expected, investors could get poor returns or even lose money. Either way, Wall Street would profit by pocketing sizable fees for creating the bonds, reselling them and subsequently trading them. But some who have studied life settlements warn that insurers might have to raise premiums in the short term if they end up having to pay out more death claims than they had anticipated. In the aftermath of the financial meltdown, exotic investments dreamed up by Wall Street got much of the blame. It was not just subprime mortgage securities but an array of products ... that proved far riskier than anticipated. The debacle gave financial wizardry a bad name generally, but not on Wall Street. Even as Washington debates increased financial regulation, bankers are scurrying to concoct new products. In addition to securitizing life settlements, for example, some banks are repackaging their money-losing securities into higher-rated ones.
Note: As this article reveals, Wall Street will make a killing on these new securitized investments if American life expectancy should drop. Can you think of any ways in which powerful corporations could bring this about? Say an increase in sugar content or genetically modified components in foods? Perhaps lower standards for chemical toxicity? More time watching TV, or other changes leading to increased obesity? Swine flu vaccinations? For lots more from reliable sources on the realities of the Wall Street crash and bailout, click here.
Every week, the nations mightiest banks come to his court seeking to take the homes of New Yorkers who cannot pay their mortgages. And nearly as often, the judge says, they file foreclosure papers speckled with errors. He plucks out one motion and leafs through: a Deutsche Bank representative signed an affidavit claiming to be the vice president of two different banks. His office was in Kansas City, Mo., but the signature was notarized in Texas. And the bank did not even own the mortgage when it began to foreclose on the homeowner. Im a little guy in Brooklyn who doesnt belong to their country clubs, what can I tell you? he says, adding a shrug for punctuation. I wont accept their comedy of errors. The judge, Arthur M. Schack, 64, fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators and lawyers who file motions by the bale. He has tossed out 46 of the 102 foreclosure motions that have come before him in the last two years. And his often scathing decisions, peppered with allusions to the Croesus-like wealth of bank presidents, have attracted the respectful attention of judges and lawyers from Florida to Ohio to California. At recent judicial conferences in Chicago and Arizona, several panelists praised his rulings as a possible national model. Justice Schack, like a handful of state and federal judges, has taken a magnifying glass to the mortgage industry. Justice Schacks take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose. If you are going to take away someones house, everything should be legal and correct, he said. Im a strange guy I dont want to put a family on the street unless its legitimate.
As head of the Commodity Futures Trading Commission [CFTC], Brooksley Born became alarmed by the lack of oversight of the secretive, multitrillion-dollar over-the-counter derivatives market. Her attempts to regulate derivatives ran into fierce resistance from then-Fed Chairman Alan Greenspan, then-Treasury Secretary Robert Rubin and then-Deputy Treasury Secretary Larry Summers, who prevailed upon Congress to stop Born and limit future regulation. PBS: Let's start with September 2008 as we all sat there and watched the economy melting down. Born: It was like my worst nightmare coming true. I had had enormous concerns about the over-the-counter derivatives [OTC] market ... for a number of years. The market was totally opaque. Nobody really knew what was going on. And then it became obvious as Lehman Brothers failed, as AIG suddenly appeared to be on the brink of tremendous defaults and turned out [to have been a major derivatives] dealer. PBS: How did it happen? Born: It happened because there was no oversight of a very, very big, dynamic, growing market. I would never say derivatives should be banned or forbidden. The problem is that they can be extremely misused. Traditionally, government has had to protect the public interest by overseeing the marketplace and keeping the extreme behavior under some check. All other financial markets have some kind of government oversight protecting the public interest. [But] not this one. The over-the-counter derivatives dealers business ... was something like 40 percent of the profits of many of these big banks as recently as a couple of years ago. PBS: We're the losers. Who were the winners? Born: Our largest banks. It was short-term benefit for a few major institutions at the expense of all the people who have lost their jobs, who have lost their retirement savings, who have lost their homes.
Note: Don't miss this entire, astonishing interview with Born, who practiced derivatives law for 20 years before being appointed head of the CFTC. She lays bare the level of deceit, greed, and corruption by both bankers and some of the politicians who protect them.
When the credit crisis struck last year, federal regulators pumped tens of billions of dollars into the nation's leading financial institutions because the banks were so big that officials feared their failure would ruin the entire financial system. Today, the biggest of those banks are even bigger. The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit. J.P. Morgan Chase ... now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show. Concerns are twofold: that consumers will wind up with fewer choices for services and that big banks will assume they always have the government's backing if things go wrong. That presumed guarantee means large companies could return to the risky behavior that led to the crisis if they figure federal officials will clean up their mess. The worry for consumers is that the bailouts skewed the financial industry in favor of the big and powerful. Fresh data from the FDIC show that big banks have the ability to borrow more cheaply than their peers because creditors assume these large companies are not at risk of failing.
Note: For lots more from reliable sources on the realities of the Wall Street bailout, click here.
The U.S. Federal Reserve asked a federal judge not to enforce her order that it reveal the names of the banks that have participated in its emergency lending programs and the sums they received, saying such disclosure would threaten the companies and the economy. The central bank filed its request ... two days after Chief Judge Loretta Preska of the U.S. District Court in Manhattan ruled in favor of Bloomberg News, which had sought information under the federal Freedom of Information Act. Preska said the Fed failed to show that revealing the names would stigmatize the banks and result in "imminent competitive harm." Underlying this case and a similar one involving News Corp's Fox News Network is a question of how much the public has a right to know about how the government is bailing out a financial system in a crisis. The case arose when two Bloomberg reporters submitted FOIA requests about actions the Fed took to shore up the financial system in 2007 and early 2008, including an expansion of lending programs and the sale of Bear Stearns Cos to JPMorgan.
Note: Don't tax payers have a right to know to which bankds the trillions of tax dollars are going in the bank bailout? For lots more on government secrecy, click here.
Although hundreds of well-trained eyes are watching over the $700 billion that Congress last year decided to spend bailing out the nation's financial sector, it's still difficult to answer some of the most basic questions about where the money went. Despite a new oversight panel, a new special inspector general, the existing Government Accountability Office and eight other inspectors general, those charged with minding the store say they don't have all the weapons they need. Ten months into the Troubled Asset Relief Program, some members of Congress say that some oversight of bailout dollars has been so lacking that it's essentially worthless. "TARP has become a program in which taxpayers are not being told what most of the TARP recipients are doing with their money, have still not been told how much their substantial investments are worth, and will not be told the full details of how their money is being invested," a special inspector general over the program reported last month. The "very credibility" of the program is at stake, it said. The program was controversial from the start. Critics say it's unfairly rewarded the big banks and Wall Street firms that pushed the economy to the brink.
Note: For many revealing reports from reliable sources on the hidden realities of the Wall Street bailout, click here.
Thousands of top traders and bankers on Wall Street were awarded huge bonuses and pay packages last year, even as their employers were battered by the financial crisis. Nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008, according to a report released Thursday by Andrew M. Cuomo, the New York attorney general. At Goldman Sachs, for example, bonuses of more than $1 million went to 953 traders and bankers, and Morgan Stanley awarded seven-figure bonuses to 428 employees. Even at weaker banks like Citigroup and Bank of America, million-dollar awards were distributed to hundreds of workers. Mr. Cuomo, who for months has criticized the companies over pay, said the bonuses were particularly galling because the banks survived the crisis with the governments support. If the bank lost money, where do you get the money to pay the bonus? he said. All the banks named in the report declined to comment. Incentives that led to large bonuses on Wall Street are often cited as a cause of the financial crisis. Though it has been known for months that billions of dollars were spent on bonuses last year, it was unclear whether that money was spread widely or concentrated among a few workers. The report suggests that those roughly 5,000 people a small subset of the industry accounted for more than $5 billion in bonuses. At Goldman, just 200 people collectively were paid nearly $1 billion in total, and at Morgan Stanley, $577 million was shared by 101 people. All told, the bonus pools at the nine banks that received bailout money was $32.6 billion, while those banks lost $81 billion.
Note: How can this happen? Corruption abounds, yet the fact that you are reading this shows we can change it all. For lots more on the realities of the Wall Street bailout, click here.
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