I think I am beginning to understand economics.

Mundane Pointless Stuff I Must Share (MPSIMS)
#1

It’s good to see that US Treasury Secretary Henry Paulson, the former CEO of Goldman Sachs, met with some representatives of the avrerage working man to sort out the financial crisis.

The Wall Street Journal wrote:

“Expected to attend were banking executives including Ken Lewis, CEO of Bank of America; Jamie Dimon, CEO of JPMorgan Chase; Lloyd Blankfein, CEO of Goldman Sachs Group; John Mack, CEO of Morgan Stanley; and Robert P. Kelly, CEO of Bank of New York Mellon.”

This bunch of average Joes have done pretty well in the last few years, just like everyone else:

Paulson, whose former bank, Goldman Sachs, stands to benefit handsomely from the bailout amassed a personal fortune of $700 million while there.

Forbes says, Ken Lewis last year brought in a salary of $20.13 million, and his holdings of Bank of America stock are worth an estimated $112 million.

Jamie Dimon received a 2007 Christmas bonus of $14.5 million and holds $190 million in JPMorgan stock.

Lloyd Blankfein received a Christmas bonus of $68 million and his holdings of Goldman Sachs stock were worth $414.5 million last year.

Vikram Pandit received a $165 million signing bonus from Citigroup last year, together with a $2.7 million salary for a few months of work and $48 million in stock options.

John Mack received $41.8 million in compensation last year, and his 2007 holdings in Morgan Stanley stock were worth $220 million.

#2

Yep, I understand economics too - we work, rich people benefit. :rolleyes:

#3

I’m not sure what your point is. Is it so outrageous that the Treasury Secretary would meet with the leaders of major financial institutions to discuss the financial crisis?

What possible benefit would there be in talking to a Starbucks barista or a Walmart cashier or something?

#4

Enconomics?

What isnt that just supply and demand?

:stuck_out_tongue:

#5

I think that this sort of discussion would be far more meaningful if you were to actually examine the terms of this deal. Given the ongoing failure of the credit markets to operate, and as a taxpayer without any stock or interest in any of the companies mentioned, I’m happy to see this go through.

Essentially, in return for cash infusions from the Fed, the government gets preferred stock that acts more like a loan than equity in the company. As a result of accepting this Fed funding, there are serious restrictions on executive pay, golden parachutes, etc.

It never hurts to read the newspaper before posting.

"On Tuesday, Mr. Paulson said that in return for the investment, the government would receive preferred shares and warrants for common stock. In addition, he said, the government would expect a reasonable return.

And he said, “Institutions that sell shares to the government will accept restrictions on executive compensation, including a clawback provision and a ban on golden parachutes during the period that Treasury holds equity issued through this program.”

Under the plan, the government will receive an annual dividend of 5 percent for the first five years and 9 percent after that, the Treasury said. The government’s stake in the company would be non-voting."

#6

I think I’m…

Not.
Am I right in thinking Inflation = Prices go up, wages don’t. Recession = Prices go up, wages don’t?

Or is it just I work in a shitty company?