Wall Street will never learn

This is why we have to cut off the source of the problem before we can fix the economy. The problem lies with the people in control of Wall Street firms and the banks. They will never learn and we are doomed to repeat history.

Sam Stein of Huffington Post reported on bailed out firms, Morgan Stanley and Smith Barney,  giving out “retention payments” to their financial adviser. It’s basically bonuses but for PR purposes, they want to call it “retention payments.”  Estimates of these packages are around 2-3 Billion dollars. Let us not forget that these two firms got a combined amount of over 60 BILLION dollars from the government bail out fund.

The soon-to-be-merged financial giants — Morgan Stanley and Citigroup’s Smith Barney — announced the payments during an internal conference call last week, but warned advisers against describing them in terms that would cause PR headaches.

“There will be a retention award. Please do not call it a bonus,” said James Gorman, co-president of Morgan Stanley. “It is not a bonus. It is an award. And it recognizes the importance of keeping our team in place as we go through this integration.”

“I think I can hear you clapping from here in New York,” Gorman joked during the call, after announcing that the payments would be linked to ’08 performance. “You should be clapping because frankly that is a very generous and thoughtful decision that we have made. We spent a lot of time kicking this around. We could easily have done it from the point of closing, which is obviously going to be somewhere in the latter half of this year or around the middle of the year. But we just decided… that it was right thing to do, to give you that certainty that it would be based off ’08. ’09 is a very difficult year… So that degree of anxiety, which many, many of you have emailed me about… is now off the table.”

This is ridiculous. Tell Wall Street people to walk around in other people’s shoes and see how many average Americans that have a job still are getting bonuses disguised as “retention payments.” Also, why bother with “retention bonuses”. If these financial advisers are so displeased with the money they are making, let them go and try to find another job in this market. I am sure there are plenty of top talents out there just waiting for an opportunity to get in the doors with these two companies. Retention payments are just BS now and if you are going to give out bonuses, base it on the overall performance, not just a selected point in time. Using tax payer money to pay out these stupid payments is not the right thing to do. These financial advisers should be anxious about having a job, not the amount of bonus they are getting.

“These firms are attempting to continue to pay their people the way they have in the past and in the current job market here in New York, I don’t think it is necessary,” said Christopher Whalen of Institutional Risk Analytics. “You certainly don’t need to pay people to stay in their jobs right now, because they are praying to Jesus that they just don’t lose their job generally.”

Another example of how these cancers sitting in their posh offices just don’t get it and continue to play the American people as fools. To cure our economy, these cancers must be removed.