obama trying to limit pay of non tarp companies

#1
D

droski

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#1
The Obama administration has begun serious talks about how it can change compensation practices across the financial-services industry, including at companies that did not receive federal bailout money, according to people familiar with the matter.

U.S. Eyes Bank Pay Overhaul - WSJ.com

What gives the govt the right to regulate pay at private companies who haven't taken govt money!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

HOW IS THIS NOT SOCIALISM
 
#3
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I think the success/fail ratio of a company should be the lone regulator of pay rates.
 
#5
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utvolpj said:
69,498,215 votes by people who wanted change
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thats a lot of sheep.


the government has no right stepping in and messing with companies that have not taken their money. Its funny, this kind of thing is what cased us to fight for independence
 
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droski said:
The Obama administration has begun serious talks about how it can change compensation practices across the financial-services industry, including at companies that did not receive federal bailout money, according to people familiar with the matter.

U.S. Eyes Bank Pay Overhaul - WSJ.com

What gives the govt the right to regulate pay at private companies who haven't taken govt money!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

HOW IS THIS NOT SOCIALISM
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he's likely to use the FDIC program to try and shove this down everyone's throat.

It's likely to help a private deposit insurance industry spring up. Smart underwriters, like Buffet, can figure it out and administrate far better than the abysmally inept FDIC can.
 
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BigPapaVol said:
he's likely to use the FDIC program to try and shove this down everyone's throat.

It's likely to help a private deposit insurance industry spring up. Smart underwriters, like Buffet, can figure it out and administrate far better than the abysmally inept FDIC can.
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my guess is this is to try and stop people from paying back the tarp and poaching the companies who are still on the govt dime.
 
#11
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droski said:
my guess is this is to try and stop people from paying back the tarp and poaching the companies who are still on the govt dime.
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given Obama, I bet he believes this is the way to be and he wants it to be the rule.

We'll either have a private insurance fund arise or banks will be littered with hordes of incompetents who can't be fired, a la the FDIC.
 
#12
#12
Would it not be better to tie pay and incentives to quality instead of quantity of business...and long-term performance as opposed to short-term?

I'm honestly asking what the downside to that is.
 
#13
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rjd970 said:
Would it not be better to tie pay and incentives to quality instead of quantity of business...and long-term performance as opposed to short-term?

I'm honestly asking what the downside to that is.
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it's not the government's role to decide how and what people get paid. end of story. and do you have any faith that obama knows how to appropriately govern this? if i want to pay a my employee $1 mil a year to watch tv than i will. it's my friggin money. the shareholders of major corporations have the same right i would as a private employer.
 
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#14
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rjd970 said:
Would it not be better to tie pay and incentives to quality instead of quantity of business...and long-term performance as opposed to short-term?

I'm honestly asking what the downside to that is.
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the downside is that a bunch of government bureaucrats, who by and large have no entrepreneurial bone in their collective body, are trying to dictate to private enterprise how to run business.

I can't think of more than a couple of congresspeople who would know the first freaking thing about operating any sort of company. Obama is probably the furthest away from ever having any idea about profit vs. risk.
 
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droski said:
it's not the government's role to decide how and what people get paid. end of story. and do you have any faith that obama knows how to appropriately govern this?
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I don't understand. Do you think it is better to pay for quality and long-term products, as opposed to loads of unstable products to make a quick dollar?

And if that is the case, isn't this evidence that the market didn't appropriately govern this?

....and I'm not implying that government would do any better. Just trying to understand the reasoning.
 
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rjd970 said:
I don't understand. Do you think it is better to pay for quality and long-term products, as opposed to loads of unstable products to make a quick dollar?

And if that is the case, isn't this evidence that the market didn't appropriately govern this?
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how? The market is governing it today in a very big way. This is the primary means by which the garbage is taken out.
 
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rjd970 said:
I don't understand. Do you think it is better to pay for quality and long-term products, as opposed to loads of unstable products to make a quick dollar?

And if that is the case, isn't this evidence that the market didn't appropriately govern this?

....and I'm not implying that government would do any better. Just trying to understand the reasoning.
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Exactly, only government can run private business.

Better yet, we should give up our rights of marriage to let government define what it is for us!

Government is the only answer!

GOVERNMENT!
 
#18
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BigPapaVol said:
the downside is that a bunch of government bureaucrats, who by and large have no entrepreneurial bone in their collective body, are trying to dictate to private enterprise how to run business.

I can't think of more than a couple of congresspeople who would know the first freaking thing about operating any sort of company. Obama is probably the furthest away from ever having any idea about profit vs. risk.
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i love this theory that CEOs, whose pay is many times directly linked to the profitability of the company. and the shareholders, who make more money the more profitable the company is, are throwing around million $$$ salaries and bonuses like some redneck that just won the lottery.
 
#19
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BigPapaVol said:
how? The market is governing it today in a very big way. This is the primary means by which the garbage is taken out.
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But wasn't the MBS's part of this high risk, quick turnaround business? With the quantity and quality of loans being spread around, I can't imagine how anybody would view these as stable long-term investments. They were simply a way to make a lot of money really quick.
 
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rjd970 said:
But wasn't the MBS's part of this high risk, quick turnaround business? With the quantity and quality of loans being spread around, I can't imagine how anybody would view these as stable long-term investments. They were simply a way to make a lot of money really quick.
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the theory was if you have a big enough loan portfolio and enough tranches that the risk was properly allocated by teh tranches. this worked for 20 years before that. and they were pretty darn safe investments for many many years. as were the banks. as were 500 other things that crap out in a once in a lifetime event.
 
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rjd970 said:
But wasn't the MBS's part of this high risk, quick turnaround business? With the quantity and quality of loans being spread around, I can't imagine how anybody would view these as stable long-term investments. They were simply a way to make a lot of money really quick.
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I don't know about the high risk, quick turnaround business. I do know that even smart buyers put way too much credit in the unregulated insurance being provided via credit default swap. That allowed some atrocious underwriting to gradually become the standard and the market is now helping people understand the value of underwriting borrowers again.
 
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rjd970 said:
But wasn't the MBS's part of this high risk, quick turnaround business? With the quantity and quality of loans being spread around, I can't imagine how anybody would view these as stable long-term investments. They were simply a way to make a lot of money really quick.
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This is not the case. They were a way to provide enormous additional liquidity in the housing market and to allow investors a range of investment / return options even in the mortgage arena.
 
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droski said:
the theory was if you have a big enough loan portfolio and enough tranches that the risk was properly allocated by teh tranches. this worked for 20 years before that. and they were pretty darn safe investments for many many years. as were the banks. as were 500 other things that crap out in a once in a lifetime event.
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Well, I guess I would like to see how many of these portfolio's were disproportionately heavy on the high risk stuff and were sold with the short term profit in mind, with little to no regard for the long-term effects if that house of cards came crashing down. I would suspect it was not as rare as some want to suggest.
 
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rjd970 said:
Well, I guess I would like to see how many of these portfolio's were disproportionately heavy on the high risk stuff and were sold with the short term profit in mind, with little to no regard for the long-term effects if that house of cards came crashing down. I would suspect it was not as rare as some want to suggest.
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fine than ban mortgage back securities or sue the crap out of those people who sold them to their clients. don't screw with my friggin pay when i'm doing right by my client.

btw: what short term profit do you think you get on 30 year mortgages? please explain that logic to me.
 
#25
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BigPapaVol said:
This is not the case. They were a way to provide enormous additional liquidity in the housing market and to allow investors a range of investment / return options even in the mortgage arena.
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But generating that liquidity returned big bonuses for people, right? Are you saying the bonuses had nothing to do with shotty MBS portfolio's? You can't tell me nobody knew these things were extremely risky, even with hedging the riskier loans with good ones.
 
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