Huckleberry says "Highwaymen disguise selves as Bank Executives, loot vaults. Taxpayers on the hook."

“Highwaymen disguise selves as Bank Executives, loot vaults” .......sounds like a headline in one of our more boisterous print publications. But, after the release of a report by the Attorney General of New York on bank bonuses and losses at nine of the original recipients of government aid, one might think, “Quite an accurate notion my lad” Highwaymen in the executive office,,,,sounds as scary as Werewolves in London...

Before looking at Cuomo's report let's look back to the days of yore when banks were robbed by outsiders.....back to the days of the Great Depression

With the successful release of the movie Public Enemies, the Depression Era image of the “bank robber” as a folk hero has been the subject of discussion. Turner Classic Movies has played a raft of prison movies of late. In Public Enemies, Johnny Depp capturing John Dillinger’s charm and while one too many of the “good guys” turned out to be brutal thugs or egomaniacs……(hint: famous vacuum cleaner)

Another famous bank robber of the era was “Willie Sutton”.

Willie Sutton acquired two nicknames, "The Actor" and "Slick Willie," for his ingenuity in executing robberies in various disguises. Fond of expensive clothes, Sutton was described as being an immaculate dresser. Although he was a bank robber, Sutton had the reputation of a gentleman; in fact, people present at his robberies stated he was quite polite.

One victim said witnessing one of Sutton's robberies was like being at the movies, except the usher had a gun.

When asked why he robbed banks, Sutton simply replied, "Because that's where the money is."

Sutton was an accomplished bank robber. He usually carried a pistol or a Thompson submachine gun. "You can't rob a bank on charm and personality," he once observed.

In an interview in the Reader's Digest published shortly before his death, Sutton was asked if the guns that he used in robberies were loaded. He responded that he never carried a loaded gun because somebody might get hurt. He stole from the rich and kept it.
It is estimated that Willie Sutton stole perhaps $2 million in his career, and spent more than half his adult life in prison.

Had Willie and Dillinger lived today, they would be amazed that by being a “bank robber” you would get locked up or killed, but if you were part of the executive crew you could earn more in “bonus” money in a year than they earned in their entire lives…and some earn enough “bonus” money in a year to live the rest of their lives as royalty. Somehow if you substitute the term “protection money” for “bonuses” the picture becomes clearer even if the MO’s were different. Who needs a submachine gun when you have a loaded compensation committee....and bankers dress nice and have "city"
manners.....hmmm.. who learned from who.

In my last huckleberrying, I expressed consternation on the perverse effects of “greed” in American business. Especially as reflected in outrageous executive compensation, due to the corrosive effect such levels of compensation has on the fundamental social contract behind American“ capitalism”. In a bit of fortuitous timing that New York Attorney General Andrew M. Cuomo released a bank bonus report on July 30th aptly entitled

NO RHYME OR REASON:
The Heads I Win, Tails You Lose I Bank Bonus Culture

An analysis of the 2008 bonuses and earnings of six of the original nine TARP recipients illustrates the point that it appears there are “highwaymen” in the executive suite....making more in a year as out-of-control insider "bank robbers" than all of ther Depression Era bank robber put together.

How else to explain the giving of bonuses in the BILLIONS of dollars when the banks BILLIONS more in losses leaving the taxpayer to finance lending these banks well over $100 BILLION initially.

These are the same banks that are sucking the lifeblood out of cash-strapped, debt-laden consumers who make up a large part of the bank’s base and generate an even larger share of profits per capita through the banks “user-friendly” courtesy overdraft protection, through sorting banking transaction in the order to maximize overdraft and overlimit fees. Over forty-four percent of of all banks and credit unions have overdraft income greater than net income.

No gentlemen bandits here amongst the educated financial set, educated in “useless in formation”, to borrow a line from Mick Jagger in I Can't Get No Satisfaction,......ignorant of the true riches in life, MERE HIGHWAYMEN DISGUISED AS EXECUTIVES.

Hello, has anyone read anything beyond the next quarter’s earnings forecasts???? Is there nothing more to life than $$$$?? Even the simplest farmer knows you can force plants to grow quickly with fertilizer but the growth has no depth….Giant Redwoods grow slowly, but last forever. But, HIGHWAYMEN wouldn't know much more than what is in it for them around the next turn.

Excerpt from Cuomo Report-all losses, bonuses and aid are for 2008.

$B = Billion Dollars

Two firms
Citigroup-LOSS- $27B; BONUSES-$5.33B
Merrill Lynch-LOSS- $27B; BONUSES-$3.6B
Totals LOSSES-$54B; BONUSES-$9B
GOVT AID $55B


Three Firms

Goldman Sachs, LOSS-$2.3B; BONUSES-$4.B
Morgan Stanley LOSS-$1.7B; BONUSES-$4.5B
JP.MorganChase LOSS-$5.6B; BONUSES-$8.7B
Totals LOSS-$9.6B; BONUSES-$18B
GOVT AID $45B

Bank of America had 172 employees that received at a bonus of at least $1 million each.

The breakdown of these bonuses is interesting and similar to most of the other banks in the study......

The top four recipients received a combined $64.01 million.

The next four bonus recipients received a combined $36.85 million.

The next six bonus recipients received a combined $31.39 million.

Four individuals received bonuses of $10 million or more and combined they received
$64.01 million.

Eight individuals received bonuses of $8 million or more.

The Cuomo report noted:

"[L]arge payouts became a cultural expectation at banks and a source of competition among the firms. ….Clearly, the compensation structures in the boom years did not account for long-term risk, and huge paydays continued while the firm faced extinction."

The Cuomo report also noted:

“…. one thing is clear from this investigation to date: there is no clear rhyme or reason to the way banks compensate and reward their employees. compensation for bank employees has become unmoored from the banks' financial performance.

• when the banks did well, their employees were paid well.
• when banks did poorly, their employees were paid well.
• when the banks did very poorly, they were bailed out by
taxpayers and their employees were still paid well.

Bonuses and overall compensation did not vary significantly as profits diminished. Indeed, our investigation suggests a disconnect between compensation and bank performance that resulted in a "heads I win, tails you lose" bonus system. In other words, bank compensation structures lacked consistent principles and tended to result in a compensation system that was all "upside."

Like the iceberg that struck the Titanic, the executive compensation problem in the banking industry is just the tip of the problem.....Indsustry leaders and executives need to look at the Man in the Mirror and change.....give aid to the poor and defenseless...don't heap more than is humanly needed into your pockets just because you can.....folks if most Americans earned a Million Dollars in a year they would be set for life....put it in perspective huck says.

In 2006, only the income level of the top 5% earned over $174,000. The median income in 2006 was only about $58,000...The mdeian is the point where 1/2 the people earn more than that and half earn less.

and, that's the world tonite.