Monday, November 19, 2007

A Job Well Done

Boy. Just think of what the bonuses would have been had they actually made money for the shareholders. Bloomberg (11.19.07):
"Shareholders in the securities industry are having their worst year since 2002, losing $74 billion of their equity.

That won't prevent Wall Street from paying record bonuses, totaling almost $38 billion."

Wall Street Plans $38 Billion of Bonuses as Shareholders Lose

"That money, split among about 186,000 workers at Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., equates to an average of $201,500 per person, according to data compiled by Bloomberg."

The bonus money came from "a record $9 billion of fees for arranging acquisitions and $5 billion for underwriting initial public offerings and sales of junk bonds, the most lucrative securities, Bloomberg data show. Bankers' record fees help explain why 2007 will prove to be the industry's second-most profitable after the subprime mortgage market collapse led to losses at Merrill and Bear Stearns."

And the outlook for next year? Considering all the Level 3 assets these guys are holding, probably not so good. Check this out, from Fortune:

Level 3 assets are assets "that trade so infrequently that there is virtually no reliable market price for them, and valuations for these assets are based on management assumptions." Which, we would hasten to add, doesn't mean they'd just make something up or anything.

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