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Forum Post: Learning Point: Executive Compensation Is Paid By Shareholders, Not You.

Posted 2 years ago on April 14, 2012, 5:29 p.m. EST by Delouser (-54)
This content is user submitted and not an official statement

OWSers get their panties in a bunch over executive compensation. But how many of the hippie class owns stock in the first place? Why are they so fixated that shareholders are over-paying? Do they think they need looking after or are they just too stupid to know it isn't their money?

Executive compensation savings go to shareholders, not you. Although it comes as shock, it's an important learning point.

108 Comments

108 Comments


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[-] 8 points by gestopomillyy (1695) 2 years ago

wierd then that companies needed tax payers money for bailouts why didnt they take that money from shareholders?

[-] -2 points by monetarist (40) 2 years ago

In fact, which companies were bailed out? Other than banks, a few auto manufacturers, no one else was bailed out.

[-] 3 points by gestopomillyy (1695) 2 years ago

i dont see how that matters.. if your premise is true.. then there should have been plenty of money from shareholders. all companies operate the same. if that 'extra' money comes from shareholders.. then there should have been no need for any company anywhere at anytime to need money from welfare. because there are shareholders! are you saying that the shareholders got that welfare money?? if there was 'extra money' where did it come from? and why wasnt it put back into operations instead of handed out to individuals that didnt need it anyway? i understand that if the company has profit.. the profit is given to execs as bonuses.( a symptom of excessive greed.) but if the company has no money.. gets welfare to pay payroll and expenses. where did the extra money come from?

[-] -3 points by Delouser (-54) 2 years ago

What proportion of companies in the United States do you suppose were "bailed out"?

[-] 5 points by gestopomillyy (1695) 2 years ago

what does that matter? the ones that we did bail out.. meaning loser idiots in charge btw. they still got bonuses. if they had money from stockholders why did they need tax money

[-] -2 points by Delouser (-54) 2 years ago

Was every dollar spent the taxpayer dollar? It's the reason why borrowing money from a dumb uncle is a bad idea. You borrow a dollar and the next $1,000 you spend is his dollar, according to him, even after he's repaid. The bailout purchased stakes in all the bailed out companies. It raised capital at a cost to shareholders.

What share of companies do you suppose were "bailed out"?

[-] 2 points by shadz66 (19985) 2 years ago

"Banks, Banksters & Banksterism" are the points of contention - not 'companies' !!!

As such and though this list is far from complete or comprehensive, please peruse this link :

Finally, I sincerely recommend that you watch the following award winning documentary film in order to acquaint yourself with some of what 'OWS' and this forum are all about !

fiat lux et fiat justitia ruat caelum ...

[-] 1 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

You always provide good stuff.

[-] 2 points by shadz66 (19985) 2 years ago

Thanx mate & thus further in the same vein : http://topdocumentaryfilms.com/category/economics/ .

pax et lux .

[-] 3 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

Again - you are a teacher a provider of good food for thoughtful consideration - am very glad you are here and fighting against corruption and the ignorance which allows it to continue.

[-] 1 points by shadz66 (19985) 2 years ago

Thank you and further I feel quite humbled by your kind and gracious words as both of my parents at different times in their lives, taught.

Perhaps the most sincere advise and pointer one can give to others is that which one does oneself and in this spirit and in memory of my beloved Dad (Requiscat In Pace) who passed away from "this veil of tears" and left "this mortal coil" on April 11th 2011 - I append the following link, because I try to watch every episode : http://rt.com/programs/keiser-report/ .

pax, amor et lux ...

[-] 2 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

Thank you, you were fortunate to grow-up with good/great roll models. You are a credit to their beliefs. Nothing is more important than the sharing of knowledge and the fostering of ability in others.

We are fortunate to have you participate and share your talent.

[-] 1 points by shadz66 (19985) 2 years ago

Mate, you've left me with extremely blurry vision & thus as I'm listening to it just now : http://www.youtube.com/watch?v=INKcxrmL61M&feature=related ~{:-)

amor vincit omnia ...

[-] 2 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

Thank you for including me. I hope the blurred vision is affirming and a welcome release. Now I just need to regain sound on my PC so I can appreciate your gift.

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[-] -2 points by monetarist (40) 2 years ago

The so called bailout money has been paid back with a total interest of around $49 bn. There is no taxpayer money in those banks now. So keep quiet.

[-] 3 points by shadz66 (19985) 2 years ago

"So called"?!!! Well what would you "call" it then ?!! What would be your euphemism for those 'absolutely astronomic amounts' of money mysteriously and magically conjured up in 20008 ?!

Further, you say "paid back with a total interest of around $49 bn. There is no taxpayer money in those banks now." REALLY?!!! Have you any corroboration for that ?!! Where's your evidence for this canard ?!

'Enlightenup' and tell us what ever happened to "Government OF The People ; BY The People ; FOR The People" & the concept of "Democracy" ?!!!

Where does all this "money" stuff come from ?!!

Who issues & decides how much of it there is ?!

What say you Austrian-Supply-Side-monetarist ?

ad iudicium ...

[-] -2 points by monetarist (40) 2 years ago

Have you been living under a rock? The TARP has long been paid back. Here's one http://online.wsj.com/article/SB10001424052748704261504576205142438418336.html

If you were of a higher intellectual caliber I would have provided you links to GAO reports relayed to the same. I hope the above link is not too much for you to comprehend

[-] 3 points by shadz66 (19985) 2 years ago

You are a specious dissembler. There was Much More to the 2008 Bailouts than "The TARP" - and if you are half as aware as you make out to be, then you must know this already.

Furthermore, The WSJ is the house propaganda rag to The 0.01% Kleptocrats and associated Parasitic Plutocrats, so you'd have been slightly better with the relevant GAO reports.

IF for reasons of ignorance, prejudice or tendentious propaganda, you do not already know the following - then read, reflect and realise, via (inter alia) : http://www.americanthinker.com/2011/08/that_federal_bank_bailout_in_2008_was_bigger_than_we_knew_a_lot_bigger.html

Finally, others will note your abject failure to engage with the fundamentally simple yet very relevant questions that I addressed to you.

veritas vos liberabit ...

[-] -1 points by monetarist (40) 2 years ago

You should read this one line from your own link "U.S. taxpayers, it should be noted, lost nothing on the secret Fed loans. Instead, according to Bloomberg, the Fed made money".

For more, you could look at GAO reports.

te sunt asinum...

[-] 2 points by shadz66 (19985) 2 years ago

Re. the 2008 Bailouts - of course you wish to take the narrowest possible view, ignoring public monies also given to for example GM, AIG and to Non-US Foreign Banks and you cherry pick the one line that suits your 'received wisdom' thesis without addressing the main point.

Though The Treasury likes to gloat about TARP funds having been paid back by the big banks, the banks have received a back-door bailout, of almost exactly the same size, that will never be paid back. Almost no one talks about it, and no one in government is even keeping track of it.

Out of the explicitly declared total $700B TARP bailout, approximately $205B were disbursed to the US banks through the Capital Purchase Program. Of that $205B, most has actually been paid back.

However, one of the dirty secrets of the bailout though, is that Treasury and the Federal Reserve found a way to give the banks money without any approval or oversight from Congress or anyone else.

By keeping short-term interest rates close to zero for the last 3.5 years, the Fed has enabled the banks to drastically reduce their interest expense on deposits, thereby inflating bank earnings by tens of billions of dollars each of the past two years. There's nothing wrong with banks earning a profit, but the banks' reduced interest expense comes right out of your pocket. The less you earn on your savings account or CD's, the more money the banks make & it's all because of this deliberate gift from the Fed.

There is approximately $8.0T in interest-bearing deposits in US banks. This figure is little changed from year-end 2008, when US banks held approximately $7.6T in deposits. In other words, there are slightly more deposits being held now than three years ago just after the crisis hit, but the total amount of interest banks have paid on deposits has changed dramatically over the past three years.

With dramatically lower rates on roughly the same amount of interest-bearing deposits, banks have been able to reduce their expenses by over $165B. Savers and depositors have been deprived, as a matter of policy, of over $165B in interest, which has gone instead to subsidize the profits at the big banks and the bonuses of the executives who run them. $165B amounts to over $500 for every man, woman and child in America, or over $900 for each and every taxpayer and each of their children.

Taxpayers may have read in the (Corporate Owned) MSM headlines that the big banks have paid back all the bailout money, but the money being paid back is coming right out of their own pockets.

Perhaps we should go back to basics : "Bank Bailouts Explained" : http://www.youtube.com/watch?v=yipV_pK6HXw ... and I double dare you to still your mind ; swallow your prejudices ; switch off your pre-programmed propaganda and reflect on this somewhat humourous video for 7 short minutes.

Finally, have you seen the documentary film, "Inside Job" : http://documentarystorm.com/inside-job/ ?

temet nosce ...

[-] 3 points by shadz66 (19985) 2 years ago

Or read - "Bank of America : Too Crooked to Fail" ; http://www.rollingstone.com/politics/news/bank-of-america-too-crooked-to-fail-20120314 ? The bank has defrauded everyone from investors and insurers to homeowners and the unemployed. So why does the government keep bailing it out ? By Matt Taibbi.

fiat justitia ruat caelum ...

[-] 3 points by shadz66 (19985) 2 years ago

Also see this short video : "The True Cost of the Bank Bailout" :

We all know about TARP, the Troubled Asset Relief Program, which spent $700 billion in taxpayers’ money to bail out banks after the financial crisis. That money was scrutinized by Congress and the media.

But it turns out that that $700 billion is just a small part of a much larger pool of money that has gone into propping up our nation’s financial system. And most of that taxpayer money hasn’t had much public scrutiny at all.

According to a team at Bloomberg News, at one point last year the U.S. had lent, spent or guaranteed as much as $12.8 trillion to rescue the economy. The Bloomberg reporters have been following that money. Alison Stewart spoke with one, Bob Ivry, to talk about the true cost to the taxpayer of the Wall Street bailout."

fiat lux ...

[-] -2 points by monetarist (40) 2 years ago

I have watched Inside Job and it takes a very one sided view of the whole situation. Iceland is not the first country to open up it's economy and markets but it has been a drastic failure. Why? Because the regulators there were not doing there job. This is of course a very simplistic view and sure speculation played a huge part but the documentary puts the blame squarely at the banks. That's not right.

As for you tirade on reducing interest payments, that happens at the time based on repo and reverse repo rates. Also investment banks like GS or MS or any other make a bulk of their money on trading and M&A deals and not from retail lending. So their bonuses aren't really coming from public money as you would like to believe.

However, I give you credit for one thing. You at least brought some data to the table instead of the regular "profits are bad.,..bankers are evil" shit

[-] 2 points by shadz66 (19985) 2 years ago

Well we sure have made progress from your "So keep quite", 5 days ago and your "'te sunt asinum' yesterday & though your view that 'Inside Job' ( http://documentarystorm.com/inside-job/ ) takes "a very one sided view" seems "a very one sided view" to me, we'll move onwards and upwards.

"Regulatory Capture" WAS a problem in Iceland AND IS (and has been) a Very Serious Problem in the 'USUK High Finance Kaputalism Model' and please reflect that the 'poachers are now gamekeepers' and also that that 'the foxes are in the chicken coop' !!!

Your defence of Goldman Sachs & Morgan Stanley is cute and puppy dog loyal and your faith in their 'Trading and Mergers & Aquisitions' acumen is touching but you really need to read that Matt Taibbi article above IF you are not getting that Fraud Is The Business Model Of Choice for The Banksters !!

I persist with the basics from my first reply to you above :

  • "Where does all this "money" stuff come from ?!!"

  • "Who issues & decides how much of it there is?!"

As well as continuing to recommend that you watch the following short 'many a truth in jest', 7 minute video : "Bank Bailouts Explained" ; http://www.youtube.com/watch?v=yipV_pK6HXw ... because I'm convinced that there are some important issues that you are either not getting or wilfully ignoring !

A clue on where I'll come from in my next reply - ever heard of 'MF Global &/or John Corzine' ?!

ad iudicium ...

[-] 1 points by monetarist (40) 2 years ago

Quite frankly, your thesis is a mere statement and one that I don't agree with. Have got quite a few friends in banking and I don't think they are frauds.

As for you pie chart, it actually ignores a lot of other budgetary allocations. Once you take those into account, military spending comes down to around 20% (see the smaller graph titled "The govt deception"). I take the smaller graph as truer picture. The larger graph has been touted too often by leftist groups, and only by leftist groups. As someone with a more neutral stance, I do not agree to them.

As for the other pdf, I will check it out sometime and give you my comments.

[-] 1 points by monetarist (40) 2 years ago

Yes I know about the whole MF Global thing, who doesn't. And may be someday we can share a beer too though I would prefer Vodka

[-] 1 points by shadz66 (19985) 2 years ago

Well IF you truly know "about the whole MF Global 'thing'" then you will have some insight into my "Fraud Is The Business Model Of Choice for The Banksters" & 'Regulatory Capture' theses.

Furthermore, as an intelligent person, probably being paid the going rate for an honest days work - perhaps you'll appreciate the following which I bring to your attention :

Nostrovya with the 'Stolichnaya' ; Happy to get 'Jolly with the Stolly' !!!

verbum satis sapienti ...

[-] 1 points by monetarist (40) 2 years ago

Would read the Matt Tiabi article in sometime. Kinda held up now on some stuff. But Matt is kind of a leftist. Sure he makes good points and comes up with good data but he is often unable to control himself from going overboard. But we need people like him to create a balance.

As for those Money as Debt videos, they are IMHO (and somewhat educated opinion) factually incorrect at many places. More importantly, I cannot put my faith on a mere video, more so when I am not sure of the credentials of the creator of the said video. The task becomes even more difficult when you realize that, as against papers in Econ journals, youtube videos aren't peer reviewed.

[-] 3 points by shadz66 (19985) 2 years ago

OK m8 ! You are underneath all the 'monetarism' - a good and fair minded person I feel (as evidenced by "we need people like him to create a balance") and I'm not arguing with your "peer reviewed" argument tho' I don't accept that one can't bring one's owns wits, reasoning and intuitions to bear on a given matter without recourse to academic journals etc. Please consider - that there is more to knowledge than academia and more to wisdom than 'intelligence' ...

I'll nail my colours to the mast mr. 'm', as being a Libertarian-Socialist, given to notions of a fair and true Meritocracy and as being a Militant for Democracy. However, I do feel that we could share a good chat and come to shared conclusions over a good 'bbq and a few beers'.

Now, I will mention "MF Global and John Corzine" - though I will leave the matter at just that - unless prodded further ;-)

Stay well and open minded - and just maybe your very presence here on this forum is testament to that.

~{~

pax et lux ...

[-] 2 points by shadz66 (19985) 2 years ago

Also 'fyi', "Guns and Butter" ( http://www.kpfa.org/guns-and-butter ) is an excellent (imho) one hour radio show on San Francisco based 'KPFA' ( http://www.kpfa.org/ ).

A recent excellent show with Prof. William K. Black ( http://en.wikipedia.org/wiki/William_K._Black and http://law.umkc.edu/faculty-staff/people/black-william.asp ) was very much concerned with the subject matter of my comments on this thread. Prof. Black was a prime mover in the hundreds of prosecutions after the collapse and exposure of the 'Savings and Loans' criminal and fraudulent 'Ponzi'-fiasco of the 1990's. Contrast that with the abject failure to prosecute any criminal malfeasance after 2008 and right up to the present (case in point MFG!). As such :

  • "Formula For Fraud" with William K. Black - from the first Italian economic Summit on Modern Money Theory in Rimini, Italy. How to become a billionaire - the four necessary ingredients in the recipe for fraud ; the three sure consequences of banking control fraud ; gutting of the underwriting process ; Gresham's Law ; The Business Roundtable ; hyperinflation of a bubble." : http://www.kpfa.org/archive/id/79331 .

Finally, I can't recommend "Guns and Butter" with Bonnie Faulkner highly enough.

~*~

fiat justitia ruat caelum ...

[-] 1 points by monetarist (40) 2 years ago

Answers to your questions:

  1. Where does money come from? Money is a means of exchange. It does not need to 'come from' anywhere. For more about how money has evolved I would suggest you read "The ascent of money". Fascinating book.

  2. Who decided how much of it is there? Again that's not important. If you have more money in the economy, there will be higher inflation and prices will rocket. If money supply doubles in a day, what cost $1 a day before would (theoritically ceteris paribus ) cost $2 the next day. As to who decides, how much money should be in circulation? In an open economy, nobody can really decide. The central banks can sure take measures to control money supply but they too can 'decide' exactly how much money should be in circulation.

[-] 1 points by shadz66 (19985) 2 years ago

I appreciate your honest attempt at an answer but seriously question how those questions can be answered without some mention and recourse to "Fractional Reserve Lending", though you do at least mention 'Central Banks' in your reply. Thus I append the following for your quite and considered later reflection :

As this 'forum-post' is entitled "Learning point", for your and others' consideration, here I also append :

Also please reflect that the regular and ritualised expansion and contraction of credit euphemistically termed *'The Business Cycle' is NOT a 'Law of Nature' like Gravity being responsible for the tides etc. but is an utterly artificial construct 'designed' by a very small group of people purely for their own benefit.

I am still sincerely recommending that Matt Taibbi article ("Bank of America : Too Crooked to Fail" ; http://www.rollingstone.com/politics/news/bank-of-america-too-crooked-to-fail-20120314 ) and despite what I said in my previous comment, I won't spoil our exchange here with mention of 'MF Global &/or John Corzine', as we are getting along so well :-)

fiat lux ...

[-] 1 points by gestopomillyy (1695) 2 years ago

yes thats how welfare works. when you get welfare from the government,, (ask anyone on welfare).. they track every penny you spend. if you buy something that is more than what they gave you.. then you have defrauded the taxpayer. so you are saying it is ok.. for the corporations to (scince there arnt so many) to commit welfare fraud.. and everyone is suppose to say oh thats ok.. that exec, living in that shoddy mansion, driving that broke down beemer, eating that canned lobster, they really needed that help. can you see how twisted that logic is.

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[-] 4 points by geo (2638) from Concord, NC 2 years ago

The Financial Industry which was responsible for 45% of the GDP for this country.

[+] -6 points by Delouser (-54) 2 years ago

No, it wasn't.

What share of companies were bailed out? You made the point. You're looking for the rationalization.

Shareholders appreciate your concern, they really do.

[-] 3 points by geo (2638) from Concord, NC 2 years ago

Now we are going to rewrite history? The Financial Industry wasn't bailed out....LOL.

The Government doesn't own 85% of AIG? Goldman Sachs, JP Morgan, BoA never got cash?

[+] -7 points by Delouser (-54) 2 years ago

http://www.federalreserve.gov/bankinforeg/tarpinfo.htm

At least try to understand some things. The "Industry" wasn't bailed out, but some institutions were. Overall, the taxpayer made a profit except for bailing out itself (Fannie Mae and Freddie Mac), AIG (still pending), Chrysler (gone) and GM (still pending). Specifically, Goldman Sachs, JP Morgan, Wells Fargo, and Morgan Stanley were all money makers for taxpayers. You, of course, also would have no idea that some companies were forced to take it.

But you still don't own shares. So, walking around with a little sign bitching about executive compensation is just a kind gesture of support that shareholders are over-paying.

[-] 3 points by JadedGem (895) 2 years ago

I'd love a look at your portfolio. I'm betting you don't own much stock either. You think your a big wheel and to the .001% your a sheeple that they are planning to shear in the next little dip on Wall Street. You probably are over-payed, that's why you are deluded enough to think it matters to them that you are still on their side on the forums. Wells Fargo got money from the government in the form of subsidies, more than they paid in taxes. If you listed them as some big tax generator your facts need checking all the way around.

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[-] 2 points by geo (2638) from Concord, NC 2 years ago

One of those are you.....

Latest audit of the Federal Reserve shows $16 Trillion still not paid... http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

[+] -4 points by Delouser (-54) 2 years ago

Bernie Sanders. At least try to come up with something credible.

[-] 2 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

Bust his credibility if you can SFB. Bring in real proofs from respected sources. Oh but you won't - Because you can't - All you can do is spew shit and hope no one notices - Guess what? - You failed from the start.

[-] 1 points by geo (2638) from Concord, NC 2 years ago

Since when is the GAO not a respected source?

[-] 2 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

How exactly does that bust Bernie Sanders? You may be confused as my comment was to the Louser.

[-] 1 points by geo (2638) from Concord, NC 2 years ago

My fault... misunderstood.

[-] 1 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

Not a problem - these threads can get a little confusing - my fault too as I try to direct my comments because of the possibility for confusion and I did not this time.

[-] 2 points by geo (2638) from Concord, NC 2 years ago

The GAO did the audit, not sanders... maybe you should learn to read. Here is the actual audit:

http://www.sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf

[+] -4 points by Delouser (-54) 2 years ago

At least read your own links. Were you just not interested in seeing how the programs have been closed out?

Shareholders appreciate your concern, they really do. If you have other cost savings ideas for them, I'm sure they'd love to hear the. LOL.

[-] 3 points by geo (2638) from Concord, NC 2 years ago

I was really interested in how we 'loaned' money to foreign banks, corporations, and governments through the Fed Resv.

When were we the Tax Payers ever going to learn about this? Don't you think $16 Trillion dollars through the Fed alone is just a tad inflationary when every fiscal conservative is crying about $1 trillion dollar Fed Budget?

When is the globalism going to end? It's a failed model. We have no reason to bail out foreign banks and corporations.

[+] -4 points by Delouser (-54) 2 years ago

It isn't a "failed model". The system had too much leverage and when the down-turn came, it risked a major collapse. That degree of collapse has so far been averted.

But we don't have inflation. Huge amounts of money are simply held at the Fed as excess reserves and the velocity of money fell so sharply that even the large expansion in the monetary base didn't spur inflation. It merely kept us even rather and helped avoid a major deflation.

[-] 3 points by geo (2638) from Concord, NC 2 years ago

We don't have inflation because cash is being hoarded. The cash that is out there is being invested in commodities because the interest rates are tiny. So we are creating bubble after bubble after bubble....

If you take into consideration the rise in prices in commodities one can say that inflation is taking place.... but the government took that metric out recently now didn't they.

Dealing with our system is like dealing with Microsoft Operating System, you have to expect it to crash periodically... who accepts systems that are expected to break? Fools.

[-] 3 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

Very few - only the largest and also the most corrupt of the financial monsters. Amazing what kind of trouble too big to fail can cause in such numerically small numbers of associated groups/monopolies/syndicates.

Say - BTW - love your user/abuser name. Funny how you guys pick things that you need to do. So you have come to the right place if you are serious about getting Deloused. 1st step is your admitting there is a problem.

Folks - be sure to help out this lost one.

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[-] 2 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

Fraud then in your opinion is just good business?

Also you have not - to my knowledge or anyone Else's I would gather from their comments to you - provided any facts. You have only so far exhibited blind marching support for greed and corruption.

If you think I'm dumb - take a look at your work then look in the mirror and be truly disgusted.

[-] -3 points by Delouser (-54) 2 years ago

Default doesn't make something yours. Greed? Sure, that doesn't apply to someone that bought something they couldn't afford, but bought anyways with excessive debt. Same goes, of course, for people that borrowed themselves in a hole for all the other stuff they had to have.

You're old, have you lived your life this stupidly? Are you still baffled by concepts like debt creating vulnerability or do you run up the debts and then blame the bank for why you went down in flames 4 weeks into unemployment? And if you're not baffled, then you know better than the idiocy you type.

I can't imagine the defective lessons you pass on.

[-] 2 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

Tell me something DeMouser - What happened to all of that bail-out money?

Should that not have pressed a financial reset? Should not the financial institutions have been able to renegotiate in good faith to preserve as many functioning mortgages as possible?

What Happened There???????? As far as I can tell no one was helped outside of say the auto-workers or the owners of the failing institutions and their shareholders who still received nice big fat bonuses too - for failure.

Huh. You have an odd way of looking at things to say the very least.

[-] -3 points by Delouser (-54) 2 years ago

Most of it was paid back. The biggest amounts not paid back are from Fannie Mae, Freddie Mac, AIG, and GM (2 of which were government bailing out government and 1 of which was political).

You lack an understanding, big surprise, of the difference between solvency and liquidity. "Bail-outs" can fix liquidity problems, but not solvency problems. A liquidity problem is that you're good for it, just not until next week. Solvency is that you're not good for it, ever.

Simply writing off mortgages is a solvency bailout. That's gone forever. We simply can't afford to underwrite a national put option on real estate. So, the process is what it is. You have a right to default, but then default is a process with consequences.

Again, shareholders appreciate your concern.

[-] 1 points by DKAtoday (28248) from Coon Rapids, MN 2 years ago

I see that you choose to misunderstand - quite all-right - I understand that you are fighting a losing battle.

The thing is the money went out and did - What exactly? I mean besides providing bonuses in a timely manner. The only really visible benefit and good use was exhibited by the auto industry.

Besides smoke mirrors and bonuses what did the financial markets do with their bailout money?

The auto industry did not collapse and a lot of workers kept their jobs - but a lot of people did get collapsed by the financial market. So exactly what good did the financial institutions bailout accomplish?

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[-] 3 points by shoozTroll (17632) 2 years ago

What's it to ya'?

You writing a book?

[-] 1 points by shadz66 (19985) 2 years ago

@ Delouser : Thanx for this thread. Never did get around to saying so. pax et lux ...

[-] 7 points by shoozTroll (17632) 2 years ago

EXTRA special learning point!!!!!

WE pay the lazy ass shareholders too!!!!!

[-] 10 points by gnomunny (6638) from St Louis, MO 2 years ago

Shareholders? You mean those guys that put in a little money, take out a lot of money, but don't actually produce anything? Those shareholders?

[-] 4 points by shoozTroll (17632) 2 years ago

Yepperz, those are the ones all right.

They toss a crumb in yer IRA, but take the loins share for themselves.

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[-] -2 points by monetarist (40) 2 years ago

Yes those shareholders. And in case you don't know, you need money to run a business. Production is a combination of labor and capital. And while shareholders do make money, they also lose money. The take a financial risk when they invest and hence the returns.

[-] 2 points by geo (2638) from Concord, NC 2 years ago

The term Shareholders doesn't have the same connotation that it used to have. Shareholders used to be investors who held stock for the long term making their money on dividends when company profits rose. They had a vested interest in a company's long term viability.

Today, in our flash trading environment.. shareholders are for the most part people who are short term stock holders who flip stock for profit, very few are long term holders who rely on dividends. This is one of the main drivers that force corps to key in on quarterly Wall Street analysts projections on their company's stock price. If a company misses a projection by a few pennies its tragic and hundreds if not thousands will get laid off to make the bottom line look better.... regardless of the company's true value. Stock prices dictate many large companies policies.

Another fall out of this is that CEO and Board members compensation is in stock, so company policy will be manipulated to increase that price when the opportunity suits them best.... like just before a CEO bails out and resigns, look for large numbers of layoffs to bring up that bottom line and increase stock value.

[-] 3 points by gnomunny (6638) from St Louis, MO 2 years ago

Now this is why I love this forum. People like you that have more than a superficial understanding of the facts. Good, insightful comment, geo. And a case in point about what's gone wrong with businesses (in my opinion) in general. The stock price became the primary concern, rather than a quality product, like it used to be. There's something fundamentally wrong with mindset of these people. If their business made ten million net profit last year but only nine million this year, to them, they've lost a million. I don't know much about business but it seems to me, no, you made nine million. What's wrong with this picture?

[-] 2 points by geo (2638) from Concord, NC 2 years ago

Thanks, I appreciate your kind words. And I agree with you, the company made 9 million profit they didn't lose a dime.

The other point I forgot to make in my post is that unless you bought stock in the initial IPO, the initial stock release... you are not giving money to the company for capital. Think about that.

The vast majority of stock holders are in this boat. The are buying stock from a previous stock owner, giving HIM money for the sale... not the company they now own a portion of.

BTW, I'm new to this forum... how do you make text bold?

[-] 0 points by monetarist (40) 2 years ago

"The other point I forgot to make in my post is that unless you bought stock in the initial IPO, the initial stock release... you are not giving money to the company for capital." - Yes genius. Thats the point. Did you realize this fact of life today? That's the reason anyone buys stocks at the IPO, to make money on it if the stock soars

[-] 1 points by geo (2638) from Concord, NC 2 years ago

You missed my point completely, genius. Many people talk about investors supplying the capitol for business growth, when that only happens a few times. Most 'investors' just flip stock... thats not investing.

[-] 2 points by monetarist (40) 2 years ago

You do lose money on stocks. And the risk of losing money is even more during an IPO because no one is sure what they stock will be valued at. Some of the recent tech IPOs (including Groupon) were disasters and the stocks lost much of their value within days (in some cases hours) after the IPO. For further discussion on the topic I would urge you to read the book "Corporate Finance" by Brealey, Myers and Alllen.

[-] 1 points by geo (2638) from Concord, NC 2 years ago

'You do lose money on stocks.'

But thats obviously not the motivation now is it. Quite a few tech IPO's are disasters because it is extremely difficult to value what they produce, it's very different than hard sectors like manufacturing where the product is tangible. So one has to do their homework, and believe in the company, no guts no glory.

[-] 0 points by monetarist (40) 2 years ago

You really don't understand business do you? Doesn't matter whether the product is tangible or not. Even 'manufactured' products have risks. Whether you are launching a car, or a drill or a aircraft or whatever, risks exists because of the kind of products/sector. A more revolutionary product is more risky. As for valuing tech IPOs or intangible products, there are very easy and rather well known ways of doing it. What is tough to value is a startup and it's potential, whatever the sector may be. The more revolutionary a startup the harder it is to value it.

[-] 2 points by geo (2638) from Concord, NC 2 years ago

' As for valuing tech IPOs or intangible products, there are very easy and rather well known ways of doing it.'

Thats why people lost their shirts in the 'dot.com' crash. But you'd probably state...'Oh, but we learned from that and have new improved ways of determining value from intangibles'.... snake oil.

[-] -1 points by monetarist (40) 2 years ago

How did you make the link between what I had written and the dotcom bust? Dotcoms went bust, to put it short, because they did not have a viable business model.

[-] 2 points by geo (2638) from Concord, NC 2 years ago

The investors who pumped billions into tech companies during that period didn't have a clue as to how to value intangible products. Stock prices where way out of touch with with what they should have been.

Didn't matter what the business models were we are talking about stocks and evaluation.

[-] -1 points by monetarist (40) 2 years ago

Yes they didn't. And it wasnt because the products were intangible but because the products were very new, the market was new, consumer behavior and acceptance was unknown etc. I tried to make you understand but then as in any debate, each side wants to stick to their notions and considers accepting their mistake. Therefore I rest my case here. If you really think you understand better about valuation of software products/services better than a product manager at a well known software company who also has an MS and a MBA, suit yourself. I am sure you are right I am wrong.

[-] 2 points by monetarist (40) 2 years ago

Frankly, I dont know and dont care what shareholders 'used to be'. I care about what they are, now, in the present. And the way I see it, share holders have been this way for the last 30 years.

Yes, agreed sometimes long term interests are sacrificed at the cost of short term quarter to quarter profits. But then there are companies who still take the gamble. Google, Apple etc are some companies that have clearly stated that they are not particularly zealous about beating quarterly forecasts. And it works for them.

As for CEO compensation being linked to share prices, again these are vested over a long period, a year, may be 3 years or even 10 years. So they do have an interest in driving long term profits as well.

And give me one example of a company that missed it earnings projections by 'pennies' and laid off 'thousands'? You are simply exaggerating.

[-] 1 points by geo (2638) from Concord, NC 2 years ago

'Yes, agreed sometimes long term interests are sacrificed at the cost of short term quarter to quarter profits. But then there are companies who still take the gamble. Google, Apple etc are some companies that have clearly stated that they are not particularly zealous about beating quarterly forecasts. And it works for them.'

Most of those companies that aren't zealous are not publicly owned.

'And give me one example of a company that missed it earnings projections by 'pennies' and laid off 'thousands'? You are simply exaggerating.'

Wachovia, I was there.

[-] 1 points by gnomunny (6638) from St Louis, MO 2 years ago

I was just having a little fun, monetarist, I'm fully aware of the need for shareholders in the scheme of things. Frankly, I'm surprised one of you guys didn't call me on it sooner. ;-)

[-] 1 points by monetarist (40) 2 years ago

I am globe trotting these days. So dont have access to internet all the time

[-] -2 points by monetarist (40) 2 years ago

And how exactly do you pay those shareholders? Specially ironic because you guys could not manage to get a job and are now squatting in and around wallst asking for handouts. You can't even pay the homeless guy on the street.

[-] 4 points by shoozTroll (17632) 2 years ago

Oh, I keep forgetting, that's the magic money the "invisible hand' graces them with.

It's just magical money that comes from nowhere. It didn't come from all the products and services we purchase. NO, no it couldn't be that.

It's just magically earned,by people that do close to nothing to earn it.

Is that what you spend all you time doing? Shitting in the corner?

Or just on you keyboard? Must be that, 'cause that's all you're typing, is shit.

Not a lick of thought involved, just shit.

[-] -2 points by monetarist (40) 2 years ago

Are you an idiot? When did I say money comes through some 'invisible hand'?

As you are right, you buy products and services. You pay money and get products/service in return. You are not doing any charity. If I paid you to do a job, it does not give me the right to tell you what you should do with the money I paid you. Whatever a company does with it's earnings, as long as it's legal and the shareholders agree, is none of your bloody business.

[-] 4 points by shoozTroll (17632) 2 years ago

What are you an imbecile?????

A puppet on a string? Loose in the head?

Going up the down staircase?

WE pay for all of it!!!! Every single thing.

EVERY single penny. They didn't earn shit. They stole it!

How the hell else you gonna maximize profit?

Sell a great product, for a great price? HA HA!

Geez where the hell you been? In some excuse for an economics class?

They just give you an excuse to steal, make you feel alright about it, even though you're nutz.

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[-] 4 points by geo (2638) from Concord, NC 2 years ago

Executive compensation is paid out of company profits. Company profits come from sales. Sales revenue is generated from product bought by.....us.

And increased profit ratio's are made by paying employees (us) less, and expecting more production and more hours worked.

[-] 5 points by gnomunny (6638) from St Louis, MO 2 years ago

Thank you. And morons like 'Delouser" think we don't get it.

[-] -3 points by Delouser (-54) 2 years ago

You don't get it. Sure, you can stand in front of your mailbox every day, but unless you're a shareholder, it simply isn't your money.

[-] 3 points by gestopomillyy (1695) 2 years ago

but if my money was 'invested' in the bailout.. then why isnt it my money? why am i not a shareholder? the company used my money to generate profit the same as it does for shareholders. why the difference

[-] -3 points by Delouser (-54) 2 years ago

One, I doubt you pay taxes. Two, if you do, you were. But now you aren't. The government stakes have been repaid.

But if you want to vent on some fixation about executive compensation, do so about AIG, GM, Fannie Mae, and Freddie Mac. They represent an absolutely tiny share of the companies in the country, but those are "yours". Let's run those with the idiotic views of OWS and watch what happens.

[-] 3 points by gestopomillyy (1695) 2 years ago

why would you doubt i pay taxes? do i sound foreign? im not fixating.. your the one that posted your fixating.. and every american with a 401 is a shareholder for that matter. so who are you talking to? do you actually think those people have any say in these bonuses? no they do not although it is their money as you say

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[-] 1 points by brightonsage (4494) 2 years ago

It is their money. Just because somebody else bought the IPO doesn't mean that the current shareholder didn't invest in the company. Their proxy invested it for them in the IPO and they now hold the obligation that the shares represent. It might also be your money if you are an employee and can refer to your pension fund's money as "your money" and we know the companies like to repudiate the pensions they agreed to and shift the burden to the tax payer's (as Mitt did with the steel company in Kansas City). Another way they get it is to sell bonds to someone's pension funds and later default on the bonds.

The Mutual Fund managers don't really care about their shareholders, so they let management pay themselves enormous bonuses, retirements, golden parachutes etc. because they plan to sell before those get paid. It is a form of pump and dump. The directors pass rules so that the shareholders don't get to vote on these deals anyway because they have their own sweetheart deal provided by management. You know how it works, don't you?

[-] -3 points by Delouser (-54) 2 years ago

That still doesn't make it yours. It still belongs to shareholders. If they pay their executives less, it's theirs, not yours. I mean, heh, they appreciate your concern and all, I'm sure.

[-] 5 points by geo (2638) from Concord, NC 2 years ago

Caught up in that property rights circle are you? Who owns what? Tell me who owns the atmosphere? What gives companies the right to use it for producing products?

[-] -3 points by Delouser (-54) 2 years ago

Yeah, ok, you're one of those. LOL. You own everything, now go back to sleep and dream some more about the old Soviet Union.

[-] 5 points by geo (2638) from Concord, NC 2 years ago

I don't own anything. You seem to be hung up on ownership. Go delouse yourself.

[-] -3 points by Delouser (-54) 2 years ago

You don't own anything. I believe you. But following some of the learning points and it might help turn that around for you. Until then, make sure you tell your mommy about your computer use.

Are there any other expenses that you think shareholders (you know, those other people and not you) could save on, or is this it? LOL.

[-] 4 points by geo (2638) from Concord, NC 2 years ago

Made my first million before I was 25 back in the early 80's, since then I have given it all away and live a much simpler life. I'm 58... so please address me as Sir.

[+] -4 points by Delouser (-54) 2 years ago

Nice try, but it still belongs to shareholders. Now have a seat and try to learn something.

If you don't like the product or the price... get ready... don't buy it. But that's the freedom you've always had in the system OWS goons hate. Shareholders already get that part.

[-] 2 points by forbetter (54) 2 years ago

Corporations should have stakeholders, not just shareholders. Anyone affected by a corporation should have a stake in it, not just those who put up the money.

[-] 2 points by alexrai (851) 2 years ago

I think almost everyone owns stock you idiot... maybe not personal holdings but retirement/pension funds, etc. you know those things with all the unfunded liability because executives keep running their companies into the ground and paying themselves big fat bonuses...

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[-] 2 points by beautifulworld (20523) 2 years ago

Executive compensation is a labor cost like any other labor cost. Regardless of how it is actually paid out, it is a cost that is ultimately paid for by the consumer of whatever good or service is being produced.

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[-] 1 points by DanielBarton (1345) 2 years ago

Compensation is paid that way for all of the companies that didn't get bailed out but those who did took tax payer money and lined their pockets.

[-] 1 points by gestopomillyy (1695) 2 years ago

then why do shareholders have 'sue ' in open court to control the amount of that pay? maybe you should do some research. shareholders have nothing to do with how much those ceo's pay themselves.

http://abcnews.go.com/Business/citigroup-shareholder-sue-failed-pay-vote/story?id=16175078#.T5bANOQk2vQ

[-] 1 points by factsrfun (6883) from Phoenix, AZ 2 years ago

Some people in the church will tell you, trust in God, but get a job.

But this is not decided by God either, it is perfectly fine for Americans to look around in tough times and make sure our capital is being well spent. Whither we choose to set rules where the money flows through this hand or that. We have not only the right but the responsibility as citizens in a democracy to pay attention and adjust the rules if the capital is being poorly used. In these tough times this is more important than ever. Sure those who have rigged the game in their favor want you to believe it's all "the unseen" hand of the market as if God was doing it all. Well it ain’t.

[-] 1 points by factsrfun (6883) from Phoenix, AZ 2 years ago

and should be taxed at 90%.

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[-] 1 points by trashyharry (1496) from Waterville, NY 2 years ago

It is very interesting that our resident Champions of the Havitalls are creating posts which are becoming ever more shrill and fearful.The Havitalls could probably pull the plug on #OWS easily by announcing a large,across the board pay increase for all of their wage slaves,who have seen no significant rise in income for 30 years-but their greed has&will continue to addle their cognitive abilities,preventing them from doing anything that might stop them from being converted to Haditalls-DTTFD-trash

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

A CEO's $10 million dollar salary is relatively small compared to a multi billion dollar corporation. Less than 1% of gross profit. What is big are the prices we pay to buy these products. A pound of grain costs 10 to 15 cents, but a 1 pound box of cereal costs $3 or more. The box and advertising cost more than the manufactured cereal.

As long as people keep buying products without understanding the manufacturing cost, that CEO will continue to make the really big money.

[-] -2 points by Delouser (-54) 2 years ago

Well, take your great understanding and stop buying things. You're free to do so. Maybe you want to embrace an expansion of the free market so that those prices you complain about might fall.

[-] 2 points by jrhirsch (4714) from Sun City, CA 2 years ago

I haven't stopped buying cereal, I started buying it for a fair price. $1.58 lb from the bulk bin. As much or as little as I need. No box, no advertising, almost no trash.

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

I embrace a free market, but also a fair market. Buyer beware!