Saturday, October 24, 2009

Soros On Wall Street Bonuses

You can always count on George Soros for straight talk. He is intellectually honest. Without that integrity you cannot last as long as he has as one of the most successful investors in history. Honesty applies in particular to his own mistakes.

His view here on why Wall Street bonuses are not justified echoes many others, including me, who have spoken out on this issue.

What is not sufficiently stressed in this whole Wall Street pay and bonus scandal is:

1) Wall Street is able to do what it wants is a direct result of lax terms and conditions attached to the various rescue packages courtesy of taxpayers via the government. This negligence is either premeditated or a result of incompetence.

2) Shareholders of these firms paying huge bonuses are conspicuously silent for peculiar reasons.

3) The Boards of these firms with huge payouts who in theory represent the shareholders are conspicuously silent. In fact none of the board members of any failed firms have received any public reprimands. The boards are ultimately responsible for what the firms do.

Since Team Obama had dropped the ball, due to incompetence or otherwise, it is really too late to do a retroactive claw back of bonuses paid out according to contracts.

Those contracts should have been put on ice all done legally as a "sine qua non" of bailout BEFORE the rescue checks were delivered to Wall Street on a silver platter.

No comments: