You’ll Be Happy to Know that Wall Street Bonuses Saw Only a Small Decline

Yes, as you struggle to pay rent, and those student loan payments from a state university (ha! loser!) prevent you from ever qualifying for a mortgage, you’ll find some cause for optimisim that the world is not a terrible place when I tell you that Wall Street bonus packages saw only a small decline this year:

Total payouts to finance industry employees in New York are forecast to drop only 14 percent during this bonus season, according to a report issued on Wednesday by the state comptroller, Thomas P. DiNapoli. By comparison, profits plunged, falling 51 percent.

Interesting that while profits saw a sharp decline, bonuses did not; presumably, it’s all that “top talent” that the firms are always talking about–we wouldn’t want to fire anybody responsible for a 50% decline in profits, now would we? That guy knows what he’s doing!

Sadly, that 14% drop translates into real hardship:

The average bonus was $121,150, down just 13 percent from the previous year as the headcount shrunk. In 2006, the year before the financial crisis, the average investment bank employee took home a bonus of $191,360.

But the comptroller’s estimates, which do not include noncash compensation, may not give the full picture of this year’s bonus season.

But it seems as though there’s good news after all! Noncash compensation such as stock options were not tallied in the report! Increasingly, banks are offering stock as an alternative to cash bonuses. This move could work out well if the company performs admirably in the long-term, which is ostensibly the reason for offering the option at all (the other reason is that Morgan Stanley caps their bonuses at $125,000).

So, America, the next time you seethe with populist rage, just remember that Wall Street is making sacrifices, too. It’s hard to to get away with killing homeless prostitutes when your bonus declines by 14%.


Did You Make $2 Billion This Year? No? Well, You’ll Have to Pay Taxes–Sorry!

If you’re like me, you didn’t clear $2 billion this year. I know, I know, it was a terrible year for all of us. I’m sure that next year will be better. Especially for A.I.G., which won’t be paying any taxes this year, and probably not for the next several years, either!

Apparently, despite A.I.G.’s sizable $1.6 billion in profits (they declared more than $17 billion, but $1.6 reflects reality), they will be taking this year off from income tax preparation because of a fancy loophole our delightful government arranged for them. Sorry, H&R Block! Insert populist-leaning rabble-rousing here:

This rule-twisting could deprive the government of tens of billions of dollars, assuming the firm remains profitable. The tax dodge, and let’s be honest, that’s what it is, also will most likely help goose the bonuses of A.I.G.’s employees, some who helped create many of the problems that led to its role in the financial crisis.

You see, when A.I.G. suffered catastrophic losses and required a taxpayer bailout, they also were able to declare those losses in some sort of ridiculous tax avoidance scheme (something called “net operating losses”); moreover, because of our ridiculously unfair tax code, they are able to spread those losses over several years, thus eliminating the need for a 1040 for the next decade. Also, A.I.G.’s executives will be able to use such NOL’s to pad their bonuses:

The tax break for A.I.G. also perversely benefits employees who are paid based on the company’s performance and usually in stock, which is being lifted by this backdoor handout. The biggest beneficiary is Robert H. Benmosche, A.I.G.’s chief executive since 2009, who has been granted tens of thousands of shares.

Congrats, Bob! I can imagine that replacing all those worn-out bootstraps really adds up.

Letter From a Birmingham Bankruptcy Courtroom

If you have $4 billion lying around, you might be able to purchase Jefferson County, Alabama, which includes the city of Birmingham. Wait, I know what you’re going to say–do I have to take Birmingham?

Thankfully it hasn’t come to that yet; I say “yet” because the situation in Jefferson county is severely fucked:


The sewer project that the article references is a delightful example of how corrupt the private sector can actually be, and how that corruption can completely fuck a municipality:

Birmingham, which had thrived from Reconstruction to the mid-1960s as an iron and steel town, had been declining for years. Why not embark on a giant public works project, a Taj Mahal of sewage systems, to foster jobs and development?

Jefferson County began to borrow vast sums of money, but that money, it turned out, was a perfect medium for graft and contract-padding. Rather than replacing more than 2,000 miles of decrepit sewer pipes, the county dispensed contracts to build water treatment plants, pumping stations and administrative buildings, some on slag heaps left behind by closed steel mills.

The cost of project was meant to be recouped in fees paid by the users of the service; unfortunately, those users never got the chance because the scam became clear when fees nearly doubled in a short amount of time. Eventually, the scam failed, and it cost millions to fix the bungling of the various contractors. Thankfully, many of the assholes who profited from the scheme went to jail–including a former mayor of Birmingham.

Cut to some further bad investments and the failure of 2008 and you’ve suddenly got a county that’s bankrupt and $4 billion in debt.

Public-private partnerships aren’t always a bad thing, but in a state where the constitution was written to privilege business interests (read: rich white people) over the interests of the residents, such partnerships can be catastrophic. Especially when the public officials are high-caliber anal sores.

But who knows, maybe they’ll get lucky and some new Facebook IPO billionaire will offer to buy the county. Because that kind of seems to be where we’re headed in general.

Hey France, can I sleep on your couch for a while?

How To Be a Rich Politician Without Looking Like a Dick

Congratulations! You’re a rich guy–the cultural elite–and you’d like to run for office. You’d like to show other Americans how to pull themselves up by their bootstraps (as long as those bootstraps include an inheritance and legacy admissions to Andover and Harvard). Yet there are some people out there who’ll still fault you for following all the rules of a rigged game and coming out on top (even though you started on top).

Those people are the reason you must maintain constant vigilance against financial decisions that paint you as a patrician prick, or a born lucky silver-spooned goober. Remember Romney’s offshore accounts? Financial gaffe central! Or what about Nancy Pelosi’s husband, who profited from a Visa IPO during the fight for credit card legislation?

Mistakes happen, and when you’re a rich guy, you want to stay that way. That’s not a crime! So, while you may never convince all the plebes that you’re a street-walking cheetah with a heart of napalm, you can still do your best to look like a man of the people, all while cashing in on the perfectly legal loopholes that the oligarchs included in our complex regulatory system. Here’s how!

1. Taxes are not just for the little people.

You don’t always have to pay your taxes. This guy didn’t and he still won an election. And you don’t have to pay that much in taxes. But if you’re paying taxes, keep it simple. For every three tax benefits a rich guy gets, turn down one. You’ll smell like a rose, and then you can point to your opponent and say, “Hey! He took all three! What an asshole, am I right?”

2. Keep your investment portfolio simple.

Or, at the very least, keep the one that you would release to the public simple. The one where you’re heavily invested in the Eastern European sex trade should probably stay out of the public eye, unless people suddenly approve of sex slavery. Because then you should definitely cash in on that.

3. Remember the complexities of a Senate confirmation.

Do you travel a lot? Have your secretary keep notes. Do you have a few seemingly unethical expense accounts? Have your secretary photoshop them (or erase them altogether). Is there a hush-hush felony in your past? Unfortunately, if all the people involved haven’t been involved in strange accidents, this might be the one thing that disqualifies you. Or not!

4. Think of the questions you’d hate to be asked, and then make sure you ask them of your opponent before they’re asked of you.

If you can’t find the dirt on your opponent before he finds it on you, well, you’re probably not clever or rich enough to be a politician. So just wait until one of your Harvard buddies climbs the ladder and accept an ambassadorship. Preferably to one of the Eastern European countries! That way you can better oversee your investments.

So You’re Going to be a Rich Jackass

First of all, congratulations! Second of all, fuck you! And third, can I hold ten?

If, unlike me, you’re going to be joining the 1% soon, the New York Times has some advice for you. You see, newly inducted members of the financial elite often make huge mistakes; they make these mistakes because many of the them were poor, and thus dumb. So, to make sure their new brethren sport the proper social graces befitting an American lordling, they offer a few helpful tips:

1. Live within your means.

Don’t rush out and buy a TV like some plebe, build a wine cellar– you can afford good wine now. No more Boone’s Farm for you! Also, walk-in humidors are nice.

2. Clear your debts.

Pay the mortgage, the student loans, the car loans, and whatever other loans you might have. Loans are gauche.

3. Hire an adviser and plan for your future.

You’re a rich person now, and rich people have “trusts” and “tax-sheltered annuities” and “brokers.” Get with the program–you don’t want your child attending a state university do you? Of course not!

Being rich is fun!

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