Jamesb101.com

commentary on Politics and a little bit of everything else

The Treasury will let Bank of America repay its $45 BILLION bailout loan so that it can pay bonuses to its employees…

Yes ….you read that right…..$45 BILLION!

They have negotiated a deal with the Treasury (who have to approve them paying the money) to pay back their TARP money….they have had trouble recruiting a replacement for their departing CEO Kenneth D.Lewis due the restrictions that bank must deal with until they pay the money back…..when they repay the government, they will get from under the extraordinary compensation control of the Treasury (they still be subject to a ‘look back’ provision)…..

The government was happy to get the money back..but talks where about the how the Bank could do things…….

……..’discussions bogged down with some regulators initially disagreeing over what steps Bank of America had to take to satisfy concerns about its capital base. In order to win over hesitant parties, the bank agreed to a number of concessions: raising $18.8 billion in new capital; shifting some of its bonus pay to restricted stock instead of cash; and agreeing to shed $4 billion of assets. “We discussed with them what they felt we needed and there was a negotiation around it,” said Bank of America spokesman Robert Stickler.

While regulators wanted Bank of America to shrink as a precondition of their TARP exit, they wanted to avoid the company cutting back on lending in a rush to downsize. The $4 billion of assets the company needs to get rid of will consist of business lines or strategic investments, such as its stake in China Construction Bank, Mr. Stickler said.’……

In the end …this move is about people getting paid more money…..the spot light has moved on…and these guys and girls are assuring that they get those big salaries, stock options, deferred compensation and other perks…no matter how the media chastised them last year….and they will….you wait and see….

This deal will put pressure on the big companies (J.P. Chase & Co and Citibank) to follow suit……

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December 2, 2009 - Posted by | Government, Law, Media, Politics, The Economy | , , , , ,

4 Comments »

  1. As per http://euandus3.wordpress.com/2009/12/03/skipping-stones-what-about-the-foreclosures/ , I think it is telling that the Treasury department is not advocating that the proceeds be used to reduce the number of foreclosures. In fact, Treasury had noted such an alternative in its “break the glass” TARP proposal in April 2008 (before Sept!). I suspect the power of the banking lobby explains this.

    Comment by euandus2 | December 3, 2009 | Reply

  2. I would tend to agree with you…here’s a short story…I know someone at work who has had trouble paying her mortatge…she also has rpoblems in general with her bills…

    She has applied to have her mortagage puting the governement program to bring down her paymenet and stop a possible forclousure…she did the papaerwork months ago…the bank is stonewalling her…but still charging her fee’s……get it?

    You are right…..becuse now that she has buyer lined up… (who is FHA approved so they WILL buy the house……the bank makes more money….

    The banks are STILL doing thier thing…….

    Makes one want to do something, huh?

    Comment by jamesb101 | December 3, 2009 | Reply

  3. in Russia you just go in and put the CEO in jail and put your person in…that usually solves the problem……

    Comment by jamesb101 | December 3, 2009 | Reply

  4. never thought I ‘d say this but maybe that’s what we ought to do that here……..

    Comment by jamesb101 | December 3, 2009 | Reply


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