'You eat what you kill': Wall Street bonuses keep soaring as profits decline

[n2doc]

With all the changes that have taken place on Wall Street since the financial crisis hit – the mergers, the new regulations and the lawsuits that continue to take a toll on banks’ bottom lines, not to mention the Federal Reserve’s demands that they continue to prove their health via regular “stress tests” – one thing remains unaltered.

It’s the ritual of the annual bonus check handed out to those lucky folks who have survived the job cuts and who continue to endure the Hobbesian life – nasty, brutish and short – on trading desks and in investment banking groups across Wall Street.

Given the banking industry’s reputation for ruthlessness and its emphasis on the “buyer beware” philosophy, you might expect a difficult environment to be reflected in the size of those bonuses.

Well, not so fast. This is Wall Street, after all.

True, Wall Street’s profits aren’t what they used to be. Pretax profits fell 4.2% in 2014 to $16 billion, according to New York’s office of the state comptroller. If you think that sounds like a relatively modest decline, consider that 2014 profits were 33% below 2012 levels, and a whopping 74% below 2009, when Wall Street posted record results as markets zoomed back to life after the crisis and banks profited from ultra-low asset values and interest rates.

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http://www.theguardian.com/money/us-money-blog/2015/mar/15/wall-street-bonuses-rise-profits-decline

[BeyondGeography]

1. Clearly, it's time for a "correction"

Falling profits year after year? This will not stand.

[no_hypocrisy]

2. How can the shareholder countenance and accept these bonuses

when falling profits means a lower value for their stocks and/or no dividends?

[n2doc]

3. Shareholders have very little power to change things

Only the ones with significant percentages of stocks get heard at all. And there are examples where even a successful shareholder revolt has been ignored by the execs of a company.

[NM_Birder]

4. The market crash is 07 -08

devoured nearly 60% of my investment portfolio. But, .... for once in my life I listened to the people that knew more about the market than I do when they said "KEEP PUMPING MONEY INTO YOUR PORTFOLIO". And goddamn if they weren't bulls-eye correct.

I lost my ass in 2008, and slowly bled another 12-15% thru 2010, but as soon as the market began really skyrocketing in late 2010 my returns have been nothing short of incredible. From 2011 thru the last quarter of last year, I've seen no less than a 11% growth on the short, and 16%+ on the long. The "economic recovery" job wise I think has been mediocre at best, but for the middle/upper middle market splashers like me, the " market recovery" has been nothing short of hitting the jackpot.

I've been pumping my portfolio for better than twenty years now, (I'm 46) I've never in all that time ever seen anything close to the market bonanza the last 4 years, the market rushing to 15 has defiantly put my retirement in hopefully 10 years, back on the table.
instead of nervously, constantly watching to see if there is an increase, I've got my finger on the trigger to pull the cord and bail out. I almost WANT a downtrend just so I can cash out and get it over with.

The first hint of a "hick-up" and I'm cashing in and stuffing my mattress this time, i can't imagine I'll see another hog trough like we've seen the last 4+ years..The 401K unfortunately will be a probable victim of the market, nothing I can do about it for 20 more years, I can cash it out and take a 40% hit, or leave it and watch it probably lose 40% when the next crash comes.

"The Big Bad Stock Market"... It's not just for the tippy top 1%, there was awesome potential staring us all in the eye, the ride isn't over but I would tread lightly from here, the market limits are stretched out pretty far, the next pop isn't more than a few years away.