amid the subprime crisis , revenue declines= bonus increases

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajNCZN9Jn31s&refer=home

Dec. 20 (Bloomberg) -- Wall Street's year-end bonuses climbed 14 percent as increases at Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. more than offset a drop at Bear Stearns Cos.

The four New York-based firms are paying $49.7 billion in salaries, benefits and bonuses this year, up from $43.5 billion in 2006, according to company reports. The bonus portion, estimated at 60 percent of the total, rose to $29.8 billion from $26.1 billion. Merrill Lynch & Co., the third-biggest securities firm, is scheduled to report 2007 results next month.

Investors aren't sharing in the rewards. Bear Stearns has slumped 44 percent this year in New York Stock Exchange composite trading, its worst drop ever, while Morgan Stanley declined 26 percent and Lehman fell 21 percent. Merrill shed 41 percent of its equity value. Only Goldman, led by Chief Executive Officer Lloyd Blankfein, eked out a gain, up 2.4 percent.

``If the company could get away with paying you zero and still think you would be motivated and you wouldn't leave the firm, they would pay you zero,'' said James Ellman, who manages $200 million, including shares of Morgan Stanley and Merrill, at SeaCliff Capital in San Francisco.

Morgan Stanley, the second-biggest U.S. securities firm after Goldman, wrote down $9.4 billion of debt securities yesterday and reported the first quarterly loss in the firm's 72- year history. The ``embarrassing'' loss caused Chief Executive Officer John Mack, who received a $40 million bonus last year, to forgo any reward for 2007.

ospel the fox and his gospel

no wonder , here is the proof of a typical vertical structure of power which has nothing to do with merit or shareholder value. ospel promoted ceo on the aftermath of lctm debacle , sidelining all the former ubs management in favor of sbs , declaring the death of swiss, victim of the same trap, incapable of managing above the average risky instruments but with no eviction for a loser who keeps his chairmanship.SHARE HOLDER VALUE in the ospel gospel


http://www.letemps.ch/template/finance.asp?page=23&article=221661

FINANCE : «La filiale de UBS à l'origine des pertes échappait au contrôle des autorités»

Récit Auteur de «La chute de l'UBS», Dirk Schütz pointe les responsables des pertes abyssales de la banque. Bibliographie
Le Temps



Né à Hanovre en 1964, Dirk Schütz a occupé la fonction de rédacteur en chef de Cash de mai 2002 à juillet 2007. Depuis la fermeture de l'hebdomadaire économique alémanique, il travaille dans le groupe Ringier. Au début de l'année 2008, il reprendra la rédaction en chef du magazine Bilanz, dont il avait été rédacteur en chef adjoint entre mai 1997 et novembre 1999.
Dirk Schütz est l'auteur de trois best-sellers, dont deux sur UBS:
- Herr der UBS - Der unaufhaltsame Aufstieg des Marcel Ospel. Editeur: Orell Füssli, mai 2007
- Gierige Chefs - Warum kein Manager 20 Millionen wert ist. Editeur: Orell Füssli, mars 2005
- Der Fall der UBS. Editeur: Opinio, janvier 1999.

Le catalyseur tardif: la Commission fédérale des banques
Yves Genier et Myret Zaki

UBS était surveillée de près depuis cet été.

La recapitalisation annoncée par UBS lundi dernier n'est pas une mesure que la grande banque a décidée seule, mais largement sous la pression des autorités de surveillance. La Commission fédérale des banques (CFB) a confirmé cette semaine avoir exigé un supplément de provisions. «En septembre, nous avions communiqué aux deux grandes banques qu'en raison de leur poids systémique et des nouveaux risques des activités de banques d'affaires, nous exigions d'elles une marge de sécurité supplémentaire par rapport aux exigences minimales de Bâle II», a déclaré Daniel Zuberbühler, directeur du secrétariat de la CFB, dans Finanz & Wirtschaft.
Credit Suisse moins exposée
La CFB avait placé les deux grandes banques «en observation intensive» depuis le début des turbulences cet été. L'accent s'est «déplacé de plus en plus sur UBS», souligne l'autorité de surveillance, car elle est davantage exposée aux hypothèques «subprime». «Credit Suisse est beaucoup moins exposée aux dérivés de crédit», confirme Alain Bichsel, porte-parole de la CFB.
«Dans le cas de UBS, nous voyions l'accumulation des risques depuis l'été. Les contacts avec la banque ont été menés à un rythme quasi quotidien, y compris les week-ends», relate le porte-parole. Ces contacts ont eu lieu jusqu'aux plus hauts niveaux de la Commission.
«Ces informations ont terni la réputation de comptabilité conservatrice et d'intégrité de la communication de UBS auprès des investisseurs», a commenté la semaine dernière Peter Thorne, analyste bancaire chez Helvea.
La CFB admet que les problèmes ont été identifiés tard: «Les tests de stress effectués ces dernières années par les banques, sur demande des organes de surveillance, n'avaient pas révélé de risque généralisé, reconnaît Alain Bichsel. Comme tous les détails de ces produits ne nous étaient pas connus, nous n'avons pas pu mesurer le risque de manière adéquate. La vitesse de propagation de la crise dans le secteur bancaire nous a surpris.»
Reste que la CFB soutient Marcel Ospel: «Nous pensons qu'il serait faux de remplacer Marcel Ospel à la présidence de UBS car on ne remplace pas le capitaine en pleine tempête. Dans des moments de crise comme celui-ci, il faut des hommes d'expérience aux commandes», affirme Alain Bichsel. Qui tire les leçons de la crise: «Nous devons perfectionner nos tests en cas de crise des marchés. La crise montre aussi l'importance pour les banques de conserver un niveau de fonds propres plus élevé que les exigences minimales.»

on the luxury of philantropic galas and the contribution of bernake

how can wall street gurus be above the fray of the subprime mess and the interest rate decisions when they long for hefty bonuses at the end of the year ? according to bloomberg

Much of the giving is fueled by Wall Street, which is paying record bonuses this year, totaling almost $38 billion, according to data compiled by Bloomberg News.

``Wall Street is fortunate. In both good and difficult times we earn good incomes, so it's tremendously positive that we're very philanthropic,'' said Steven Starker, co-founder and general partner of institutional trading firm BTIG. ``The breadth of giving

incompetent bankers

So does the action by the central banks give us good reason to stop worrying? Only if you like huge rescue operations of incompetent bankers, would be my answer. M. Wiolf, FT

italy's problems

http://iht.com/articles/2007/12/12/news/italy.php

http://www.iht.com/articles/ap/2007/06/18/europe/EU-GEN-Italy-The-Caste.php

Book Rips Cover Off Corruption in Italy

Chicago Tribune

By Alessandra Rizzo
Associated Press
June 19, 2007

ROME -- Lawmakers pocketing wads of state money. A presidential palace whose upkeep costs four times more than Buckingham Palace's. A justice minister who hires his friend, a fish trader, as a consultant on prison construction.

In Italy -- a country never reputed for the probity of its political class -- abuse of office is rampant, according to a best seller portraying an overpaid, power-hungry elite swilling taxpayers' money like Chianti.

"The Caste," which has sold a remarkable 465,000 copies since its publication in May, is stoking an atmosphere that some compare to the eve of the "Clean Hands" scandal of the 1990s, which wiped out much of the ruling class.

"You know what really, really makes me mad? Having to work to support these parasites," said Beppe Grillo, a comedian known for his sharp anti-establishment criticism.

"Calling them 'the caste' is a compliment," he wrote on his Web site. "Their name is scum."

The book came out just as the government was asking Italians to tighten their belts for the good of the country. Many citizens already were deeply disillusioned by scandals and acrimony between the center-left bloc of Premier Romano Prodi and the opposition led by conservative Silvio Berlusconi.

"They are a caste that feels above the society they claim to serve," write the authors, Gian Antonio Stella and Sergio Rizzo, political reporters for Italy's top daily, Corriere della Sera.

The book claims government ministers regularly award lucrative consultant jobs to cronies regardless of their expertise.

It notes that as justice minister, Roberto Castelli awarded a consultancy contract worth $267,000 to oversee jail construction to his friend, a fish trader. Castelli argued that the friend brought "a new mentality to the job." A court ordered him to refund half the money.

Since the book appeared, other instances of alleged misbehavior have added to the outrage. This month, a senator came under heavy criticism and offered to resign for using an ambulance as a taxi to beat traffic jams caused by President Bush's visit to Rome.

"The Caste" and the many debates it has provoked have stung Prodi's government into action. It has appointed a panel of Cabinet ministers and other officials to write legislation to eliminate unnecessary state bodies, cut salaries, curb the number of consultants and be more transparent about public salaries.
- - -
Abuses by the numbers Among the waste and abuses alleged in "The Caste":

*In 2004, the governor of the Campania region spent $1.2 million in entertainment expenses, 12 times what was spent for entertainment in 2006 by Germany's president.

*The Quirinale presidential palace has more than 1,000 employees and its upkeep is four times that of Buckingham Palace.

*Italian lawmakers each receive more than $5,300 a month in state funds to pay aides but often pay out a quarter of that and pocket the rest.

the war of words and the fed

http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vReRFIdRpaQc.asf

when the saints go marching in
and the wolves eating lams
when the shepherd is confused
turned afraid by his withe beard
burden of choice on wall till main street
has no guts to rein them in
They are the Masters he is the servant
Missing the call that is in his hands
handing the sword to protect the lord
hist themiserable below the man