[quote=Daniel]The bonus is probably in a watertight contract, so Citi will end up paying it (unless Congress screams again).
But this type of “performance” bonuses are precisely what’s wrong with the whole system: say there was John Doe from AIG or BoA or whatever on the other side of the Citi trade. Is John Doe going to pay $100 million out of his pocket to share in the loss? I think not. He may get fired. So what? When presented with the odds, any sane, rational trader in this world would make a big trade if the probabilities were: 50% chance of making $100 million dollars, 50% chance of getting fired. I know I would.[/quote]
Thank you for that excellent post. It really is a zero sum game. Those NYC people that some people always love to idolize made that money by taking it from some other trader. So trader x makes company yearly profits of 10M, 30M, 60M, 90M and takes 20% bonus. Then the following year he loses 100M, should he pay that 20M in his bank account to the firm and shareholders? If not, then why pay him the huge bonus? Oh, the market was bad, there was a recession, and a host of other excuses. Funny,when the trades were going his way he didn’t blame the rain or snow for the massive profits. This trader’s pay package defines SOCIALISM. He gets the rewards and then when he fails he sticks the bill to shareholders and sometimes the taxpayers. I thought you people hated socialism.
