Wall Street firms prepare to pay $30 billion in bonuses

Goldman Sachs, JPMorgan Chase and Morgan Stanley all received taxpayer help, and made the news due to bonus programs last year — which were enabled in part by the taxpayer help. Now it appears that Wall Street is ready for more. The bonuses are expected to surpass the last high, reached in 2007, before the financial market collapse, of $26.8 billion. And it really doesn’t matter what anyone says. Bloomberg reports on what seems to be the prevailing attitude on Wall Street:

“Wall Street is beginning to resemble Clark Gable as Rhett Butler in the film ‘Gone With the Wind’: ‘Quite frankly, my dear, I don’t give a damn,’” Paul Hodgson, a senior research associate on compensation at the Portland, Maine-based Corporate Library, said in an e-mail. “It doesn’t seem as if even political threat, disastrous PR, envy, rising unemployment rates and home repossessions is enough to get any of these people to refuse the bonuses they have ‘earned.’”

Clearly, Wall Street has policy makers nicely sewn up, and populist outrage doesn’t affect Wall Street because it clearly does little to prompt lawmakers to take action. So, while thousands stand in unemployment lines this holiday season, it will be little comfort to know that their Wall Street counterparts are enjoying record bonuses.

Image source: Fletcher6 via Wikimedia Commons

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Wall Street Set to Give Out Record Bonuses

Indeed, fees are big business for banks, since they provide a way for them to make money and fund various ventures and enterprises with very little risk. Nomi Prins writes about bank fees in The Daily Beast:

In general, not only do big banks charge higher service fees for the luxury of taking your checking deposits and using them as capital for other ventures, but the interest they provide on these, and savings accounts, are comparatively abysmal relative to smaller banks. …

Overdraft charges are administered not only to people who don’t have enough money in their accounts to pay their bills, but also to customers who may keep enough money in their savings account, but get slapped for not transferring it at the appropriate moment to their meager-interest-rate checking account.

It is no surprise, then, that there is a movement toward using smaller, more local banks and credit unions. Many of the smaller banks offer more attractive rates, and charge lower fees. They do this in order to be competitive and draw your business. And, of course, many of the smaller banks and credit unions aren’t in the habit of making risky decisions. So subprime mortgages and other risky investments don’t need to be covered to as great an extent.

If you are looking at your finances and seeing that some of your money is being leeched away by bank fees, you might consider banking elsewhere. Just like any other product or service, you should shop around for the best deal.

Image source: Wikipedia

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Using a Big Bank: Ripped Off by Fees

Timothy Geithner and Barack Obama (Image: Flickr)

By the end of the trading period, the Dow Jones industrial average was at 7,969.6 — up nearly 1.7% on the day. NASDAQ was up 2.2% to 1,643.9, Russell 2000 was up nearly 4% to 470.1 and the S&P’s 500 was up approximately 2% to 850.1.

On Monday, banks suffered mightily on the stock market. On Tuesday, they did much better. Goldman Sachs was up 4.7%, Morgan Stanley jumped 4.8%, JPMorgan Chase was up 9.6% and Citigroup rose more than 10%.

Geithner said on Tuesday morning that most every bank has enough capital and that the industry on a whole isn’t in major trouble. Some experts were worried that a major government crackdown on banks in the forthcoming weeks would decimate the banking injury.

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Stocks Up on Tuesday After Good Bank News

The Dow Jones industrial average was down more than 3.5% for a total of 290 points. By the end of trading, the Dow was at 7,841.7. Other stock indexes showed similar struggles. The Russell 2000 fell more than 5.5% to 452, the S&P’s 500 dropped more than 4% to 832 and NASDAQ wad down approximately 4% to finish at 1,608.

Most every large bank on the stock market took a significant hit. Bank of America dropped more than 24%, Citigroup slid almost 20% and JPMorgan Chase was down about 10.5%. American Express, which some stock experts thought was prepared to have a great week, crashed 13% on Monday.

In the coming weeks, the stock market’s health will likely depend on the performance of the financial industry. If the banks continue to appear to be on shaky ground, investors will continue to be weary.

Citigroup (Image: Flickr)

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Dow Jones Down 290 Points Amid Bank Worries

JPMorgan Chase is Making Money Once Again (Image: Flickr)

Although the bank took more than $25 billion in United States federal government bailout money, JPMorgan Chase said that it is contemplating paying back the bailout money. The bank also said that they do not believe that they need further bailout aid.

Although the banking industry seemed to be in much danger a few months ago, JPMorgan Chase is the third major bank to surprise experts with a high profit showing. Many industry experts now think that the worst days of the financial crisis have passed.

JPMorgan Chase may be further pressured to payback the bailout money due to the fact that the federal government is cracking down on executive pay for company’s that have received a bailout.

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JPMorgan Chase Shows Healthy Profits

Credit Card (Image: Flickr)

While the monthly service charge will be refunded, any minimum payment requirements will remain. Some JPMorgan Chase cardholders saw their minimum raise from 2% to 5% at the onset of 2009.

Overall, the banking industry is desperate to have their customers pay back their loans. With more and more people defaulting on loans, banks have been more diligent in requiring repayment and more stubborn about who they lend money to in the first place.

JPMorgan Chase is one of the four largest banks in the United States. With roots that can be traced back to around 1800, it’s one of the banking institutions that is deemed too big to let fail by the federal government. As such, JPMorgan Chase got a federal bailout worth more than $20 billion in 2008.

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JPMorgan Chase Gives Credit Card Refund

Empty Wallet - Source: Flickr

In fact, Thursday was such a bad day in the stock market that it wiped away the positive gains that occurred on Wednesday. The Dow Jones industrial average fell to 6,594.4, a loss of more than 280. The Dow hasn’t been this low since the middle months of 2007.

The Standard & Poor’s index also dropped a little bit more than 4% to land on 682.6. The S&P is as low as it has been since 1996. The NASDAQ index fell around 4% as well, while the Russell 200 dropped almost 6% on the day.

Virtually every industry felt the sting on Thursday. The biggest losers were General Motors and a number of the companies in the struggling banking industry including Wells Fargo, JPMorgan Chase and Bank of America. Each of those three banks dropped at least 11% on the day. GM, on the other hand, fell more than 15%.

While some stock market experts think that the market may be nearing a bottom, other experts believe that the Dow Jones industrial average could end up at around 5,000 before the rebounding begins.

Source: Wire Reports

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Rally Over? Stocks Fall Again