How money travels through banks and pockets

Mar 15, 2009 | | Posted in Finances Beware


While more than $2.8 trillion (a trillion is a billion spelled with a t) in retirement savings alone vanished and another $400 billion (a billion is a million spelled with a b) in taxpayer-financed loans were rushed to bail out troubled banks, financial executives gave themselves approximately $18.4 billion in bonuses. Here is a run-down of what the billions were spent on:

  • Spending money
    Former Merrill Lynch boss John Thain spent $1.2 million to spiff up his office in Manhattan. Quite a few things have been reported in the media, one of which was a $35,000 commode on legs.
  • Losing money
    In January, Thain announced his firm had lost $27 billion (a billion is a million spelled with a b).
  • Buying money
    Bank of America then took over Merrill Lynch with a $20 billion federal loan. What’s a $20 billion among friends.
  • Giving money
    What Thain did not announce was bonuses of $3.6 billion (that’s a b not an m) to top Merrill executives, including at least $1 million each to 696 of the firm’s 39,000 employees.
  • Anger-ing money
    Populist anger may be getting through. Citibank, which received $45 billion in bailout funds, has canceled the well-publicized purchase of a $50 million private, 12-seat jet, and CEO Vikram Pandit said he was taking a $1 salary until his bank turned a profit.
  • Traveling money
    V. Pandit and other banking executives traveled by Amtrak and commercial flights for a Washington tongue-lashing last month.

Moral of the story
Angry lawmakers included Rep. Michael Capuano, Dem. Mass., who said simply, “America doesn’t trust you anymore.” And that is how much the executive and legislative branches are willing to say and do. And that’s the way it is, folks. Now, if I could just figure out how to get credit to buy me a car.

What do you think?


Information contained herein is general in nature, and is provided for informational and educational purposes only. Past performance is no guarantee of future results. Talk to your financial adviser.

Read more articles in Finances Beware

 


 

 

 

 

We are always open to your comments.
Give us your feedback. So we may serve you better.


Shafi enjoys writing articles on a variety of subjects, paying off debt - at present he is debt free - giving to charities, likes dark coffee, and helping people succeed in their finances and careers. Please Contact Shafi to write for this blog. He also owns How to create your first website.