Federal Reserve Chairman Ben Bernanke Wednesday detailed how the U.S. central bank will begin to wean the economy off its extraordinary stimulus, even as he stressed it was not yet time to do so.
Bernanke said the Fed would likely begin tightening monetary policy by removing cash from the financial system before it turns to raise benchmark short-term interest rates.
In his most comprehensive description to date of how the Fed aims to dismantle its extensive emergency economic supports, he also said the central bank could soon raise the discount rate it charges banks for emergency loans, but stressed that would not be akin to a tightening in monetary policy.
"Although at present the U.S. economy continues to require the support of highly accommodative monetary policies, at some point the Federal Reserve will need to tighten financial conditions," Bernanke said in remarks prepared for a hearing of the House Financial Services Committee.
The hearing on the Fed's exit strategy was postponed because of heavy snow, but the Fed released Bernanke's prepared remarks.
Some lawmakers have worried the Fed's aggressive stimulus for the economy could spark inflation.
The Fed's willingness to raise the discount rate, which could come before its next policy meeting March 16, signals it believes that financial markets are working better, a precondition for raising interest rates.
The Fed's move toward withdrawing monetary policy accommodation contrasted with the Bank of England, which is contemplating adding more money to Britain's fragile economy.
Bernanke's comments were seen as suggesting the Fed would tighten before the European Central Bank, which is facing debt crisis among some euro-zone countries, boosting the dollar against the euro.
U.S. stock indexes were mostly flat. Big Wall Street firms polled by Reuters last week expect the Fed to raise rates in the final three months of this year. .
The U.S. central bank has pumped more than $1 trillion into the economy after it slashed benchmark rates to near zero to combat the worst financial crisis since the Great Depression. While the economy has grown for the past two quarters, the unemployment rate is at a lofty 9.7 percent.
Bernanke said the outlook for monetary policy currently remains "about the same" as it was at the Fed's last policy meeting on Jan. 26-27, and he repeated the Fed's pledge to hold interest rates exceptionally low for an extended period.
He said the Fed could begin by testing tools to absorb the massive amount of reserves it had pumped into the banking system, such as reverse repurchase agreements and term deposits for banks at the central bank, in small amounts to prepare markets.
As the time to tighten financial conditions drew nearer, the Fed could ramp up reserve-draining operations. Absorbing reserves would give policymakers tighter control over short-term interest rates, Bernanke said.
Ultimately, the Fed would increase the rate it pays on reserves banks hold at the central bank as its way to take its foot off the monetary accelerator pedal. Raising the interest rate on reserves would encourage banks to park funds with the Fed, taking the money out of circulation.
The Fed has greatly expanded its balance sheet with purchases of mortgage-related debt as part of its efforts to revive the economy.
Ben Bernanke
Pablo Martinez Monsivais / ASSOCIATED PRESS
Federal Reserve Bank Chairman Ben Bernanke
Bernanke said the Fed is not likely to sell any of those holdings in the near term, "at least not until after policy tightening has gotten under way and the economy is clearly in a sustainable recovery." However, when the recovery has advanced and more tightening is needed, the Fed could sell securities, Bernanke said.
Any such sales would likely be gradual and markets would receive ample warning, he said.
The Fed will also return its vast array of emergency lending measures to pre-crisis norms, including raising the discount rate and shortening the duration of loans at its emergency lending window, Bernanke said.
The Fed pulled the discount rate closer to the federal funds rate during the severe credit crunch to encourage banks to use it to obtain short-term funding.
Before the crisis hit, the discount rate was 1 percentage point higher than the benchmark borrowing costs. It now stands at 0.5 percent, while the federal funds rate is between zero and 0.25 percent.
With the Fed's balance sheet abnormally large, controlling the federal funds rate can be difficult, Bernanke said.
During the transition, the Fed will likely communicate its policy stance through a combination of the interest paid on reserves and targets for reserve quantities.
Copyright 2010 Reuters.
ANM World Wide
Earth
Jumat, 12 Februari 2010
US Jobless Claims Fell Last Week, Reversing Trend
The number of U.S. workers filing new applications for jobless benefits tumbled last week, a government report showed on Thursday, reversing a recent spike that had raised concerns about renewed labor market weakness.
AP
Initial claims for state unemployment benefits dropped by 43,000 to a seasonally adjusted 440,000 for the week ended Feb. 6, down from a revised 483,000 in the prior week, the Labor Department said.
Analysts polled by Reuters had expected 465,000 initial claims. The prior week was initially reported as 480,000, an
unexpectedly high reading that was blamed in part on a backlog of claims that piled up over the holiday season.
U.S. stock index futures extended gains after the data, while the dollar pared losses versus the yen.
A Labor Department official said that with this latest report, the administrative backlog was largely "washed out."
"By and large we are resuming a normal level with all states reporting an appropriate base level," the official said.
The four-week moving average, which smoothes out week-to-week volatility, fell by 1,000 to 468,500.
"The good news in the claims is that the Labor Department administrators are telling us that they have gotten through a backlog and perhaps the labor market hasn't deteriorated very much in the last two months," said Cary Leahey, senior economist with Decision Economics in New York.
"You can't conclude that the labor market in February will be worse than it was in January."
Investors are keeping a close eye on jobless claims for evidence that the economy is on the verge of adding jobs again.
With the exception of November 2009, payrolls have declined in every month since the recession began in December 2007.
That has piled political pressure on President Barack Obama, whose popularity fell as the jobless rate rose to a 26-year high.
In an economic report released earlier on Thursday, the White House said it expects the economy to create an average of 95,000 jobs a month this year.
However, it said the unemployment rate would probably fall only slowly, and it was concerned about the large number of people out of work for a prolonged period.
The Labor Department's report showed the number of people applying for benefits after an initial week of aid fell to 4.54 million in the week ended Jan. 30, the lowest in 13 months.
That figure is somewhat skewed by the fact that many people have dropped off the rolls because they have exhausted benefits, not because they have found new jobs.
Copyright 2010 Reuters.
AP
Initial claims for state unemployment benefits dropped by 43,000 to a seasonally adjusted 440,000 for the week ended Feb. 6, down from a revised 483,000 in the prior week, the Labor Department said.
Analysts polled by Reuters had expected 465,000 initial claims. The prior week was initially reported as 480,000, an
unexpectedly high reading that was blamed in part on a backlog of claims that piled up over the holiday season.
U.S. stock index futures extended gains after the data, while the dollar pared losses versus the yen.
A Labor Department official said that with this latest report, the administrative backlog was largely "washed out."
"By and large we are resuming a normal level with all states reporting an appropriate base level," the official said.
The four-week moving average, which smoothes out week-to-week volatility, fell by 1,000 to 468,500.
"The good news in the claims is that the Labor Department administrators are telling us that they have gotten through a backlog and perhaps the labor market hasn't deteriorated very much in the last two months," said Cary Leahey, senior economist with Decision Economics in New York.
"You can't conclude that the labor market in February will be worse than it was in January."
Investors are keeping a close eye on jobless claims for evidence that the economy is on the verge of adding jobs again.
With the exception of November 2009, payrolls have declined in every month since the recession began in December 2007.
That has piled political pressure on President Barack Obama, whose popularity fell as the jobless rate rose to a 26-year high.
In an economic report released earlier on Thursday, the White House said it expects the economy to create an average of 95,000 jobs a month this year.
However, it said the unemployment rate would probably fall only slowly, and it was concerned about the large number of people out of work for a prolonged period.
The Labor Department's report showed the number of people applying for benefits after an initial week of aid fell to 4.54 million in the week ended Jan. 30, the lowest in 13 months.
That figure is somewhat skewed by the fact that many people have dropped off the rolls because they have exhausted benefits, not because they have found new jobs.
Copyright 2010 Reuters.
US Senate Lawmakers Debut Long-Awaited Jobs Bill
Lawmakers in the Senate released a long-awaited $87 billion bipartisan jobs bill Thursday that relies on business tax breaks and construction projects to bring down the unemployment rate.
Senate Democrats had hoped to pass the bill this week but have been delayed by a record-setting snowstorm that has paralyzed Washington for days. With no votes scheduled for Thursday and a weeklong recess looming, action on the bill is not likely until Feb. 22.
Though there has been little bipartisanship in an often-gridlocked Congress this session, the bill has drawn support from at least two Republican senators, Charles Grassley and Orrin Hatch, as both parties agree action is needed to bring down the 9.7 percent unemployment rate.
In a joint statement, Grassley and Democratic Senator Max Baucus said the bill was only a draft that could change significantly.
"We offer it as the first step in the Senate process for consideration of these time-sensitive proposals," the two lawmakers said.
Despite strong backing from the two top lawmakers on the tax-writing Finance Committee, the bill could face resistance from both the left and the right.
Republican Senator Judd Gregg has blasted as wasteful a provision that would add $19.5 billion to a fund that helps state and local governments pay for highway construction, and his staff released a memo suggesting that he could use budget rules to strip it out of the bill.
Lost Tax Revenue
Meanwhile, many liberals question the effectiveness of one of the elements supported by Republicans: a tax credit for businesses that hire people who have been unemployed for at least 60 days.
That approach would cost between $56,000 and $125,000 in lost tax revenue for every full-time job created, according to the nonpartisan Congressional Budget Office.
The bill differs significantly from a $155 billion jobs bill passed in December by the more liberal House that emphasizes construction spending and aid to cash-strapped states.
Democrats hope to bring down the unemployment rate before the November congressional elections, but they also face a growing voter backlash for the hundreds of billions of dollars in deficit spending approved last year to blunt the impact of the worst recession in 70 years.
Democrats in the Senate also no longer enjoy a supermajority after a surprise Republican victory in the Massachusetts Senate race last month.
The Senate bill relies heavily on tax breaks that would cost the government $79 billion in lost revenue over 10 years.
The entire bill's $125 billion cost would be offset by $38 billion in new tax revenue from paper mills and offshore tax havens.
Unrelated elements such as an extension of the anti-terrorist Patriot Act and a move to stave off scheduled cuts in Medicare reimbursement rates also drive up the tab.
Copyright 2010 Reuters.
Senate Democrats had hoped to pass the bill this week but have been delayed by a record-setting snowstorm that has paralyzed Washington for days. With no votes scheduled for Thursday and a weeklong recess looming, action on the bill is not likely until Feb. 22.
Though there has been little bipartisanship in an often-gridlocked Congress this session, the bill has drawn support from at least two Republican senators, Charles Grassley and Orrin Hatch, as both parties agree action is needed to bring down the 9.7 percent unemployment rate.
In a joint statement, Grassley and Democratic Senator Max Baucus said the bill was only a draft that could change significantly.
"We offer it as the first step in the Senate process for consideration of these time-sensitive proposals," the two lawmakers said.
Despite strong backing from the two top lawmakers on the tax-writing Finance Committee, the bill could face resistance from both the left and the right.
Republican Senator Judd Gregg has blasted as wasteful a provision that would add $19.5 billion to a fund that helps state and local governments pay for highway construction, and his staff released a memo suggesting that he could use budget rules to strip it out of the bill.
Lost Tax Revenue
Meanwhile, many liberals question the effectiveness of one of the elements supported by Republicans: a tax credit for businesses that hire people who have been unemployed for at least 60 days.
That approach would cost between $56,000 and $125,000 in lost tax revenue for every full-time job created, according to the nonpartisan Congressional Budget Office.
The bill differs significantly from a $155 billion jobs bill passed in December by the more liberal House that emphasizes construction spending and aid to cash-strapped states.
Democrats hope to bring down the unemployment rate before the November congressional elections, but they also face a growing voter backlash for the hundreds of billions of dollars in deficit spending approved last year to blunt the impact of the worst recession in 70 years.
Democrats in the Senate also no longer enjoy a supermajority after a surprise Republican victory in the Massachusetts Senate race last month.
The Senate bill relies heavily on tax breaks that would cost the government $79 billion in lost revenue over 10 years.
The entire bill's $125 billion cost would be offset by $38 billion in new tax revenue from paper mills and offshore tax havens.
Unrelated elements such as an extension of the anti-terrorist Patriot Act and a move to stave off scheduled cuts in Medicare reimbursement rates also drive up the tab.
Copyright 2010 Reuters.
Wall St.’s Biggest Bonuses Go to Not-So-Big Names
The list of the biggest earners in finance usually reads like a Who’s Who of Wall Street. But these days, it reads more like a Who’s That?
It turns out that some of the highest-paid financial executives in America work far from the canyons of Lower Manhattan, at companies that have largely avoided the outcry over the return of hefty paydays on Wall Street.
Topping the list is John G. Stumpf, head of Wells Fargo [WFC 27.08 -0.10 (-0.37%) ] , the bank based in San Francisco, according to an analysis of 2009 compensation in the industry. Mr. Stumpf was paid a personal best of $18.7 million in cash and stock for 2009 — up 64 percent from 2007, just before the financial crisis struck.
Mr. Stumpf is making twice as much as Lloyd C. Blankfein, his counterpart at Goldman Sachs [GS 154.01 0.38 (+0.25%) ]. Mr. Blankfein — who for many Americans has come to symbolize this new period of Wall Street riches — was paid $9.7 million for 2009, less than some expected.
It is a stunning reversal in the old pecking order of pay. Big names on Wall Street like Mr. Blankfein usually take home far more than staid bankers like Mr. Stumpf, whose bank’s biggest business is making home mortgages and loans to corporations.
But since the bailout, the rules of banker pay are bending. Some of the industry’s biggest names are being paid less than relative unknowns. Chief executives, who are usually at the top of the pay heap, are taking home roughly the same amounts as executives who work for them — and sometimes less.
Mr. Stumpf and other executives have moved up the pay ladder partly because the likes of Mr. Blankfein have moved down. And for all the focus on what top executives earn, what is most startling is how many six-, seven- and eight-figure sums are being awarded to Wall Street bankers and traders whose pay often is unnoticed — if it is disclosed at all.
How much senior executives earn, in cash and stock, is made public in corporate filings. This year, the results are surprising, according to an analysis by Equilar, an executive compensation research firm.
Leaders in the pay sweepstakes include the heads of the credit card giants Visa, Mastercard Worldwide, Capital One Financial and American Express. Joseph W. Saunders, who runs Visa, was paid about $15.5 million, a figure that vastly eclipses the compensation for top executives at Bank of America and Citigroup.
Ajay Banga, the president of MasterCard Worldwide; Laurence D. Fink, the chairman and chief executive of the giant money management company BlackRock; and Richard B. Handler, the boss at the Jefferies Group, a midsize investment bank that is virtually unknown outside financial circles, were each paid about $13 million. Executives at certain discount brokerages, insurance companies and regional banks were close behind.
The big money, as ever, is in Wall Street trading. But pay for employees with few executive responsibilities is typically exempted from disclosure requirements. Brokers and asset managers also land windfalls that are often undisclosed.
“There are probably thousands of people that are in the Millionaire Club — or even the Ten Millionaire Club — that have gotten no heat,” said Alan Johnson, a longtime Wall Street compensation consultant.
To be sure, a handful of prominent companies dominate the well-paid list. Senior managers from JPMorgan Chase and Goldman Sachs occupy many of the top spots. Few of those executives are boldface names, however.
While Jamie Dimon, JPMorgan’s chairman and chief executive, appears to be the second-highest-paid banker, at $17.6 million, one of his subordinates collected nearly as much: Ina R. Drew, JPMorgan’s chief investment officer.
Ms. Drew, whose correct calls on interest rates helped the bank earn several billion dollars of profit, was paid about $13 million.
Despite the spotlight on Mr. Blankfein’s pay at Goldman, little was said about how much Gordon Nixon of Royal Bank of Canada received. His paycheck was roughly the same amount as Mr. Blankfein’s, $9.7 million, though he is hardly a household name.
The Equilar analysis provides an early peek at 2009 pay and is not a comprehensive review. For consistency, any stock or options that were subject to performance hurdles were valued at the target levels; in practice, many executives receive larger payouts for surpassing the company’s financial goals.
Wells Fargo posted strong results, even as it struggled to contend with rising mortgage and commercial real estate losses and accepted a bailout from the government in 2008.
As it rebounded last year, the bank dribbled out the details of its large stock grants for Mr. Stumpf. In August, Wells announced that he would receive $900,000 in salary and about $6.5 million in various types of restricted stock. On New Year’s Eve, Wells issued a statement saying that Mr. Stumpf would receive another allotment of so-called performance shares — worth up to $15.4 million.
That means his pay package could easily top $24 million in a year in which Wells was among the last of the big banks to repay the bailout money.
“We believe we have the very best leadership team in financial services today, and a key to retaining that talent for the long term is to compensate our senior leaders competitively and to align their interests with those of our shareholders,” Stephen W. Sanger, who leads Wells Fargo’s compensation committee, said in a statement last December.
On pay, Wall Street seems to have reverted to its old ways. James P. Gorman, Morgan Stanley’s new chief executive, could receive $11 million to $13 million, even though the company posted an annual loss.
Mark Lake, a Morgan Stanley spokesman, said that Mr. Gorman received that compensation because, as president, he was responsible for integrating the vast Smith Barney brokerage unit and was the prospective chief executive.
Bank of America’s highest-paid executive was the chief architect of its ill-fated acquisition of Merrill Lynch, Gregory L. Curl. He was awarded more than $9.2 million in stock, most of which will be paid out monthly over the next three years.
Brian T. Moynihan, Bank of America’s new chief executive, will be paid about $6.1 million, thanks to a similar large stock grant.
Jefferies Group, a midsize investment bank that had a strong year, rewarded its top executives handsomely. And more pay is coming down the pike. In mid-January, Mr. Handler received a $39 million stock grant and another executive received about $29 million. The stock award, subject to certain performance goals, is payable over the next three years and will come on top of any salary and bonuses the executives get.
One of the highest-compensated financial executives for 2009 was paid well when he was employed — and then even more when he quit. After leaving Visa in July, Hans Morris, the company’s president, collected an exit package valued at $24 million.
“The ride is essentially over, and he is still getting grants,” said Brian Foley, an independent compensation consultant.
by cnbc and new york times
It turns out that some of the highest-paid financial executives in America work far from the canyons of Lower Manhattan, at companies that have largely avoided the outcry over the return of hefty paydays on Wall Street.
Topping the list is John G. Stumpf, head of Wells Fargo [WFC 27.08 -0.10 (-0.37%) ] , the bank based in San Francisco, according to an analysis of 2009 compensation in the industry. Mr. Stumpf was paid a personal best of $18.7 million in cash and stock for 2009 — up 64 percent from 2007, just before the financial crisis struck.
Mr. Stumpf is making twice as much as Lloyd C. Blankfein, his counterpart at Goldman Sachs [GS 154.01 0.38 (+0.25%) ]. Mr. Blankfein — who for many Americans has come to symbolize this new period of Wall Street riches — was paid $9.7 million for 2009, less than some expected.
It is a stunning reversal in the old pecking order of pay. Big names on Wall Street like Mr. Blankfein usually take home far more than staid bankers like Mr. Stumpf, whose bank’s biggest business is making home mortgages and loans to corporations.
But since the bailout, the rules of banker pay are bending. Some of the industry’s biggest names are being paid less than relative unknowns. Chief executives, who are usually at the top of the pay heap, are taking home roughly the same amounts as executives who work for them — and sometimes less.
Mr. Stumpf and other executives have moved up the pay ladder partly because the likes of Mr. Blankfein have moved down. And for all the focus on what top executives earn, what is most startling is how many six-, seven- and eight-figure sums are being awarded to Wall Street bankers and traders whose pay often is unnoticed — if it is disclosed at all.
How much senior executives earn, in cash and stock, is made public in corporate filings. This year, the results are surprising, according to an analysis by Equilar, an executive compensation research firm.
Leaders in the pay sweepstakes include the heads of the credit card giants Visa, Mastercard Worldwide, Capital One Financial and American Express. Joseph W. Saunders, who runs Visa, was paid about $15.5 million, a figure that vastly eclipses the compensation for top executives at Bank of America and Citigroup.
Ajay Banga, the president of MasterCard Worldwide; Laurence D. Fink, the chairman and chief executive of the giant money management company BlackRock; and Richard B. Handler, the boss at the Jefferies Group, a midsize investment bank that is virtually unknown outside financial circles, were each paid about $13 million. Executives at certain discount brokerages, insurance companies and regional banks were close behind.
The big money, as ever, is in Wall Street trading. But pay for employees with few executive responsibilities is typically exempted from disclosure requirements. Brokers and asset managers also land windfalls that are often undisclosed.
“There are probably thousands of people that are in the Millionaire Club — or even the Ten Millionaire Club — that have gotten no heat,” said Alan Johnson, a longtime Wall Street compensation consultant.
To be sure, a handful of prominent companies dominate the well-paid list. Senior managers from JPMorgan Chase and Goldman Sachs occupy many of the top spots. Few of those executives are boldface names, however.
While Jamie Dimon, JPMorgan’s chairman and chief executive, appears to be the second-highest-paid banker, at $17.6 million, one of his subordinates collected nearly as much: Ina R. Drew, JPMorgan’s chief investment officer.
Ms. Drew, whose correct calls on interest rates helped the bank earn several billion dollars of profit, was paid about $13 million.
Despite the spotlight on Mr. Blankfein’s pay at Goldman, little was said about how much Gordon Nixon of Royal Bank of Canada received. His paycheck was roughly the same amount as Mr. Blankfein’s, $9.7 million, though he is hardly a household name.
The Equilar analysis provides an early peek at 2009 pay and is not a comprehensive review. For consistency, any stock or options that were subject to performance hurdles were valued at the target levels; in practice, many executives receive larger payouts for surpassing the company’s financial goals.
Wells Fargo posted strong results, even as it struggled to contend with rising mortgage and commercial real estate losses and accepted a bailout from the government in 2008.
As it rebounded last year, the bank dribbled out the details of its large stock grants for Mr. Stumpf. In August, Wells announced that he would receive $900,000 in salary and about $6.5 million in various types of restricted stock. On New Year’s Eve, Wells issued a statement saying that Mr. Stumpf would receive another allotment of so-called performance shares — worth up to $15.4 million.
That means his pay package could easily top $24 million in a year in which Wells was among the last of the big banks to repay the bailout money.
“We believe we have the very best leadership team in financial services today, and a key to retaining that talent for the long term is to compensate our senior leaders competitively and to align their interests with those of our shareholders,” Stephen W. Sanger, who leads Wells Fargo’s compensation committee, said in a statement last December.
On pay, Wall Street seems to have reverted to its old ways. James P. Gorman, Morgan Stanley’s new chief executive, could receive $11 million to $13 million, even though the company posted an annual loss.
Mark Lake, a Morgan Stanley spokesman, said that Mr. Gorman received that compensation because, as president, he was responsible for integrating the vast Smith Barney brokerage unit and was the prospective chief executive.
Bank of America’s highest-paid executive was the chief architect of its ill-fated acquisition of Merrill Lynch, Gregory L. Curl. He was awarded more than $9.2 million in stock, most of which will be paid out monthly over the next three years.
Brian T. Moynihan, Bank of America’s new chief executive, will be paid about $6.1 million, thanks to a similar large stock grant.
Jefferies Group, a midsize investment bank that had a strong year, rewarded its top executives handsomely. And more pay is coming down the pike. In mid-January, Mr. Handler received a $39 million stock grant and another executive received about $29 million. The stock award, subject to certain performance goals, is payable over the next three years and will come on top of any salary and bonuses the executives get.
One of the highest-compensated financial executives for 2009 was paid well when he was employed — and then even more when he quit. After leaving Visa in July, Hans Morris, the company’s president, collected an exit package valued at $24 million.
“The ride is essentially over, and he is still getting grants,” said Brian Foley, an independent compensation consultant.
by cnbc and new york times
Wall St.’s Biggest Bonuses Go to Not-So-Big Names
The list of the biggest earners in finance usually reads like a Who’s Who of Wall Street. But these days, it reads more like a Who’s That?
It turns out that some of the highest-paid financial executives in America work far from the canyons of Lower Manhattan, at companies that have largely avoided the outcry over the return of hefty paydays on Wall Street.
Topping the list is John G. Stumpf, head of Wells Fargo [WFC 27.08 -0.10 (-0.37%) ] , the bank based in San Francisco, according to an analysis of 2009 compensation in the industry. Mr. Stumpf was paid a personal best of $18.7 million in cash and stock for 2009 — up 64 percent from 2007, just before the financial crisis struck.
Mr. Stumpf is making twice as much as Lloyd C. Blankfein, his counterpart at Goldman Sachs [GS 154.01 0.38 (+0.25%) ]. Mr. Blankfein — who for many Americans has come to symbolize this new period of Wall Street riches — was paid $9.7 million for 2009, less than some expected.
It is a stunning reversal in the old pecking order of pay. Big names on Wall Street like Mr. Blankfein usually take home far more than staid bankers like Mr. Stumpf, whose bank’s biggest business is making home mortgages and loans to corporations.
But since the bailout, the rules of banker pay are bending. Some of the industry’s biggest names are being paid less than relative unknowns. Chief executives, who are usually at the top of the pay heap, are taking home roughly the same amounts as executives who work for them — and sometimes less.
Mr. Stumpf and other executives have moved up the pay ladder partly because the likes of Mr. Blankfein have moved down. And for all the focus on what top executives earn, what is most startling is how many six-, seven- and eight-figure sums are being awarded to Wall Street bankers and traders whose pay often is unnoticed — if it is disclosed at all.
How much senior executives earn, in cash and stock, is made public in corporate filings. This year, the results are surprising, according to an analysis by Equilar, an executive compensation research firm.
Leaders in the pay sweepstakes include the heads of the credit card giants Visa, Mastercard Worldwide, Capital One Financial and American Express. Joseph W. Saunders, who runs Visa, was paid about $15.5 million, a figure that vastly eclipses the compensation for top executives at Bank of America and Citigroup.
Ajay Banga, the president of MasterCard Worldwide; Laurence D. Fink, the chairman and chief executive of the giant money management company BlackRock; and Richard B. Handler, the boss at the Jefferies Group, a midsize investment bank that is virtually unknown outside financial circles, were each paid about $13 million. Executives at certain discount brokerages, insurance companies and regional banks were close behind.
The big money, as ever, is in Wall Street trading. But pay for employees with few executive responsibilities is typically exempted from disclosure requirements. Brokers and asset managers also land windfalls that are often undisclosed.
“There are probably thousands of people that are in the Millionaire Club — or even the Ten Millionaire Club — that have gotten no heat,” said Alan Johnson, a longtime Wall Street compensation consultant.
To be sure, a handful of prominent companies dominate the well-paid list. Senior managers from JPMorgan Chase and Goldman Sachs occupy many of the top spots. Few of those executives are boldface names, however.
While Jamie Dimon, JPMorgan’s chairman and chief executive, appears to be the second-highest-paid banker, at $17.6 million, one of his subordinates collected nearly as much: Ina R. Drew, JPMorgan’s chief investment officer.
Ms. Drew, whose correct calls on interest rates helped the bank earn several billion dollars of profit, was paid about $13 million.
Despite the spotlight on Mr. Blankfein’s pay at Goldman, little was said about how much Gordon Nixon of Royal Bank of Canada received. His paycheck was roughly the same amount as Mr. Blankfein’s, $9.7 million, though he is hardly a household name.
The Equilar analysis provides an early peek at 2009 pay and is not a comprehensive review. For consistency, any stock or options that were subject to performance hurdles were valued at the target levels; in practice, many executives receive larger payouts for surpassing the company’s financial goals.
Wells Fargo posted strong results, even as it struggled to contend with rising mortgage and commercial real estate losses and accepted a bailout from the government in 2008.
As it rebounded last year, the bank dribbled out the details of its large stock grants for Mr. Stumpf. In August, Wells announced that he would receive $900,000 in salary and about $6.5 million in various types of restricted stock. On New Year’s Eve, Wells issued a statement saying that Mr. Stumpf would receive another allotment of so-called performance shares — worth up to $15.4 million.
That means his pay package could easily top $24 million in a year in which Wells was among the last of the big banks to repay the bailout money.
“We believe we have the very best leadership team in financial services today, and a key to retaining that talent for the long term is to compensate our senior leaders competitively and to align their interests with those of our shareholders,” Stephen W. Sanger, who leads Wells Fargo’s compensation committee, said in a statement last December.
On pay, Wall Street seems to have reverted to its old ways. James P. Gorman, Morgan Stanley’s new chief executive, could receive $11 million to $13 million, even though the company posted an annual loss.
Mark Lake, a Morgan Stanley spokesman, said that Mr. Gorman received that compensation because, as president, he was responsible for integrating the vast Smith Barney brokerage unit and was the prospective chief executive.
Bank of America’s highest-paid executive was the chief architect of its ill-fated acquisition of Merrill Lynch, Gregory L. Curl. He was awarded more than $9.2 million in stock, most of which will be paid out monthly over the next three years.
Brian T. Moynihan, Bank of America’s new chief executive, will be paid about $6.1 million, thanks to a similar large stock grant.
Jefferies Group, a midsize investment bank that had a strong year, rewarded its top executives handsomely. And more pay is coming down the pike. In mid-January, Mr. Handler received a $39 million stock grant and another executive received about $29 million. The stock award, subject to certain performance goals, is payable over the next three years and will come on top of any salary and bonuses the executives get.
One of the highest-compensated financial executives for 2009 was paid well when he was employed — and then even more when he quit. After leaving Visa in July, Hans Morris, the company’s president, collected an exit package valued at $24 million.
“The ride is essentially over, and he is still getting grants,” said Brian Foley, an independent compensation consultant.
by cnbc and new york times
It turns out that some of the highest-paid financial executives in America work far from the canyons of Lower Manhattan, at companies that have largely avoided the outcry over the return of hefty paydays on Wall Street.
Topping the list is John G. Stumpf, head of Wells Fargo [WFC 27.08 -0.10 (-0.37%) ] , the bank based in San Francisco, according to an analysis of 2009 compensation in the industry. Mr. Stumpf was paid a personal best of $18.7 million in cash and stock for 2009 — up 64 percent from 2007, just before the financial crisis struck.
Mr. Stumpf is making twice as much as Lloyd C. Blankfein, his counterpart at Goldman Sachs [GS 154.01 0.38 (+0.25%) ]. Mr. Blankfein — who for many Americans has come to symbolize this new period of Wall Street riches — was paid $9.7 million for 2009, less than some expected.
It is a stunning reversal in the old pecking order of pay. Big names on Wall Street like Mr. Blankfein usually take home far more than staid bankers like Mr. Stumpf, whose bank’s biggest business is making home mortgages and loans to corporations.
But since the bailout, the rules of banker pay are bending. Some of the industry’s biggest names are being paid less than relative unknowns. Chief executives, who are usually at the top of the pay heap, are taking home roughly the same amounts as executives who work for them — and sometimes less.
Mr. Stumpf and other executives have moved up the pay ladder partly because the likes of Mr. Blankfein have moved down. And for all the focus on what top executives earn, what is most startling is how many six-, seven- and eight-figure sums are being awarded to Wall Street bankers and traders whose pay often is unnoticed — if it is disclosed at all.
How much senior executives earn, in cash and stock, is made public in corporate filings. This year, the results are surprising, according to an analysis by Equilar, an executive compensation research firm.
Leaders in the pay sweepstakes include the heads of the credit card giants Visa, Mastercard Worldwide, Capital One Financial and American Express. Joseph W. Saunders, who runs Visa, was paid about $15.5 million, a figure that vastly eclipses the compensation for top executives at Bank of America and Citigroup.
Ajay Banga, the president of MasterCard Worldwide; Laurence D. Fink, the chairman and chief executive of the giant money management company BlackRock; and Richard B. Handler, the boss at the Jefferies Group, a midsize investment bank that is virtually unknown outside financial circles, were each paid about $13 million. Executives at certain discount brokerages, insurance companies and regional banks were close behind.
The big money, as ever, is in Wall Street trading. But pay for employees with few executive responsibilities is typically exempted from disclosure requirements. Brokers and asset managers also land windfalls that are often undisclosed.
“There are probably thousands of people that are in the Millionaire Club — or even the Ten Millionaire Club — that have gotten no heat,” said Alan Johnson, a longtime Wall Street compensation consultant.
To be sure, a handful of prominent companies dominate the well-paid list. Senior managers from JPMorgan Chase and Goldman Sachs occupy many of the top spots. Few of those executives are boldface names, however.
While Jamie Dimon, JPMorgan’s chairman and chief executive, appears to be the second-highest-paid banker, at $17.6 million, one of his subordinates collected nearly as much: Ina R. Drew, JPMorgan’s chief investment officer.
Ms. Drew, whose correct calls on interest rates helped the bank earn several billion dollars of profit, was paid about $13 million.
Despite the spotlight on Mr. Blankfein’s pay at Goldman, little was said about how much Gordon Nixon of Royal Bank of Canada received. His paycheck was roughly the same amount as Mr. Blankfein’s, $9.7 million, though he is hardly a household name.
The Equilar analysis provides an early peek at 2009 pay and is not a comprehensive review. For consistency, any stock or options that were subject to performance hurdles were valued at the target levels; in practice, many executives receive larger payouts for surpassing the company’s financial goals.
Wells Fargo posted strong results, even as it struggled to contend with rising mortgage and commercial real estate losses and accepted a bailout from the government in 2008.
As it rebounded last year, the bank dribbled out the details of its large stock grants for Mr. Stumpf. In August, Wells announced that he would receive $900,000 in salary and about $6.5 million in various types of restricted stock. On New Year’s Eve, Wells issued a statement saying that Mr. Stumpf would receive another allotment of so-called performance shares — worth up to $15.4 million.
That means his pay package could easily top $24 million in a year in which Wells was among the last of the big banks to repay the bailout money.
“We believe we have the very best leadership team in financial services today, and a key to retaining that talent for the long term is to compensate our senior leaders competitively and to align their interests with those of our shareholders,” Stephen W. Sanger, who leads Wells Fargo’s compensation committee, said in a statement last December.
On pay, Wall Street seems to have reverted to its old ways. James P. Gorman, Morgan Stanley’s new chief executive, could receive $11 million to $13 million, even though the company posted an annual loss.
Mark Lake, a Morgan Stanley spokesman, said that Mr. Gorman received that compensation because, as president, he was responsible for integrating the vast Smith Barney brokerage unit and was the prospective chief executive.
Bank of America’s highest-paid executive was the chief architect of its ill-fated acquisition of Merrill Lynch, Gregory L. Curl. He was awarded more than $9.2 million in stock, most of which will be paid out monthly over the next three years.
Brian T. Moynihan, Bank of America’s new chief executive, will be paid about $6.1 million, thanks to a similar large stock grant.
Jefferies Group, a midsize investment bank that had a strong year, rewarded its top executives handsomely. And more pay is coming down the pike. In mid-January, Mr. Handler received a $39 million stock grant and another executive received about $29 million. The stock award, subject to certain performance goals, is payable over the next three years and will come on top of any salary and bonuses the executives get.
One of the highest-compensated financial executives for 2009 was paid well when he was employed — and then even more when he quit. After leaving Visa in July, Hans Morris, the company’s president, collected an exit package valued at $24 million.
“The ride is essentially over, and he is still getting grants,” said Brian Foley, an independent compensation consultant.
by cnbc and new york times
Wall Street Melesat Berkat Yunani
Saham-saham di bursa Wall Street langsung melesat setelah mendengar kabar Yunani akan segera mendapatkan pertolongan untuk menangani utangnya, sekaligus menghindarkan kawasan Eropa dari krisis.
Uni Eropa telah memberikan komitmennya untuk mendukung Yunani mengatasi utangnya sehingga terhindar dari kebangkrutan.
"Mereka (Uni Eropa) sepertinya menempatkan segala sesuatu pada tempatnya dan pasar bereaksi dengan baik karena ada rencana. Mari kita lihat bagaimana mereka mengimplementasikannya," ujar Stephen Carl, analis dari Williams Capital seperti dikutip dari Reuters, Jumat (12/2/2010).
Pada perdagangan Kamis (11/2/2010), indeks Dow Jones ditutup menguat 105,81 poin (1,05%) ke level 10.144,19. Indeks Standard & Poor's 500 juga menguat 10,35 poin (0,97%) ke level 1.078,47 dan Nasdaq menguat 29,54 poin (1,38%) ke level 2.177,41.
Berita dari China turut memeriahkan kenaikan saham-saham pertambangan dan material. China yang merupakan konsumen logam-logam dasar melaporkan lonjakan kredit dan inflasi yang mereda, menggambarkan perekonomian yang berada pada jalurnya. Saham Alcoa melonjak 3,2%, US Steel Corp naik 6%, Newmont Mining naik 3,2%. Indeks Material S&P menguat 1,6%.
Saham produsen rokok, Philip Morris International Inc menguat 4% setelah melaporkan laba yang melebihi ekspektasi pada kuartal IV-2009.
Namun perdagangan masih sangat tipis, dengan transaksi di New York Stock Exchange hanya 1,08 miliar, di bawah rata-rata tahun lalu sebanyak 2,18 miliar. Di Nasdaq, transaksi mencapai 2,15 miliar, di atas rata-rata tahun lalu yang mencapai 1,63 miliar.
sumber detik finance
Uni Eropa telah memberikan komitmennya untuk mendukung Yunani mengatasi utangnya sehingga terhindar dari kebangkrutan.
"Mereka (Uni Eropa) sepertinya menempatkan segala sesuatu pada tempatnya dan pasar bereaksi dengan baik karena ada rencana. Mari kita lihat bagaimana mereka mengimplementasikannya," ujar Stephen Carl, analis dari Williams Capital seperti dikutip dari Reuters, Jumat (12/2/2010).
Pada perdagangan Kamis (11/2/2010), indeks Dow Jones ditutup menguat 105,81 poin (1,05%) ke level 10.144,19. Indeks Standard & Poor's 500 juga menguat 10,35 poin (0,97%) ke level 1.078,47 dan Nasdaq menguat 29,54 poin (1,38%) ke level 2.177,41.
Berita dari China turut memeriahkan kenaikan saham-saham pertambangan dan material. China yang merupakan konsumen logam-logam dasar melaporkan lonjakan kredit dan inflasi yang mereda, menggambarkan perekonomian yang berada pada jalurnya. Saham Alcoa melonjak 3,2%, US Steel Corp naik 6%, Newmont Mining naik 3,2%. Indeks Material S&P menguat 1,6%.
Saham produsen rokok, Philip Morris International Inc menguat 4% setelah melaporkan laba yang melebihi ekspektasi pada kuartal IV-2009.
Namun perdagangan masih sangat tipis, dengan transaksi di New York Stock Exchange hanya 1,08 miliar, di bawah rata-rata tahun lalu sebanyak 2,18 miliar. Di Nasdaq, transaksi mencapai 2,15 miliar, di atas rata-rata tahun lalu yang mencapai 1,63 miliar.
sumber detik finance
Obligasi Korporasi Rp 10-15 Triliun Siap Hadir di 2010
Jakarta - Sebanyak 5-7 perusahaan akan segera menerbitkan obligasi dengna nilai antara Rp 10-15 triliun pada tahun 2010 ini. Mereka terpantau telah masuk dalam daftar pemeringkatan yang dilakukan PT Pemeringkat Efek Indonesia (Pefindo).
Selain itu, terdapat pula lima Bank Pembangunan Daerah (BPD) yang juga siap keluarkan obligasi, dengan nilai masing-masing Rp 500 miliar hingga Rp 1 triliun.
Demikian disampaikan Direktur Pefindo Salyadi Saputra saat ditemui di hotel Nikko Jalan MH Thamrin Jakarta Kamis (11/2/2010) malam.
"Ada sekitar 5-7 emiten yang siap keluarkan obligasi dan telah masuk ke kita. Total nilai sekitar Rp 10-15 triliun," katanya.
Saputra menjelaskan, emiten yang kemungkinan besar siap menerbitkan obligasi adalah PT Bank Tabungan Negara Tbk. (BBTN), dengan nilai Rp 1,5 triliun. Ada pula PT Bank Permata Tbk, dengan bentuk obligasi Subdebt dengan nilai Rp 600-700 miliar.
"BTN mungkin akan terbit pada kuartal II. Permata juga akan terbit, Rp 600-700 miliar, tapi subdebt," ucap Saputra.
Ditambahkanya, Perum Pegadaian (Persero) juga yang akan terbitkan Medium Term Note (MTN) dengan jumlah emisi kurang dari Rp 1 triliun.
"Jika dari finance company, nilai total sekitar Rp 2 triliun. Detailnya belum bisa sampaikan," tegasnya.
Perusahaan Listrik Negara (PLN) juga siap kembali terbitkan obligasi tahun 2010. "PLN mungkin ada, sekitar Rp 1,5-2 triliun. Akan terlaksana pada semester I ini," papar Direktor Pefindo Yose Rizal usai malam anugerah Pefindo Award.
Perusahaan lain yang telah dirating Pefindo, terdapat PT Indosat Tbk (ISAT), dengan rencana penerbitan obligasi dolar AS sekitar US$ 750 juta. Untuk obligasi Pertamina (Persero) sendiri, belum ada angka pasti atas nilai emisinya. Namun kemungkinan besar akan bermata uang dolar AS.
Dilain pihak juga telah siap lima BPD yang mengantri untuk menerbitkan obligasi tahun ini. Mereka berasal dari Jawa, Sumatera dan ada lagi asal Nusa Tenggara. Bank DKI dipastikan akan luncurkan obligasi mereka sebesar Rp 700 miliar. Untuk BPD Nusa Tenggara Barat (NTB), obligasi diperkirakan Rp 300-500 miliar.
"Rata-rata yang lain nilainya sekitar minimal Rp 500 miliar, maksimal Rp 1 triliun. Dana dari lima BPD minimal akan terhimpun Rp 2,5 triliun," imbuh Saputra.
sumber detik.com
Selain itu, terdapat pula lima Bank Pembangunan Daerah (BPD) yang juga siap keluarkan obligasi, dengan nilai masing-masing Rp 500 miliar hingga Rp 1 triliun.
Demikian disampaikan Direktur Pefindo Salyadi Saputra saat ditemui di hotel Nikko Jalan MH Thamrin Jakarta Kamis (11/2/2010) malam.
"Ada sekitar 5-7 emiten yang siap keluarkan obligasi dan telah masuk ke kita. Total nilai sekitar Rp 10-15 triliun," katanya.
Saputra menjelaskan, emiten yang kemungkinan besar siap menerbitkan obligasi adalah PT Bank Tabungan Negara Tbk. (BBTN), dengan nilai Rp 1,5 triliun. Ada pula PT Bank Permata Tbk, dengan bentuk obligasi Subdebt dengan nilai Rp 600-700 miliar.
"BTN mungkin akan terbit pada kuartal II. Permata juga akan terbit, Rp 600-700 miliar, tapi subdebt," ucap Saputra.
Ditambahkanya, Perum Pegadaian (Persero) juga yang akan terbitkan Medium Term Note (MTN) dengan jumlah emisi kurang dari Rp 1 triliun.
"Jika dari finance company, nilai total sekitar Rp 2 triliun. Detailnya belum bisa sampaikan," tegasnya.
Perusahaan Listrik Negara (PLN) juga siap kembali terbitkan obligasi tahun 2010. "PLN mungkin ada, sekitar Rp 1,5-2 triliun. Akan terlaksana pada semester I ini," papar Direktor Pefindo Yose Rizal usai malam anugerah Pefindo Award.
Perusahaan lain yang telah dirating Pefindo, terdapat PT Indosat Tbk (ISAT), dengan rencana penerbitan obligasi dolar AS sekitar US$ 750 juta. Untuk obligasi Pertamina (Persero) sendiri, belum ada angka pasti atas nilai emisinya. Namun kemungkinan besar akan bermata uang dolar AS.
Dilain pihak juga telah siap lima BPD yang mengantri untuk menerbitkan obligasi tahun ini. Mereka berasal dari Jawa, Sumatera dan ada lagi asal Nusa Tenggara. Bank DKI dipastikan akan luncurkan obligasi mereka sebesar Rp 700 miliar. Untuk BPD Nusa Tenggara Barat (NTB), obligasi diperkirakan Rp 300-500 miliar.
"Rata-rata yang lain nilainya sekitar minimal Rp 500 miliar, maksimal Rp 1 triliun. Dana dari lima BPD minimal akan terhimpun Rp 2,5 triliun," imbuh Saputra.
sumber detik.com
Nikkei-225 Tembus 10.000, IHSG Siap Melaju
Jakarta - Indeks Harga Saham Gabungan (IHSG) kemarin berhasil menguat dan menembus lagi level 2.500. Menguatnya bursa-bursa regional membawa semangat baru di lantai bursa.
Pada perdagangan Kamis (11/2/2010), IHSG ditutup naik 24,313 poin (0,97%) ke level 2.507,751. Indeks LQ 45 naik 6,258 poin (1,29%) ke level 487,652.
Sentimen positif kembali datang dari menguatnya bursa-bursa utama dunia, setelah Yunani mendapatkan kepastian untuk penanganan utangnya dari Uni Eropa. Hal itu mengakhiri kekhawatiran terjadinya krisis di Uni Eropa. IHSG pada perdagangan Jumat (12/2/2010) diprediksi akan melanjutkan penguatannya.
Pada perdagangan Kamis (11/2/2010), indeks Dow Jones ditutup menguat 105,81 poin (1,05%) ke level 10.144,19. Indeks Standard & Poor's 500 juga menguat 10,35 poin (0,97%) ke level 1.078,47 dan Nasdaq menguat 29,54 poin (1,38%) ke level 2.177,41.
Bursa Jepang juga langsung dibuka menguat setelah kemarin libur, dengan indeks Nikkei-225 kembali menembus level 10.000. Pada perdagangan Jumat (12/2/2010), indeks Nikkei-225 dibuka langsung menguat 101,50 poin (1,02%) ke level 10.065,49.
Berikut rekomendasi saham untuk hari ini:
eTrading Securities:
IHSG sehingga berhasil ditutup naik 0.97%di level 2,507.751 pada perdagangan hari Kamis (11/02/2010). Sentimen negatif dari bursa US terlihat tidak memberikan dampak yang signifikan pada IHSG. Investor dapat mencermati saham-saham TLKM, BBRI, PGAS dan AALI untuk perdagangan hari ini dengan ruang pergerakan untuk indeks pada kisaran 2,467 - 2,555.
Panin Sekuritas:
Reboundnya saham perbankan serta pertambangan didukung oleh rally bursa Asia dan Eropa berhasil mengangkat IHSG ditutup menembus level 2.500. Rencana Uni Eropa mengadakan pertemuan diharapkan akan menyelamatkan Yunani dari krisis hutang. Disisi lain, pergerakan indeks sangat terlihat dipengaruhi oleh sentimen politik yang semakin memanas. Ditengah reboundnya saham unggulan, terlihat saham Grup Bakrie masih tertahan pergerakannya.
Hari ini kami perkirakan indeks masih akan bergerak volatile. Kisaran support-resistance hari ini pada 2.488-2.527.Saham pilihan : BMRI, BBRI, ITMG, ADRO.
by detik finance
Pada perdagangan Kamis (11/2/2010), IHSG ditutup naik 24,313 poin (0,97%) ke level 2.507,751. Indeks LQ 45 naik 6,258 poin (1,29%) ke level 487,652.
Sentimen positif kembali datang dari menguatnya bursa-bursa utama dunia, setelah Yunani mendapatkan kepastian untuk penanganan utangnya dari Uni Eropa. Hal itu mengakhiri kekhawatiran terjadinya krisis di Uni Eropa. IHSG pada perdagangan Jumat (12/2/2010) diprediksi akan melanjutkan penguatannya.
Pada perdagangan Kamis (11/2/2010), indeks Dow Jones ditutup menguat 105,81 poin (1,05%) ke level 10.144,19. Indeks Standard & Poor's 500 juga menguat 10,35 poin (0,97%) ke level 1.078,47 dan Nasdaq menguat 29,54 poin (1,38%) ke level 2.177,41.
Bursa Jepang juga langsung dibuka menguat setelah kemarin libur, dengan indeks Nikkei-225 kembali menembus level 10.000. Pada perdagangan Jumat (12/2/2010), indeks Nikkei-225 dibuka langsung menguat 101,50 poin (1,02%) ke level 10.065,49.
Berikut rekomendasi saham untuk hari ini:
eTrading Securities:
IHSG sehingga berhasil ditutup naik 0.97%di level 2,507.751 pada perdagangan hari Kamis (11/02/2010). Sentimen negatif dari bursa US terlihat tidak memberikan dampak yang signifikan pada IHSG. Investor dapat mencermati saham-saham TLKM, BBRI, PGAS dan AALI untuk perdagangan hari ini dengan ruang pergerakan untuk indeks pada kisaran 2,467 - 2,555.
Panin Sekuritas:
Reboundnya saham perbankan serta pertambangan didukung oleh rally bursa Asia dan Eropa berhasil mengangkat IHSG ditutup menembus level 2.500. Rencana Uni Eropa mengadakan pertemuan diharapkan akan menyelamatkan Yunani dari krisis hutang. Disisi lain, pergerakan indeks sangat terlihat dipengaruhi oleh sentimen politik yang semakin memanas. Ditengah reboundnya saham unggulan, terlihat saham Grup Bakrie masih tertahan pergerakannya.
Hari ini kami perkirakan indeks masih akan bergerak volatile. Kisaran support-resistance hari ini pada 2.488-2.527.Saham pilihan : BMRI, BBRI, ITMG, ADRO.
by detik finance
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