Fury at $2.5bn bonus for Lehman's New York staff

[Willi]

Taxpayers money? What are you talking about?

"Full faith and Trust of the US TREASURY" means what exactly?

All this is based on future tax liability of the sheople.

[Me]

Treasury Bills? What does that have to do with this story?

[Islandman]

Will Barclay's be one of the institutions standing in line to sell its bad debt to Paulsons trillion dollar trust fund?

[Me]

That deal and the structure had nothing to do with the fed, treasury or t-bills. This bonus structure and the other things would have happened even if the fed decided not to go ahead with its new sub prime fund.

[Islandman]

I have no problems with the deal if they are not allowed to participate in the subprime fund or any other govt bailout program. Its thier money and thier profits.

But if they are allowed to sell into the taxpayer-funded subprime fund, no bonuses to executives or staff should be allowed and compensation increases should be frozen until further notice.

[Me]

I can understand such a position. However, I doubt the fund has any great impact on Barclays given that they got a 4 billion net worth company for 250 million. Any write downs that they experience should not be that great.

[Willi]

You dont think they will join the line when contagion lick dem?

That was my assumption...

Here is a nice video:
http://ca.youtube.com/watch?v=z6NfXk7Bvc8

[Me]

They would probably be better off just keeping those assets if they are already written down. They will take a capital hit if the sell to the fund at a discount because of the realized loss. However, if they keep the assets they can follow stupid mark to market accounting and mark down the assets to a value that will probably be lower than what they will realize by holding to maturity.