Rich getting richer, poor getting poorer

Rich getting richer, poor getting poorer

I’m in the 98% bracket and I know how it feels not to be wealthy. I don’t know how this can be resolved. It is up to the rich to take the initiative I think and start to share their wealth. I think the world’s two richest people Bill Gates and Warren Buffet have already adopted this approach.

class warfare

in the United States, where I live, the middle class s getting larger and larger. Minority groups can no longer be stereotyped, as many members have middle and uper management jobs with very healthy incomes. Home ownership prevails with this dynamic segment of the population. Luxury car sales BMW, LEXUS, Mercedes, are in record high numbers. Capitalism works here in the U.S. It’s the only system that reflects true individualism. Individualism has made my country great.

Our responsability

Hello.

I live in the USA and I am not rich. At least, not yet. Originally from Africa, I know the discrepancies between the richest and the poorest have some historical factors.

But let’s not forget that we are personnaly responsible for our own future, be it successful or failure.

A poor man (this includes me) will never get out of his condition unless he is willing to take responsabilty and recognize that he is the master of his destiny and can make his own life whatwever he wishes.

Merry Christmas to all.

The world bank makes a mistake

It fails to take into account foreign currency exchange rates. Both India and China artificially devalue their currency. That makes Indians and Chinese appear to have less income(measured in dollar) when they actually do not.

The Chinese yuan (RMB) to one dollar is still around 8 to 1.

Up to the wealthy?

It’s up to the wealthy to share the wealth? What about being up to the poor to work hard, come up with new ideas, and create new businesses. Why is it up to anyone with more to “help” those with less? I think creating a business which employs hundreds of thousands of people is help enough don’t you think? Or how do you propose sharing the wealth? This mentality ends in the use of force
eventually cutting everyone down to the lowest common denominator. Quit whining and get a job.

poorer than ever

As the rich get richer the poorer seem to be getting poorer faster. This seems to be everywhere. In the US, where I live, I have felt this crunch very well as others I have talked to. Capitalism ideas is what allows this to happen. That is why I am so against the basics of capitalism.

The wealthy control the world through their corruption, and are SQUEEZING THE BLOOD OF THE POOR

Since the Bush administration took control, the world economy has favored the wealthy, and in every country of this planet the wealthy have increased their financial interests, and the poor have become poorer and poorer, and poorer.

These wealthy pigs got toghether and cornered all the markets of this planet, they controll the exchange rates, world commodities, international trade, international banking, telephone rates, oil prices, have received generous tax cuts and placed the tax burden upon the poor, they are literally SQUEEZING THE BLOOD OF THE POOR, and for this reason they are getting richer and richer.

It is all the fault of the favorable POLITICAL CLIMATE that they have ESTABLISHED FOR THEMSELVES, THROUGH CORRUPTION AND LIES AND MERGERS, BULLING THEIR WAYS TO DESTROY THE MIDDLE CLASS, THESE SICK PEOPLE ARE IN NEED OF PSYCHOLOGICAL HELP BECAUSE IF THEY LOOSE THEIR PRECIOUS MONEY THEY WILL CERTAINLY COMIT HARI-KARI.

Sammy, a poor, but still a happy man, and sleeps well at night.

Sammy

;12913:


Sammy, a poor, but still a happy man, and sleeps well at night.

You forgot uneducated.

Sammy;12913:
Since the Bush administration took control, the world economy has favored the wealthy, and in every country of this planet the wealthy have increased their financial interests, and the poor have become poorer and poorer, and poorer.

These wealthy pigs got toghether and cornered all the markets of this planet, they controll the exchange rates, world commodities, international trade, international banking, telephone rates, oil prices, have received generous tax cuts and placed the tax burden upon the poor, they are literally SQUEEZING THE BLOOD OF THE POOR, and for this reason they are getting richer and richer.

It is all the fault of the favorable POLITICAL CLIMATE that they have ESTABLISHED FOR THEMSELVES, THROUGH CORRUPTION AND LIES AND MERGERS, BULLING THEIR WAYS TO DESTROY THE MIDDLE CLASS, THESE SICK PEOPLE ARE IN NEED OF PSYCHOLOGICAL HELP BECAUSE IF THEY LOOSE THEIR PRECIOUS MONEY THEY WILL CERTAINLY COMIT HARI-KARI.

Sammy, a poor, but still a happy man, and sleeps well at night.

Any PROOF of you inane statements, Sammy? The political climate is the same as it was under Bill Clinton. Do you condemn him as well?

I must agree with Yukon in that you forgot poorly educated on your list of achievements. Get that education and you will find decent work.

To Yukon 12-25-06 10:15

Thank-you for the complement, I did not know that you were so generous my friend, but I can tell you, that I am still learning, I sure wish that I someday would become as educated as you are, so that I could tell others of being uneducated myself, but reading your comments gives me inspiration in achieving my goal of being educated.

Sammy

And the middle class is getting squeezed in between...

Why the ‘middle class’ always feels squeezed
Myths And the Middle Class; Americans' optimism and perfectionism are constantly mugged by reality. Consider why this will continue.

Dec. 27, 2006 - Almost all Americans see themselves as “middle class." To declare yourself middle class is to say you’ve succeeded without openly bragging that you’re superior—a no-no in a democratic culture. You’re like everyone else, only a little more or less so.

Not surprisingly, a recent poll done for the Economic Policy Institute, a liberal think tank, finds that only 2 percent of Americans put themselves in the “upper class” and a mere 8 percent consider themselves “lower class." The large majority classify themselves as “upper-middle class” (17 percent) or “middle class” (45 percent). The rest (27 percent) see themselves as “working class," a stepping stone to the middle class.

Because the “middle class” isn’t really the middle—it’s a huge blob—describing how “it” feels and thinks is usually an act of simplification, exaggeration or invention. Yet that’s routine because politicians and commentators want to show that they grasp the hopes and fears of everyday Americans.

The middle class today is said to be angry and anxious. It’s worried about jobs, health insurance and retirement income. The EPI poll explores these discontents. Up to a point, it confirms conventional wisdom. One question asked respondents to agree with one of the following statements:

Most people today face increasing uncertainty about employment, with stagnant incomes, paying more for health care, taxes, and retirement, while those at the top have booming incomes and lower taxes.

Or:

Our economy faces ups and downs, but most people can expect to better themselves, see rising incomes, find good jobs and provide economic security for their families.

More http://www.msnbc.msn.com/id/16368672/site/newsweek/

Pretty well says it all, especially with the growing number of poor people around the world...
:mad:
World’s billionaires at record high
Thursday, 8 March 2007, Almost 1,000 people can now lay claim to being members of the world’s billionaire club, says Forbes magazine.

]A record 946 billionaires - worth a total of $3.5 trillion (£1.82 trillion) - now exist, up from 793 last year. Microsoft founder Bill Gates held the top spot for the 13th year in a row with a net worth of $56bn. Forbes put the increase in wealth down to surging commodity prices, real estate and strong equity markets.

“In the last five years... despite all the turmoil in the world, all the conflict in the world, the global economy in real terms expanded over 25%," said Steve Forbes, the magazine’s editor-in-chief. “Never in history has there been such an advance."

Closing the gap

But while the billionaire club’s membership is growing, Mr Gates' lead appears to be diminishing as his fortune increased by a mere $2bn from last year.

[url=http://news.bbc.co.uk/2/low/business/6432941.stm:
TOP FIVE BILLIONAIRES 2007[/url]

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Ranks of London’s super-rich growing
March 8, 2007 - Financial stars rake in multi-million dollar bonuses

]They call themselves “the haves and the have yachts”: rich London bankers and traders who drop tens of thousands of dollars for an evening of cocktails and hire “personal concierges” to get their girlfriends dresses like those worn by movie stars. Long a hub for the world’s ultra-rich, London has just welcomed an unprecedented number of newcomers into those ranks. Analysts here estimate that London’s financial stars were paid a total of $17 billion in annual bonuses in recent weeks — including more than 4,200 people who received bonuses of at least $2 million each, on top of salaries already sagging under the weight of zeros.

“There is a great deal of money sloshing about," said Tony Travers of the London School of Economics, noting that 15 years of uninterrupted growth in one of the world’s most open economies has set London’s financial sector swaggering. This has drawn attention from Wall Street, which regards itself as the center of the financial universe and is not unfamiliar with staggering and conspicuous wealth. A January report commissioned by New York Mayor Michael R. Bloomberg (R) and Sen. Charles E. Schumer (D-N.Y.) concluded that increasingly tight regulation of U.S. financial markets, as well as strict immigration laws, were hurting New York, while rival London, closer to rising giants in Asia and Russia, was becoming more attractive to business and talent.

The swelling number of London’s rich means high times for tailors, jewelers and other people whose job is to cater. Personal concierge services — your whim is their command — have never been busier. They jump for customers who, for instance, want one of Britain’s soccer superstars to report for duty, like a pony, at Junior’s birthday party. Business is soaring at Quintessentially, which provides 24-hour assistance to customers who need to “access the inaccessible," said company co-founder Aaron Simpson. Three customers recently ordered $6,000 replicas of the Marchesa gown that actress Jennifer Lopez wore to this year’s Academy Awards ceremony. The company is also trying to satisfy five women who want to buy a pair of the itty-bitty blue swim trunks that actor Daniel Craig wore in “Casino Royale," the latest James Bond film.

More [url:
http://www.msnbc.msn.com/id/17492040/[/url]

While pensions for the rank and file go broke...
:mad:
CEOs: Riding off into the (well-funded) sunset
June 11 2007: Pension benefits accrue handsomely for the guys at the top of S&P 500 companies, one study finds.

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The world of corporate pensions may be shrinking, but it’s still fairly robust at S&P 500 companies. And that’s true for no one more so than the current crop of the companies' already highly paid CEOs, who have accrued retirement benefits worth over $2 billion today, according to a report released Monday. Two-thirds of S&P 500 companies still offer defined benefit pension plans to their employees, but an estimated 73 percent also offer their top executives an additional pension-like plan known as a Supplemental Executive Retirement Plan (SERP), according to a new study from The Corporate Library, a watchdog on executive compensation issues.

The Corporate Library examined the latest proxy statements from 353 S&P 500 companies, and found that 258 CEOs had defined benefit pension plans and SERPs, in which they had accumulated $2.6 billion in benefits to date. While both traditional pensions and SERPs are entirely funded by the employer, SERPs are much more lightly regulated, and companies have a lot more flexibility in how they design them. Another big difference between the two is their retention potential. With a traditional plan, the longer an employee’s tenure, the greater his pension benefit because benefits accrue more quickly at the end of one’s career. So leaving the company after only a few years means a much smaller pension.

That’s not necessarily the case with a SERP. While SERPs may have restrictions based on years of service dictating when and how much a CEO will be paid, in reality, when a CEO leaves for another company, his new employer is likely to offer so-called “make whole” or “golden hello” provisions that essentially duplicate the value of his old SERP in his new job, explained Paul Hodgson, a senior reasearch associate at The Corporate Library. Moreover, executives may be allowed to take a payout before retirement in place of a benefit accrual, as was the case for Louis Camilleri, CEO of Altria (Charts, Fortune 500) who took a nearly $2 million payout while remaining in his post.

[url=http://money.cnn.com/2007/06/11/pf/retirement/ceo_pension/index.htm?section=money_latest:
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Rich see biggest wealth gains in 7 years...
:eek:
Millionaires are just a dime a 700 now
June 27, 2007 - Survey of world’s wealthy shows number has grown to 9.5 million

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Suppose all of the world’s wealthiest people got together and pooled their assets into one lump sum. How much money would that be? According to a report released Wednesday, the combined wealth of the globe’s richest individuals rose more than 11 percent to a grand total of $37.2 trillion last year. The rise marks the first double-digit increase in seven years.

Thanks to a strong global economy, 9.5 million people held at least $1 million in financial assets — excluding the value of their primary homes — in 2006, up from 8.7 million in 2005, according to the 11th annual World Wealth Report compiled by Merrill Lynch & Co. and the consulting firm Capgemini Group. Those accumulated trillions give these individuals control of about a quarter of the world’s total wealth, or nearly three times the United States' gross domestic product.

If the rich decided to combine their assets and split the money evenly among all 9.5 million of them, they’d each be left with nearly $3,915,789. That would be enough for each person to buy about a dozen Rolls Royce luxury cars, or more than 7,000 of Apple Inc.'s new iPhones. Worldwide, gross-domestic-product growth and accelerating market capitalization — or the value of corporations' outstanding shares in the global market — fueled the generation of wealth, the report found.

More [url:
http://www.msnbc.msn.com/id/19465045/[/url]

In China too...
:eek:
150,000 super-rich in China, numbers growing
15 Aug 2007, China has 150,000 super-rich with personal wealth of $5 million or more and their ranks are rising fast, pushing up prices for golf, yachting, villas and other luxuries, researcher Rupert Hoogewerf said on Wednesday.

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“The number of wealthy individuals in China is growing very fast, based on the economic boom," Hoogewerf, who compiles an annual China “rich list”, said. His China Luxury Index, which tracks 32 items including the Rolls-Royce Phantom EWB and the Louis Vuitton Speedy Bag, shows prices of luxury products in China jumped 8.7 percent in the year to this February, compared with a 3.5 percent rise in the consumer price index.

Luxury properties, golf memberships and executive education led the gains, with the price of a 372-square-metre villa in Shanghai rising 18.6 percent to 19 million yuan ($2.5 million). Also fuelling the rise were China’s culture of gift-giving and the implementation in April last year of a 10 to 20 percent tax on certain luxury imports, he said. Although most luxury goods are imported, they seem to have seen little price relief from the appreciation of the Chinese currency, the yuan, which rose 4.5 percent against the US dollar during the period.

Hoogewerf also said 50 individuals in China had wealth of at least $1 billion, while 2,000 were above $100 million and 35,000 exceeded $10 million The growing numbers of China’s wealthy have caught the attention of the world’s luxury goods makers.

[url=http://timesofindia.indiatimes.com/World/China/150000_super-rich_in_China_numbers_growing_/rssarticleshow/2282995.cms:
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Current subprime crisis hurts lower-income home buyers...
:(
Subprime 'Crisis' Aftermath Hurts Poor Most, Say Experts
August 16, 2007 - In light of concerns over subprime lending, some economic experts say minorities and low-income Americans will face more obstacles to getting credit, and the government must take steps to further regulate the industry.

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Generally, subprime loans are mortgages given to borrowers with low credit scores from a history of paying debts late or not paying debts at all. Because subprime borrowers are seen as high risk, their loans carry interest rates that are at least two percentage points higher than those offered to borrowers with better credit.

“Debt can be a tool and is an important ingredient for families' upward mobility since it allows them to take opportunities that they otherwise wouldn’t have, such as starting a business, buying a home or getting a college education," said Christian Weller, a senior fellow at the liberal Center for American Progress, during a conference call briefing on Wednesday. “The question is not whether debt is good or bad, but whether it is affordable and stable."

But Weller noted that “substantial differences in credit access remain by race, ethnicity and income." “Loan denials are more likely for low-income and minority families," he said. “African- Americans, for instance, have a loan denial rate that is about twice as large as that of whites. That difference remains even after you control for income levels, education and for family size, and a number of other factors."

[url=http://www.cnsnews.com/ViewCulture.asp?Page=/Culture/archive/200708/CUL20070816a.html:
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$15 Million Earrings? All in a Day’s Shopping for New-Money Millionaires
:eek:
Bourgeois Bling: New-Money Millionaires Flood Luxury Market
Aug. 17, 2007 - Luxury Retailers Wooing a New Class of Preferred Customers

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The merchandise is eye-popping, the prices astronomical and the clientele, not exactly old money. Not so long ago if you walked into a really exclusive luxury purveyor the only people who could conceivably afford the real bling were princes, sheiks or crooks. Now a growing number of self-made millionaires are changing the face of the luxury market, demanding the kind of lavish lifestyle that used to be reserved for royals.

Take for example, three of the world’s great luxury brands Tiffany, Cartier and Bulgari. They inhabit a single intersection in Midtown Manhattan. Walking into one of their stores is still like walking into a museum. Jewels encased in glistening glass cases fill the room, and handbags hang like paintings on the walls. But unlike a museum these things aren’t being saved for posterity.

On a recent visit, Bulgari CEO Francesco Tropani proudly showed off his jewels, rattling off the price tag attached to each in a calm, even tone. “This one is even more expensive," he said. “The ring is maybe $1.6 million. We’re talking about really beautiful material here." Tropani isn’t in denial. For an increasing number of people these items are affordable. And unlike the elegant clothing Tropani sports, some customers in Bulgari now arrive in khakis and T-shirts, but they walk out with some major bling.

[url=http://www.abcnews.go.com/Business/story?id=3492283&page=1:
Bourgeois Bling[/url]

It ain’t tricklin' down...
:mad:
GDP growth not reaching paychecks
September 3 2007: The economic recovery that began in 2001 has lifted productivity growth and employment of late, but has had little impact on many workers' wages.

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The economic expansion that began six years ago has failed to benefit most workers, according to a report from the nonpartisan Economic Policy Institute, released Monday. Productivity growth, although slower of late, has been strong since 2000. After a sluggish start in the period, employment has picked up, although at a slower pace than in past recoveries. Yet, that growth hasn’t transferred to workers' paychecks, particularly for workers at the lower and middle end of the pay scale, the report found.

After rising quickly in the second half of the 1990s, most workers real wages have been stagnant in the 2000s, especially since 2003. While productivity jumped almost 20 percent since 2000, the real median hourly wage of all workers rose just 3 percent in the same period. Since 2003, productivity has risen 5 percent, while the median hourly wage fell 1.1 percent. Women saw a bigger rise in wages between 2000 and 2007, up 4.7 percent. Real median wages for men during the same period were up just 1.1 percent.

Both high school and college workers saw hourly wage gains of about 2.5 percent since 2000. Yet, in the period between 2003 and 2007, wage gains for median workers, male and female, as well as high school and college workers have all been flat or falling. Not so for workers at the highest end of the wage scale. At the 95th percentile, real wages have risen 9.4 percent since 2000 and 5.1 percent since 2003.

[url=http://money.cnn.com/2007/09/03/news/economy/epi_report/index.htm?section=money_mostpopular:
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Pets of the rich livin' the life of Riley...
:mad:
Pampered pooches, fat cats living large in luxury pet hotels
Pet owners expect same amenities they receive from child care centers; One pet resort features “tuck in” service, cuddling and a bedtime snack

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If the thought of leaving your cat or dog in a kennel while you travel for business has you feeling guilty, there are a number of top-notch pet boarding options available. In fact, these facilities offer so many activities, amenities and treats that your pet might just have a better time than you do. In recent years, the pet boarding industry has upgraded its services to satisfy customers who demand top-notch care for their animals.

“Pets have become members of the family," explains Jim Krack, founder and former executive director of the American Boarding Kennels Association. “Pet owners expect the same type of amenities from their pet care providers as they receive from their child day care providers. The boarding kennel industry has responded by adding more and more upscale services for pets," according to Krack.

These posh pet hotels routinely go the extra mile in spoiling their furry clients. For example, Ruffin' It Resort in Madison, Wisconsin, provides “tuck in” service each night, where a caretaker spends time with each dog lavishing the animal with cuddling and a bedtime snack. All stays also include about two hours of group playtime in one of three indoor/outdoor play parks, and dogs are segregated based on size and activity level. Pet owners can purchase a swim or treadmill workout for their dog at 4 Paws Swim & Fitness, an affiliate facility.

[url=http://edition.cnn.com/2007/LIVING/worklife/09/12/travel.pets/index.html?eref=rss_topstories:
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And so it goes...
:mad:
They Make Your Annual Salary In 1 Hour
Sept. 20, 2007 - They Make More in an Hour Than You Make in a Year; This Year’s Forbes 400 Leaves 82 Billionaires Out in the Cold

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One billion dollars is no longer enough. The price of admission to this, the 25th anniversary edition of the Forbes 400 is $1.3 billion, up $300 million from last year. The collective net worth of America’s plutocrats rose $290 billion to $1.54 trillion. Wall Street led the charge, despite this summer’s market jitters. Nearly half of the 45 new members made their fortunes in hedge funds and private equity. Money manager John Paulson joins the list after pocketing more than $1 billion short-selling subprime credit this summer.

Leveraged buyout titans David Bonderman and James Coulter of Texas Pacific Group make their first appearance on the list, along with William Conway, Daniel D’Aniello and David Rubenstein of the Carlyle Group. Blackstone billionaires Peter Peterson and Hamilton “Tony” James also join the Forbes 400 for the first time. Other new members of the list include oilman Harold Hamm, who landed on our ranking after taking his Continental Resources oil and gas operation public in May. Brothers Frank and Lorenzo Fertitta scratched and clawed their way onto the list with their Ultimate Fighting Championship pay-per-view fight fest. The Fertitta brothers also recently took their Station Casinos gambling company private with Forbes 400 member Tom Barrack for $9 billion in cash and assumed debt.

Twelve people returned to the list, including computer memory mavens David Sun and John Tu, and John Catsimatidis, who made his fortune buying and holding an oil refinery and New York City real estate through his holding company Red Apple Group. The youngest member of the Forbes 400 this year is 33-year-old John Arnold, a former Enron trader who now runs hedge fund Centaurus Energy and has amassed a $1.5 billion fortune. The oldest member of the list is potato king John Simplot, who is 98 years old and worth $3.6 billion.

[url=http://www.abcnews.go.com/Business/FunMoney/story?id=3629178&page=1:
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See also:

How the Rich Hide Their Wealth
Sept. 21, 2007 - The Rich Go to Great Lengths to Shield Assets From the Public and Sometimes the Government

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There are hundreds of people in the world whose names you might never know but who own millions — if not billions of dollars. These wealthy individuals often go out of their way to hide their assets from scrutiny — sometimes from the public and sometimes from their own government.

Russians, for instance, are reportedly pouring record amounts of cash into London monetary markets to hedge against any future political retribution. Figuring out how much money someone has is not an easy task. Even Forbes magazine, which just came out with its annual list of the richest 400 Americans, acknowledges that its figures are just estimates and are “deliberately conservative."

“Most things like this are very private," says Daniel S. Hamermesh, an economics professor at the University of Texas at Austin. “People aren’t running around telling people about their sex lives or marijuana consumption. They’re considered private things in this and other countries. Income is something that is mine." There are other reasons too.

[url=http://www.abcnews.go.com/Business/story?id=3631669&page=1:
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Rich folks gettin' richer...
:eek:
Guess What: The Rich Are Getting Richer
Oct 12, 2007 - Internal Revenue Service Data Shows That the Poor Are Earning Less Than Before

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The richest one percent of Americans earned a postwar record of 21.2 percent of all income in 2005, up from 19 percent a year earlier, reflecting a widening income disparity among different classes in the nation, the Wall Street Journal reported, citing new Internal Revenue Service data.

The data showed that the fortunes of the bottom 50 percent of Americans are worsening, with that group earning 12.8 percent of all income in 2005, down from 13.4 percent the year before, the paper said. It said that while the IRS data goes back only to 1986, academic research suggests that the last time wealthy Americans had such a high percentage of the national income pie was in the 1920s.

The article cited an interview with President Bush, who attributed income inequality to “skills gaps” among various classes. It said the IRS didn’t identify the source of rising income for the affluent, but said a boom on Wall Street has likely played a part.

[url:
http://www.abcnews.go.com/Business/PersonalFinance/wireStory?id=3721925[/url]

Brother, can ya spare a dime?...
:mad:
Living Paycheck to Paycheck Gets Harder
Oct 19, 2007 — The calculus of living paycheck to paycheck in America is getting harder.

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What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner. Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It’s starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.

Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help. While economists debate whether the country is headed for a recession, some say the financial stress is already the worst since the last downturn at the start of this decade.

From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday. “It’s pretty pronounced," said Kiley Rawlins, a spokeswoman at Family Dollar. “It seems like to us, customers are running out of food products, paper towels sooner in the month."

[url=http://breakingnews.nypost.com/dynamic/stories/S/STRETCHING_PAYCHECKS?SITE=NYNYP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2007-10-19-20-44-45:
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... and the greedy gettin' greedier...
:mad:
Boards change rules to keep big exec bonuses
Fri., March. 7, 2008 - Tied to performance? Well we’ll just not count losses from those bad loans

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Financial company CEOs often talk about needing better incentives to perform. How about this one: You’re lucky to have a job when many of your peers don’t. But that’s not how it’s working in the marketplace. Despite being hard hit by the housing and mortgage slump, some companies — including Washington Mutual Inc. and Toll Brothers Inc. — have made surprising changes in benchmarks for executive bonuses going forward. What they are doing is moving the goal posts in a way that all but guarantees executives will score big paydays. That’s the result when you take out the bad stuff that could drag down compensation and include things that will likely prop it up.

It makes you wonder what boards of directors are thinking in the midst of a housing and mortgage crisis. Billions of dollars in shareholder value have vanished since last summer, leading to the ouster of CEOs at Citigroup Inc., Merrill Lynch & Co. and other companies. Corporate boards, already under attack from shareholder groups for not properly monitoring risk, should be doing what they can to avoid controversy. Instead, some of them seem to be inviting more of it. “Six years after Enron, and it’s still clear there isn’t a culture of board accountability,” said Richard Ferlauto, director of pension and benefits policy at the American Federation of State, County and Municipal Employees, a Washington-based labor group representing government workers. “They are doing things that promote risk-taking with little downside for executives.”

The compensation committee on Washington Mutual’s board looked like it was on the right track by not giving CEO Kerry Killinger a cash bonus in 2007. After all, operating earnings fell 40 percent last year and the shares of the nation’s largest thrift tumbled 68 percent in price. But that kind of pay-for-performance accountability seems destined to slip away in 2008. The Seattle-based company late Monday disclosed in a securities filing that its board changed the executive pay structure to exclude certain credit costs when calculating cash bonuses. Now, 30 percent of the bonuses will be tied to operating profits excluding expected mortgage defaults or the costs of real estate foreclosures. Another 25 percent of the calculation will exclude some restructuring and business resizing costs as well as foreclosures. The board will “subjectively” evaluate the company’s performance in credit-risk management.

More [url:
http://www.msnbc.msn.com/id/23525147/[/url]

Bankers gettin' the comeuppance...
:cool:
Bankers scale back on luxury as job cut fears grow
Wed Mar 26, 2008 - Less than 48 hours after news broke that Bear Stearns & Co Inc. would be bought for a fire-sale price, the wives of two of the firm’s senior investment bankers called their high-end interior designer to cancel their contracts.

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It’s yet another sign that some bankers are slashing spending on luxury items as they fear for their jobs and the value of their firms' shares. “We only had about $50,000 worth of final touches (to go), and the wife called me last week and said stop," said interior designer Darren Henault, whose work has been featured in such magazines as Vanity Fair and Elle Decor. “She said that they’re not poor, and are never going to be poor," Henault said, “but their capacity for discretionary income for things like window valances just went out the window."

Bear Stearns' near-collapse and deal to sell itself to JPMorgan Chase further unnerved a financial industry already jittery after losses from subprime loans and the U.S. economic decline undermined balance sheets at Citigroup Inc, Morgan Stanley, Lehman Brothers Holdings Inc. and other major investment banks. In the first two months of this year, U.S. financial services companies cut more than 20,000 jobs, according to a survey by Challenger, Gray and Christmas. JPMorgan, for one, is expected to lay off a third or even half of Bear Stearns' 14,000 employees when it takes over the smaller bank.

The wife of the second Bear Stearns banker had planned to spend about $300,000 on the couple’s apartment in the next three months, Henault said. But despite losing these projects, he remained upbeat, saying he had enough deep-pocketed clients to keep him from feeling the impact of Wall Street’s troubles.

[url=http://www.reuters.com/article/reutersEdge/idUSN2631380520080326:
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Sign of recession - Exec’s not making bonuses...
;)
US CEO pay hit by rough market
March 29, 2008 - CHIEF executives of large US companies got lower total bonus pay overall last year, a reflection of tumultuous business conditions, according to a study of 178 corporations that have reported 2007 pay data.

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In total, the aggregate value of bonuses awarded to the CEOs covered by the study fell 4.7 per cent to a combined $US375.1 million ($407.5 million) last year, down from $US393.5 million in 2006. The payouts include all kinds of cash bonuses, such as discretionary, annual and multi-year performance bonuses, but do not include other things such as stock option grants or restricted stock.

The study, released overnight, was conducted by Equilar Inc, a US executive compensation research firm. With many more US companies yet to file the annual shareholder proxies containing yearly pay reports, the data provides a preliminary snapshot of 2007 executive compensation trends. “It’s the first time in several years that we are seeing declines in CEO bonus payouts," said Alexander Cwirko-Godycki, research manager at Redwood Shores, California-based Equilar. “Those declines are being led by a pretty steep drop in annual performance-based bonuses."

The median value of annual performance-based bonuses awarded to CEOs covered by the report fell 18.6 per cent in 2007. These awards were given based on an executive’s performance in the year based on various measures set by the company’s board. Fewer companies gave out such payments last year, as some executives either did not qualify for the awards or they voluntarily passed them up. The report found 70.4 per cent of the companies gave annual performance-based bonuses in 2007, down from 77.5 per cent in 2006.

More [url:
http://www.news.com.au/business/story/0,23636,23450304-31037,00.html[/url]

Economy batters the middle class...
:eek:
Middle class: 'On the edge'
July 23, 2008: Experts tell Congress that middle class is struggling with stagnant wages, rising debts and increased expenses.

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America’s middle class is increasingly squeezed by sagging incomes and soaring expenses, experts told Congress on Wednesday. Adjusted for inflation, median household income dropped by $1,175 between 2000 and 2007, said Elizabeth Warren, professor at Harvard Law School, in written testimony before the Joint Economic Committee.

At the same time, the average family is spending $4,655 more on basic expenses, such as gas, housing, food and health insurance. Gas alone costs $2,195 more for a family making the same commute in May 2008 as it did eight years earlier. Families with children saw their child care costs soar. Those with children under age 5 spent an additional $1,508 a month, while after-school costs for older children rose $622.

To cover these soaring expenses, many people have had to turn to credit cards. Nearly 10% of total disposable income in the United States goes to paying off such debt, Warren said. “There have never been since the Depression so many families standing right on the edge," Warren said. “Families have tightened their belts. They have cut down in every discretionary spending area they possible can." “These costs are tearing a hole in the family they simply can’t make up," she added. “You can’t cut out enough lattes to pay for health insurance in America."

[url=http://money.cnn.com/2008/07/23/news/economy/middle_class/index.htm:
Gains go to the wealthy[/url]

Rich hide behind the 5th amendment, they ain’t talkin'...
:mad:
American Millionaires Plead Fifth Before Congress on Tax Dodging Allegations
July 25, 2008 - Peter Lowy and Steven Greenfield Refuse to Answer Questions at Hearing

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Two of America’s wealthiest businessmen refused to answer questions today about secret bank accounts in Liechtenstein, invoking the fifth amendment in an appearance before the Senate Permanent Subcommittee on Investigations. Though the allegations of tax dodging against the men — Peter Lowy, a California resident who heads the U.S. division of the Westfield Group, one of the largest shopping mall chains, and Steven Greenfield, a New York-based toy importer — have been compared to the stuff of spy novels, their testimony lasted just minutes.

But even if today’s hearing was somewhat anti-climactic, the committee’s investigation has already led to a turnaround from Swiss bank UBS AG which pledged during a hearing last week to stop selling secret accounts to American clients — a move that even surprised the senators. UBS' turnaround “provides a dramatic example of how congressional oversight can help stop offshore abuses," Sen. Carl Levin (D-Mich.), chair of the subcommittee, said today.

The hearing was part of a wide-ranging investigation by the subcommittee into how bank secrecy laws have allowed thousands of U.S. citizens to shield their wealth from tax collectors. In addition to UBS, the investigation has focused on LGT, a private bank owned by the royal family of Liechtenstein. Though LGT officials met privately with congressional staff, they refused to speak publicly about the bank’s practices, other than issuing a statement that the bank’s practices have changed. “Count me skeptical that LGT has stopped selling secrecy to its clients," Levin said.

More [url:
http://abcnews.go.com/Blotter/story?id=5450125&page=1[/url]

More poor...
:mad:
Number Of Americans In Poverty Up Slightly
WASHINGTON, Aug. 26, 2008 - But Those Without Health Insurance Fell By More Than 1 Million Last Year; Median Income Up

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The Census Bureau reports that 12.5 percent of Americans, or 37.3 million people, were living in poverty in 2007, up from 36.5 million in 2006. The Bureau said the rate is not statistically different from the previous year. However, the data released Tuesday do not take into account the consequences of the economic downturn that began late last year. Although poverty rates were statistically unchanged for non-Hispanic Whites (8.2 percent), Blacks (24.5 percent), and Asians (10.2 percent) from the previous year, it increased for Hispanics (21.5 percent in 2007, up from 20.6 percent in 2006).

The rate also increased for children under 18 years old (18.0 percent in 2007, up from 17.4 percent in 2006). The rates remained statistically unchanged for those 18-to-64 years old (10.9 percent) and those 65 and over (9.7 percent). The data also revealed that the number of people lacking health insurance dropped by more than 1 million in 2007, the first annual decline since President Bush took office. Census says 45.7 million people - 15.3 percent of the population - were uninsured in 2007. That’s down from 47 million in 2006.

Government health insurance coverage increased to 83.0 million people (up from 80.3 million in 2006), while there was little change in the number of those covered by private health insurance (202 million in 2077, up from 201.7 million in 2006) Both the percentage and number of children under 18 years old without health insurance were lower than in 2006 (11.0 percent and 8.1 million, respectively). Although the uninsured rate for children in poverty decreased last year, from 19.3 percent to 17.6 percent, children in poverty were more likely to be uninsured than all children. In 2007, 24.5 percent of people in households with annual incomes of less than $25,000 had no health insurance coverage.

More [url:
http://www.cbsnews.com/stories/2008/08/26/national/main4384762.shtml[/url]

Uncle Ferd singin' 16 Tons...
:o
Work harder, take home less
August 28, 2008: From 2000 to 2007, worker productivity rose significantly in the United States, but real income fell for middle-class families, a group of economists says.

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For most of the past decade, the economy grew much stronger - but middle-class Americans had little to show for it. That’s the conclusion of a trio of economists who on Thursday released a preview of their book The State of Working America in 2008/2009 due out next year. Despite two periods of recession in the past decade, U.S. worker productivity still rose 18% in the 2000s - about 2.5% per year, according to author Jared Bernstein, a widely followed economist from the liberal-leaning Economic Policy Institute.

But inflation-adjusted income for the American middle-class family actually fell during the same period. The median real income for working-age middle-income families in the United States dropped $2,000 between 2000 and 2007, from about $58,500 to $56,500, the U.S. Census Bureau reported Tuesday. As a result, the 2000-2007 business cycle was the first ever in which the nation’s middle-class families had less real income at the end than when they started. “It’s a compelling example of a large disconnect," said Bernstein. “Americans aren’t being rewarded for their productivity."

That’s a stark change from 1989 to 2000, when the median income for working-age middle class families rose 10% - about half of the productivity growth over the same period, according to EPI. Had the trend of the '90s continued, the median income of working-age households would have risen by $3,600 instead of falling in the 2000s. Not every economist agrees with that assessment. “The numbers are misleading, because you need to take into account everything that workers are earning, including substantially more in health care and retirement plans," said James Sherk, the Bradley Fellow in Labor Policy at the conservative-leaning Heritage Foundation.

[url=http://money.cnn.com/2008/08/27/news/economy/state_of_working_america/index.htm:
Weak job market[/url]