Lunchtime Links: JP Morgan cut investment banking compensation to the bone in Q4

Bad news for everyone who believed the hype. All those claims that JP Morgan would pay gargantuan bonuses this year appear to have come to nothing. Jamie has listened to Obama, and Jamie has acted.

JP Morgan's Q4 results reveal that compensation at the investment bank was cut to just $549m, or 11% of net revenues in the fourth quarter, down from going on for $3bn in all quarters previously.

This leaves the average JP Morgan investment banker with total comp of $378k for 2009, higher than the $275k average for 2008, but lower than the $460k that might have been expected if compensation had accrued at the same rate in Q4 as in the previous three quarters.

Other notable things? Headcount in the investment bank fell by another 174 people in the fourth quarter, and fixed income trading revenues plummeted 45%.

Banks may reduce bonuses to avoid fuss. (Bloomberg)

Signs of trouble as earnings season begins. (DealBook)

This is a essentially a tax on risk, because it targets leverage ratios. (SeekingAlpha)

Lloyd Blankfein: That is not what I said. (DealJournal)

Blaming Wall Street on bonuses is hypocritical. (Washington Post)

"America's taxation leapfrog provides both the Labour administration and Tory opposition with an interesting dilemma: ...they could whack yet another tax on the banks; or they could...reinforce the City and financial services. (Pestowire)

Banks in the UK are already well on the way to repaying the taxpayer; in the US banks may never repay. (BBA)

Why the bank tax doesn't even come close to compensating for the TBTF subsidy. (Baseline Scenario)

The honeymoon is over for Pandit. (Bloomberg)