Lunchtime Links: Why bonuses at Citigroup could be worth more than those at Goldman
Breaking Views has produced an interesting analysis on the forthcoming bonus round. It points out that senior Goldman people are likely to receive as much as 80% of this year's payouts in stock (and Goldman executives will receive all their bonuses in stock), but that Goldman's shares offer limited upside.
By comparison, Breaking Views argues that Citigroup's shares look woefully underpriced. If Citigroup's shares (currently at $3.63) recover to Q3 book value ($6.15) and Goldman's shares stagnate, it points out that even Citi bankers who receive bonuses that are 30% lower than Goldman's will end up better off.
Mr Dimon and Mr Moynihan are due to take corporate jets to Washington on Wednesday; Mr Blankfein and Mr Mack plan to travel by commercial air or rail service. (Financial Times)
"My bonus is 10% of my profit for the year. If I make $50mm for the year my bonus is $5mm. What does my bonus have to do with the MBS trader who's sitting on losses?" (ZeroHedge)
"Let's start with Goldman Sachs. Hit them with a windfall profits tax on their high frequency trading. Let Goldman kick and scream." (SenseonCents)
Obama's levy is expected to be spread over as many as 10 years and will be based on the leverage or amount of liability each firm has. (Bloomberg)
"I'm failing to see why the banks in particular ought to bear the financial cost of the Administration's ill-advised bailout of the automobile industry." (MeganMcArdle)
"Wall Street bankers are like mad scientists. They are all mathematicians, and they are very mobile. They can go to private equity and hedge funds." (NYTimes)
Where bankers are spending their bonuses. (CNN)
Hester says recruitment is his single biggest business problem. (Telegraph)
The FSA has frozen salaries, but will still be paying bonuses. (Citywire)
"I can't imagine that a bank would leave Paris over a one-year tax. That would be very short-sighted and hardly reasonable. I don't believe we'll see an exodus of traders." (Dealbook)
Gross national savings as a % of GDP. (Alea)
