  More Big Bucks for Bankers
Reported by The Big Money on Wednesday, 14 October 2009 (on October 14, 2009)
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Investment bankers and the like will no doubt grin broadly when they check out the front page of today's Wall Street Journal and see the big headline predicting a "record year" for Wall Street pay. According to the newspaper's annual analysis of projected pay packages, "total compensation and benefits at the publicly traded firms... are on track to increase 20% from last year's $117 billion -- and to top 2007's $130 billion payout." The average employee at the 23 firms analyzed will take home a respectable $143,400 in compensation and benefits, up nearly $2,000 from 2007's record level.
The good old times are not necessarily back for everyone in the world of finance, however. Kenneth Feinberg, a.k.a. "the federal pay czar," is bracing to do battle with AIG, "informally" advising the troubled insurer "not to pay the full $198 million in retention payments promised to key employees of its derivatives unit, AIG Financial Products," Marketwatch.com reports. AIG had pledged to get at least $45 million back from employees, but has so far collected just $19 million, Dow Jones Newswire reports. The problem is that "some AIG employees are balking at returning 2009 bonuses until they know how much they will receive in 2010," the WSJ reports, citing people familiar with the matter.
It's confirmed. China is the new global king of exports, causing rifts around the world. "China’s exports this year have already vaulted it past Germany to become the world’s biggest exporter. Now, those market share gains are threatening to increase trade frictions with the United States and Europe," The New York Times writes. According to the most recent global trade statistics, Chinese products represent 19 percent of all U.S. imports, up from 14 percent a year ago, evidence that the global recession is hardly slowing down China Inc. And the signs of recovery are looking even brighter in China. According to the WSJ, new data out on Wednesday morning show Chinese "exports in September fell 15.2% from a year earlier, less than forecast, while imports were off just 3.5%. Exports gained 6.3% from August on a seasonally-adjusted basis," the WSJ reports. Meanwhile, in Japan, the economic outlook is as murky as ever. The Bank of Japan this morning left rates unchanged at a minuscule 0.10 percent, but it didn't say anything about how long it might continue to fund the ongoing generous corporate stimulus package, leaving the markets to guess, Reuters reports.
Is tech finally bouncing back? That's the upbeat analyst prognosis now that Intel surpassed its own third quarter sales expectations, the WSJ reports. Intel - maker of the chips that power a good portion of the world's PCs and a bellwether of entire tech sector - predict that market conditions will further improve in this current quarter with expected revenue of $10.1 billion (up about 7% from the third period). The rebound is being driven by strong U.S. back to school sales and, yes, increased demand from China.
Just when Ford was making claims to be the one bright light in American auto manufacturing the healthiest of the Detroit Big Three announces it is recalling 4.5 million vehicles because of a switch that can overheat and catch fire, the Detroit Free Press reports. Ford is recalling 1.1 million Ford Windstar minivans and 3.4 million Ford Excursions, Explorers and Rangers of various model years, going back as far as 1992. The switch was made by a former division of Texas Instruments (the company insists its product is not the root cause of the Ford fires). Whoever is to blame, this latest recall is the eighth involving the same switch for Ford this decade and has affected some 14 million vehicles.
And finally, hedge funds lie. Not all of them, mind you. Just one in five have a tendency to stretch the truth, according to new research by New York University's Stern School of Business. "Managers most commonly misrepresented the amount of money they had entrusted to their funds, their performance and their regulatory and legal histories, according to the research," the Financial Times writes.
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