Obama drives a stake into the heart of New York City - more bad news for property prices

I am shocked that Obama is so populistic. This will cost the US in the long run.

"If you ask me, Claire McCaskill is the idiot. Along with Obama she does not seem to understand that the tax payer money she is talking about acually comes from people who pay taxes."

So F-it, let's give these execs a boatload of money JUST so that they can pay taxes. While we are at it, let's pay teachers, fireman and NYPD $500,000 salaries as well so they can pay more taxes to help the system out. Once these companies start making some money, instead of taking TARP payments, the execs are allowed to make more. These idiots do not deserve million dollar salaries if their companies are going bankrupt without help from the gov.

I know. Let's not place any restrictions on executive pay, or any pay. Let's not give any ailing firm or industry any assistance. Let's just see what happens.

Jake, writers from the NY Times did a pretty thorough analysis of the breakdown of tax payments by income class and the relative burdens therefrom in their excellent book "Class Matters." You should have a look see.

reddog is right on target. I thought Jake's post was a joke. Jake, its crazy to think government money should subsidize these execs who have helped run our country in the ground.

you may not love it but the concept seems correct to me:

if you borrow money from us, we have stipulations. none of that money goes to bonuses, junkets, excessive payouts, etc. if you are not cool with that then don't borrow money from us. every lender (bank, mortgage, dad, loan shark) has their conditions. if you don't like the conditions don't take the loan. nothing is being forced on them. we will see if their true intention is to shareholder value and turning their company around or to the fat paycheck. neither is right or wrong but they have to make that decision.

This sounds good in the press, but, unfortunately, you need top management to turn around these businesses and restore them to financial health to protect the government's investment. If there are no longer any financial incentive, the good people will migrate to Private Equity and Hedge Funds and you will be left with substandard management. A better solution is a long term compensation plan tied to results so the executive's compensation is totally aligned with company performance over a longer term. Where the system failed before is short term bonuses with no claw back when the earnings on which the bonuses were paid went up in smoke with the collapse in the markets.
Hank Greenberg was on CNBC about a month ago and said the govt. strategy to sell off AIG assets was the wrong one. He said they are selling good assets at fire sale prices, because savvy buyers know this and won't pay top dollar. He said the govt's interests would have been better protected by running and building up the AIG business which ultimately would improve the value of the govt's investment, rather than destroying it. I would put my money on Hank's assessment.

all this does is to have all the high achievers leave the ranks of the big banks which rely of govt bailout money, and join smaller firms, buy side firms or hedge funds. This does not mean no one will make over 500k in the future.

500K a year should still attract highly qualified people. Here's the deal, turn a failing bank around, get off govt assistance, raise your salary and be justified and applauded for doing so!

Maraman - i agree with what you say. the pot of gold should wait at the end of the rainbow should they get there.

NYC is screwed. The financial services was the lifeblood of the city. As revenues dry up, taxes will go up even more, and basic city services will be reduced. Crime will rise drastically to pre-Rudy levels.

Which sector is going to pick up the slack? Don't make me laugh by mentioning advertising, fashion, media, or publishing.

"This sounds good in the press, but, unfortunately, you need top management to turn around these businesses and restore them to financial health to protect the government's investment"

Maraman, last time i checked the "top management" that's gonna solve it is the same "top management" that screwed up and didn't even realize till it was too late. believing these guys are "top" anything requires huge amounts of faith.

TARP for the banks (aside form CITI and AIG) was a US Treasury investment in preferred stock. Some banks needed it. Some banks did not. Some were told to take it. Some took it because all the other banks were taking it. Some were also encouraged to 1) buy Bear Stearns 2) buy WAMU 3) to buy Countrywide 4) to buy Merrill Lynch, NAT CITY etc. etc.

All who received TARP inlections are required to pay it back and to pay preferred dividends to the US Treasury. Did Warren Buffett get a better deal on his Goldman investment that Tim Geithner got for the government? Absouletly. Does a preferred investor have legal rights that supercede all other security holders, management and the company's BofD? Maybe in Russia but here, absolutely not. (at least not for the last 220 years)

Anybody want to set aside the politics and chime in on the original point of this real estate thread which is how this effects Manhattan property prices?

Maybe this will be an incentive for the better financial firms to get out of this mess on their own. No more TARP for me, mom.

ok. how about "obama drives stake into the heart of over-inflated nyc real estate prices getting them closer to where they really should be"

Just saw on Bloomberg, Goldman Sachs would like to pay back TARP funds now.

here is the link:
Headline should read "Goldman CEO says "Keep Your Hands Off My Damn Bonuses"

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3xTcf52kEZM&refer=home

reddog, contrary to what you say $500K will not attract qualified people. I have quite a few friends that left the US and work in Dubai/Asai/South America and they all make $2mm plus. You will have the best leave either the country or the banking system. And then see how the bureaucrats that stay behind fix the banks...

"ok. how about "obama drives stake into the heart of over-inflated nyc real estate prices getting them closer to where they really should be""

well said sniper! high housing costs are still the real problem, not house prices going down.

Plain stupid and I'm as left leaning as you come. The talent is already paying 40% in taxes and they'll vote with their feet. I don't know many non-junior people who won't walk if comp is capped at 500k. They'll move somewhere with higher salaries and low tax regimes. This is the end of the U.S. as a global economic power.

We're waiting to see how this pans out, but not hopeful. We'll gladly lose our equity in our property and leave the States for good.

not sure if this post should go in this direction but isn't this what bin laden claimed he was really going for? a destruction of the financial system of the U.S.

Obama will do more damage to NYC than bin laden ever did.

> reddog, contrary to what you say $500K will not attract qualified people.

Amusingly, the same people did work for that amount just a few years back. So, BS claim #1.

> I have quite a few friends that left the US and work in Dubai/Asai/South America and they all make
> $2mm plus.

You haven't noticed that Dubai is tanking? They're cancelling projects left and right. Oil is in the shitter. You think their salaries won't be affected?

> You will have the best leave either the country or the banking system.

They say that, well, every 10 years. And they always seem to find the same mediocre talent year after year, all the kids who couldn't make top law or medical schools. Hell, the bulge bracket was hiring from THIRD TIER SCHOOLS in the last few years. These folks will be super easy to replace when there are no jobs.

> And then see how the bureaucrats that stay behind fix the banks...

Could it be any worse than the idiots who broke the banks in the first place?

Sorry, but Wall Street talent was never really that. The best and brighest have never gone to banking, its the realm of glorified middle managers and the ivy leaguers who couldn't get better jobs. Are you aware of how many top bankers were in the bottom half of their graduating classes?

Are there any mortgage bankers who can answer the question of how much mortgage a buyer can qualify for on $500,000 in compensation? I think at current rates the maximum loan size would be about $1.5mm. But that seems high to me. If so though and with a downpayment of 25 to 30% that would pretty much cap property prices at about $2mm unless you had many more resources saved for a larger downpayment.

Goldman doesn't need the TARP money; didn't they get a lot of the $85 billion in AIG bailout through counter-party transfers?

not my field..but assuming 28% of gross used to pay mortgage. 30yrs fixed at 6% $11,666 monthly pmt equates to a loan amt of $1,945,901

Jake, great question. I am not a mortgage broker, but I just did some quick calculations with the help of the calculators on Manhattan Mortgage website. If you earn $500,000 year, this leaves approx. $10,500 for housing per month if you push the 25% debt-to-income ratio to its max. I think the highest loan available would be a 30 year fixed mortgage of $1,200,000 at 6.375% with no points. Monthly mortgage payment would be $7486, plus maintenance (I rarely find properties in the 6-7 room size with maintenance under $2000/month, and often it is much higher). So with 25% down ($400,000) this would allow you to buy a property at $1,600,000.

"So with 25% down ($400,000) this would allow you to buy a property at $1,600,000."

wow, this is probably the best news for affordability so far.

it might change the whole landscape. 30% of real estate transactions were coming from wall street. well well... i see absolutely no reason for anybody to buy in manhattan until the consequences of this fully kick in. even the low end will be affected by this. are 2008 bonus affected by this or only 2009 on?

the studies I've seen say 2009 bonuses will be worse. Because its not profits that bonuses are based on, it has been revenues. And revenues in 2008 were very big in the first half, and the losses were big but revenues were still going.

In terms of pacing, revenues are set to be way lower this year. M&A down, no IPOs (1 since August), lending down, leverage down.... so bonuses would be lower just for that.

And THEN comes the government stepping in.

"I have quite a few friends that left the US and work in Dubai/Asai/South America and they all make $2mm plus. "

Tell us again about how Dubai will hire away all the underpaid US bankers.....

http://ny.therealdeal.com/articles/middle-eastern-investors-lose-trillions-affect-sovereign-wealth-funds-6

This obama cap is being blown out of proportion in my mind. The reality is that only a number of companies will be subject to this, and in the ones that are, the key is to determine what constitutes a top executive. To me, that's officers of the firm like the CEO, CFO, COO and maybe not even division heads like "head of IBD" or "head of capital mkts." These upper echelon employees are a drop in the bucket. The key issue is whether or not rank and file employees (like VP, MDs, Associates, etc) still get paid close to what they used to be paid. Even if comp is down 50% from 06/07 levels, that is still pretty good pay.

new word of the day: Obamulus - a stimulus plan intended to benefit all geographic areas outside NYC... yippeeeee! Thank goodness I made my three legged Chihuahua vote for him....

I for one am totally glad :). No more competing against my old boss for his classic 8... for old times sake... maybe I'll do a side letter to give him $100K to start a new life as a mariachi player if he gets me "in" on the short sale....

Plz... people.... poop happens all the time... this is when creativity and cash can pay huge dividends :)

Am I the only idiot who thinks these guys DESERVE more than $500k/year?? Fine if I am. I mean, come on! Our future is in their hands. The level of responsibility is mind boggling! I don't care if they screwed up. Plus 100+ hours a week earns you something.

> Even if comp is down 50% from 06/07 levels, that is still pretty good pay

True.... thing is, initial indications say it will continue to decrease. Revenues are down HUGE this year, and the new structures are leaning toward even more attacks on compensation...

I like "Obamulus"

uwsmom, these people don't "deserve" any reward. . . they need to EARN it. A lot of people own there own businesses and work 100 hours a more or week. Maybe we should subsidize their income too? Give me a break!

I'm not talking about a "reward". I'm talking about compensation.

quantam...that is a very disturbing comment....and disgusting to say...I'm sure victims will love you idiotic comment....comparing a terrorist act with taking away money from people....think a little before posting...

thank u uwsmom... i only ask for a $.01 everytime someone uses it :)... it's to help oldbuyer buy Depends :)

Everyone... keep your eyes on the ball... high compensation / stock options is just a side game.... we are in a great point in history to re-configure what our priorities are as Americans... national defense, our standing in the world, healthcare for all(?), education, social security, unions, copyright laws (who thinkz Britney should live off of "Hit ME baby one more time"?), and a more modern streamlined government.... but here we are bailing out a financial system who have begged, lobbied and bought the very hands off approach that is killing them.... it's called BKs... hell I'd buy Citibank for $1.00, then you bid $2... and so on and so forth... it's the American way....

Banker 101... know thy counterparty... it's the reason they don't make loans to the mob.... okay move along people...

GEEEZZZZ... I hate tax season... is dog walking expense deductible if I use the time to check on my property... :( ... how about if I have a $500 dinner and I the words "Commercial RE" is uttered between my lovely wife and myself..... I should just hand this off to Geitner CPA and Partners... :(

is uwsmom married to wallstreethusband?

admin.i think you are on to something. looking forward to hearing the answer.

From personal experience, it would be difficult to live on 500K at a reasonable level. Having said that, when your employer is on welfare he can hardly afford to pay more, and with government handouts you are a government employee and should be subject to a government pay scale.
The talent we are talking about is mediocre at best. Just because they are Wharton or Sloan graduates does not make them superior managers. The mathematical models these geniuses make decisions on are developed to benefit the masters. The art of old fashioned risk management has been lost in the new math.
There is no shortage of younger more ambitious managers who would welcome the opportunity to work for $500K with the potential a future big payoff when their companies get off welfare.

no, uwsmom is married to an attorney. there are tons of execs in corporations who make tons of money regardless of the performance of their companies (or did, until recently, Iacocca notwithstanding). Granted, they weren't so integral to the (hopefully) temporary destruction of the world's financial order as we know it, but it's long been recognized that it kind of sucks to be at the helm of even a floundering ship (think Delta and you've thought right).

Of course, if we'd just go ahead and nationalize the damn banks, we could have Geithner and his little helpers running the whole damn thing.

BTW, I have no warm and fuzzy feelings for the bankers as a group right now, although I count many as friends. The complete and utter disregard for public sentiment shown by those making bonus decisions this year AND last makes me want to puke. And don't even get me started on the guys at S&P with their models, the packagers of the MBSs (can't you just see little elves busily slicing and dicing and selling?), and those hypocritical assholes at Davos years past ignoring each and every call for caution. Still, someone's got to show up at the Congressional hearings to report, and $500K wouldn't be worth it to many people.

I am with Obama, (actually, Tim Geithner was the one behind this), it makes perfect sense. I am about as capitalistic as they come and the "talent" who were responsible for the collapse should be punished if they are receiving GOVERNMENT FUNDS.

And besides, how many people would this effect? Only a few since if you read the article, it says that the cap only applies to bank executives who are taking the second half of the tarp money.

blossom: of course UWSMOM is, she told us a long time ago. You on the other hand, need to say thank you for all the free..priceless advice you got concerning your daughters future abode. Give it a few more weeks before you start shitting in OUR kitchen. You need to earn that right!

uwsmom....what's the matter sweetheart is that husband of yours one of those swinging dicks on Wall Street who thought he was smarter than anyone else? Did he convince you without him the whole department falls apart? Sweetheart I've worked with assholes who even had me believing that they weren't expendable and the department would never function without them; the fact was most were smoke and mirrors and were never missed. Most of those jackasses on Wall Street need a good beating back to reality!

There is just so much misinformation on this board!

1) Top executives at TARP funded companies are CEO, CFO, COO, etc. Between the TARP banks, it would amount to probably less than 50 people. So how exactly does this ALONE dramatically change Manhattan's super luxury market?

2) A person making $500k can qualify for much more than $1.6 million. Assuming no other debts, most lenders will allow up to 40% ratio with good credit. $500k x 40% = $200k/yr in mortgage payments. Back out maintenance of approximately $2,500 a month or $30k a year = $170k for mortgage payments. At 6.5% = $2,400,000 mortgage. Assuming 25% down, it would be a purchase price of $3.2 million. Throw in an ARM rate of 5.5% & you will get a purchase price > $3.7 million. And for the record, most people who purchase homes in this price range will put much more than 25% down, which will further increase the purchase price.

McHale: you're killing me, LMAO.
"Sweetheart I've worked with assholes who even had me believing that they weren't expendable and the department would never function without them; the fact was most were smoke and mirrors and were never missed. Most of those jackasses on Wall Street need a good beating back to reality!"

But I in fact, at one point I worked with this chick that was so smoking hot, when she farted, little singing nightingales came out of her ass and filled the trading floor, awesome!

Huh??? My husband's an attorney. Weirdness!

anon1, what you just outlined is utterly irresponsible. It's just those kind of financial gymnastics that got us into this mess. Besides, show me a coop board in Manhattan that will let you get away with 40% debt to income ratio.

uwsmom says....Huh??? My husband's an attorney. Weirdness!

Same shit both are destroying this country! Sweeheart evidently your quite clueless....BTW ever been with a real man? You know the kind that works with his hands and mind,knows a how to make an honest day work, rugged strong and silent....like Clint?

But I in fact, at one point I worked with this chick that was so smoking hot, when she farted, little singing nightingales came out of her ass and filled the trading floor, awesome!

Did you bang her after a Christmas party after she got s88tfaced....inquiring minds want to know :)

What a jerk.

patient09 - For some reason, I always thought you were female...

awesome...peace

Kas242 - how is it "utterly irresponsible"?

Someone with good credit making $500k & qualifying at 40% = $200k for mortgage & maintenance

That still leaves them with $300k to spend. If you back out taxes of 45%, you would still have plenty leftover. Many people can live within the means of a $300k before tax budget.

And if you had good credit to begin with you, you've demonstrated financial prudence in the past.

Note: Mortgage interest is tax deductible, thus, I didn't discount the entire $500k for taxes just to simplify the example.

Anon10, spoken like a true mortgage broker.

nice work anon10. Your post is proof of your post.

The government is doing some stupid things but a 40% front end ratio is not something even FHA will allow.

Don't be so silly. If you live in New York City and you make $500,000 you paid roughly $150,000 in federal income taxes (unless of course you are in line for a high ranking position in the Obama administration in which case you didn't), $50,000 in state and local taxes, $6,300 in social security taxes and about $10,000 in medicare taxes. Contribute to a 401k for retirement that's another $15,000. Maybe a little health coverage that's $5,000. You take home $260,000. Spend $200,000 on housing and that leaves $60,000. With 1 kid in private pre-school you are eating dog food. With 2 kids in private school you starve. No car. No vacations. No college savings plan. No life insurance. C'mon! Lenders are dumb but these days even they are not dumb enough to let you do that to yourself.

Jake - you are missing a key compenent in your analysis. Mortgage interest is tax deductible. On a $170k mortgage and another $15k for property taxes, nets you about $75k in tax benefits.

$60k plus $75k = $135k after taxes

Most people with a history of good credit can live on that income. And the majority of Americans send their kids to FREE public school.

There are plenty of lenders who do a BACK END ratio of 40% - remember I said assuming no other debts so front end = back end. I've even done some in the 50's%. Of course, they were putting 50% down and had execellent FICO scores.

kas242- I am very proud to have been a mortgage broker for the last 15 years. I have helped countless people achieve the dream of home ownership here in the city. There is nothing more rewarding than seeing the expression of a buyer at closing upon receiving the keys. Yes, many brokers abused the system. But done right (like the path I chose), it can lead to a very satisfying career.

There will be abuses in any occupation. Consequently, it is best not to generalize.

Obama is hot and can do whatever he wants.

"Same shit both are destroying this country! Sweeheart evidently your quite clueless....BTW ever been with a real man? You know the kind that works with his hands and mind,knows a how to make an honest day work, rugged strong and silent....like Clint?"
-------

IN OTHER WORDS, "have you ever been with a loser nobody?"

Silly.

(1) This will literally effect maybe 20 people.

(2) Those 20 people who will be capped by the TARP guidelines are already very wealthy multi-millionaires so a silly reduced salary will not hurt them. Top 5 CEOs don't rely on salaries like you common folk.

(3) Many investment bankers earn more in salary than CEOs.

(4) These CEOs can also receive stock comp on top of the 500k.

desgarcons - It offends me you describe a man who works with his hands as a "loser nobody." I'm a woman who appreciates those qualities in a man.

You sound like a snob.

I guess you also appreciate fighting for the scraps of Louboutins, Prada and YSL on clearance too since that's obviously the only way you and your working class partner could afford to put decent clothes on your back.

I guess you enjoy living in a cheap non-luxury apartment?

I guess you enjoy going on cheap ghetto vacations and flying economy/commercial?

I guess you enjoy eating McDonald's and riding public transportation. Ew, sounds dreadful.

You will never ever experience the luxurious raw hides of Bentley or the exquisite Atelier craftsmanship of Goyard if you keep up with this silly behavior.

Now straighten up that back and watch how I bring them boys to the yard with my milkshake.

sorry uwsmom, I confused you with someone from a thread a couple of weeks ago.

anon10 - it may change, but you need to add back in AMT. a person would be a fool to burden themselves with that kind of debt/income ratio when renting is so much cheaper.

just curious - through all this salary-capping and tax evading cabinet members has anyone found themselves exclaiming:

"god dammit! what a mistake. i could sleep so much easier if i knew that Grandpa McCain was at the helm!"

This conversation is absolutely absurd. The entire US financial system was on the brink of collapse--and is still teetering--so that the government (and the tax payers--all the tax payers) had to step in to the tune of eventually well over $1 trillion to bail out these banks. Then the banks turn around and use the bailout money to fund lavish bonuses that are still in excess of 2005 bonus levels. And some of you think this is reasonable behavior? Republicans believe that lining the pockets of corporate executives is an appropriate use of taxpayer dollars. Apparently President Obama does not. A grownup is now in charge.

These banks should have been much more closely regulated to begin with and they never should have been allowed to get too big to fail. But they did, and we can't let the entire financial system disintegrate before our eyes. Personally, I would have preferred that the government seize control of AIG, Lehman, Bear, Citi, Merrl, Wachovia, WAMU, and Morgan Stanley and that the shareholders should have been wiped out and the companies recapitalized and reorganized. If JP Morgan, Goldman, Wells, and BAC could have survived without bailout money, then fine. But if they would have gone bankrupt with government guarantees and infusions, then sorry, the shareholders should have been wiped out there as well.

Given that we did not go that direction there is a clear responsibility for the government to protect its investment. We need to ensure that we can get paid back--that all this money doesn't disappear into a back hole of executive compensation and other boondoggles. I am just thrilled with this and pretty shocked that the Democrats didn't insist on getting it into the original legislation.

As for high end Manhattan real estate, yes, it's dead. But it was dead long before this. And just so you know, the vast majority of New Yorkers and Manhattanites and even affluent Manhattanites make far less than 500k per person. And remember this: this is not a household limit but an individual one, it only applies to certain executives at certain companies on the brink of failure, and there is a huge loophole for long-term compensation in the form of deferred stock. All this hyperventilating about the end of the US as an economic power is just childish. George W. Bush did his best to destroy US political and economic might, but he did not succeed, and with our new, competent leadership provided by the great Senator McCaskill, President Obama, and others, things will eventually turn around. Not by providing Corporate CEOs with taxpayer-funded bonuses.

anon10, shoe horning borrowers into properties they could not afford is one of the key drivers of the housing crisis. Leveragigng a borrower who as aboutready points out are right in the wheelhouse of AMT to the nth degree of the tax code lacks good common sense, is irresponsible and pushes the edge of common decency.

On your other misinformation about who is effected by the Obama plan there are over 300 companies that have accepted TARP money. The Obama limit applies to all companies (finance, atuo or other) that receive any help including those that have received assistance already. True it is imposed on only the highest ranking executives. but the number is not 5 and is not 50. And believe me, in this environment no comapny's Board of Directors is going to approve bonus payments in excess of that for anyone.

jake, if you are right then GOOD. lower executive pay is a bad thing?

The $500K comp limit (ex-restricted stock) is probably not a huge problem this point as many of the affected finance firms are simply trying to survive or at least stabilize. As jake stated, most of the BOD don't have the guts to approve anything lavish, not with the Feds as active as they are.

A greater concern IMO would be the enormous amount of regulatory changes that will be coming to a finance institution near you perhaps as early as 2009 and most certainly by 2010. Over reaching federal regulations can do far more damage to this industry than any temporary compensation cap on a relative small number of executives.

The model developed in finance compensation over the last 20 years is untenable. It is unraveling. The model of US finance is unraveling. This little tip to the populist outage by Obama is nothing compared to the restructuring that is coming (most of it NOT from government) in the next 10 years. The miners dug to deep, too greedily, and the place collapsed on them. The mine and miners will never be the same.

The $500k limit is for the top 5 executives at the firm, despite all of the crying from Rush and Compnay. It is 5 people at each firm....not tragic.

HR, right now financial institutions need to deleverage and re-capitalize. They do this in 2 ways. 1) selling assets and 2) making money. Aside from the government injections there is no where to turn for capital raising. The Fed will keep rates low and the curve steep so that they can make money. Compensation is a large expense. Capping compesation will help them make money. Reducing dividends will allow them to retain earnings and recapitalize. Hopefullly to the point where they can retire the Government's preferred shares and learn to stand on their own again.

Despite the very large 4th quarter charges the surviving companies you mention all made money in 2008. These surviving companies all were strongly encouraged to take on the weaker links. Thain ran to BofA after he saw the way Geithner and Paulson botched the Lehman situation. JPM took on BS and WAMU to help out the government. Same is true for Wells and Wachovia, Nat City/PNC and on and on. Yes, despite the bonus compensation and contrary to what the main stream media and Claire McCaskill would have you believe these companies are making money and are not bankrupt.

and type3, what does this mean for manhattan property prices?? anyone?? buelher?? anybody??

would people be happy if the whole world just fell apart? goodness! stop with the doom and gloom. I was watching the news briefly this morning, and it is no way to start the morning. How about some good news people?

Good news = Pelosi is finally in the hot seat ;)

Good news = Cheney back in the news.
Doesn't he just give you that warm "everything is gonna be alright" feeling?

Good news: According to Pelosi, 500 million Americans are at risk of loosing their jobs. I think most of us can guarantee, that a tiny fraction of that number are at risk of doing do.

And I do believe that at the end of the day, most everyone will be just fine.

waverly,
"The $500k limit is for the top 5 executives at the firm, despite all of the crying from Rush and Compnay. It is 5 people at each firm....not tragic."

I am sorry. You are wrong. Please check your facts.

And you won't be happy if Claire McCaskill has her way:

Sen. Claire McCaskill, D-Mo., has proposed that no employee of an institution that receives money under the $700 billion federal bailout can receive more than $400,000 in total compensation until it pays the money back. Her figure is equivalent to the salary of the president of the United States.

http://wcbstv.com/politics/executive.pay.limits.2.927082.html

"and type3, what does this mean for manhattan property prices?? anyone?? buelher?? anybody??"

It means there will be far less money in NYC to prop up prices. This has nothing to do with Obama. This train left the station a while ago, and its momentum is high. IMO, prices this summer will be jaw-droppingly lower.

Sniper, that warm feeling is your blood pressure justifiably rising at hearing the word "Cheney."

i thought it might be from that candy I took from Mrs. McCain's purse.

jake,

no employee of a firm receiving tarp money SHOULD earn more than 400k. i'm with claire. enough of this shit. you yourself make the argument:
"Capping compesation will help them make money. Reducing dividends will allow them to retain earnings and recapitalize."

exactly! capping compensation will help these companies make money. if they make money, they can pay the government back and get back to the business of enriching their managements at the expense of shareholders. the government needs to cap compensation and restrict dividends in order to keep capital in these companies and to make sure that they are able to pay us--the taxpayers--back.

as for whether these 'surviving' companies are bankrupt, well, obviously they aren't. bankruptcy has a specific legal definition. a finance company cannot become bankrupt and survive, so by definition if they survive they are not bankrupt. that does not mean that without government intervention they would be able to survive as ongoing concerns.

Jake -

(From AP) The limit would apply to top-paid executives at the most distressed financial institutions that are negotiating bailout agreements with the federal government. It also would apply to other banks that receive aid, but they could get around the limits by publicizing to shareholders plans to exceed the salary cap.

The limits would not apply retroactively to any bank that received money from the first half of the $700 bailout allocated by Congress. For example, the restriction would not apply to such firms as American International Group Inc., Bank of America Corp., and Citigroup Inc., that already have received such help.

Firms that want to pay executives above the $500,000 threshold would have to use stock that could not be sold or liquidated until they pay back the government funds.

Generally healthy institutions that get capital infusions from the Troubled Asset Relief Program in the future will have more leeway. They also will face the $500,000 limit, but the cap can be waived with full public disclosure and a nonbinding shareholder vote.

Obama said that massive severance packages for executives who leave failing firms are also going to be eliminated.

Other new requirements on "exceptional assistance" will include:

_The expansion to 20, from five, the number of executives who would face reduced bonuses and incentives if they are found to have knowingly provided inaccurate information related to company financial statements or performance measurements.

_An increase in the ban on golden parachutes from a firm's top five senior executives to its top 10. The next 25 would be prohibited from golden parachutes that exceed one year's compensation.

_A requirement that boards of directors adopt policies on spending such as corporate jets, renovations and entertainment.

The administration also will propose long-term compensation restrictions even for companies that don't receive government assistance, Obama said.

Those proposals include:

• Requiring top executives at financial institutions to hold stock for several years before they can cash out.

• Requiring nonbinding "say on pay" resolutions — that is, giving shareholders more say on executive compensation.

• A Treasury-sponsored conference on a long-term overhaul of executive compensation.

The $500k cap is for the top 5 executives.