UBS to change executive pay model and no bonuses for board

Phil Gramm's UBS has been one of the hardest hit banks in this crisis, writing down tens of billions. Back home in Switzerland, this has been an enormous blow both financially as well as psychologically because the bank had become so large globally and a real source of pride for the Swiss. The pay model that they are moving to is one that has often been mentioned as a possible model for Wall Street. Instead of paying out massive sums right away regardless of whether they're pulled from the books or not, this will spread out payment over a three year period. That's a good start though I still think five years, if not longer, makes more sense. After this disaster we really need to do a lot more to make bad business not pay, so this move by UBS is a welcome change.

Starting from 2009 UBS top managers' bonuses will be blocked for at least three years instead of being paid immediately.

Managers will receive variable compensation if UBS results warrant.

"UBS takes the shortfalls of its current incentive system seriously and is revising its variable compensation model for the 2009 fiscal year," the bank said in a statement.

"UBS is fully committed to taking its responsibilities seriously and correcting previous errors" Bankers' pay at Switzerland's top banks UBS and Credit Suisse has been the subject of hot debate in the country and almost a thousand people took to the streets of Zurich on Saturday to protest against what they see as bankers' inflated salaries.

Some major European players like Deutsche Bank have already said they will cut bonuses this year.

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Great list of commitments from Obama on his civil rights page at Change.gov

Reader Heidi tipped us off that nearly half the page is dedicated to the civil rights battle of gay and lesbian Americans. Not too shabby. Of course, our job is to hold him to his commitments, blah blah blah, and that's true. But coming out of the box with a strong commitment to all of civil rights is a very good thing. He includes a great quote:

"While we have come a long way since the Stonewall riots in 1969, we still have a lot of work to do. Too often, the issue of LGBT rights is exploited by those seeking to divide us. But at its core, this issue is about who we are as Americans. It's about whether this nation is going to live up to its founding promise of equality by treating all its citizens with dignity and respect."
-- Barack Obama, June 1, 2007

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Andrew Cuomo calls out Citi execs

"Disturbing" is merely scratching the surface. This is one of the most revolting periods in Wall Street history and yet somehow there is not yet a unanimous acceptance on bonuses. Some of these bastards actually think they are deserving of a bonus. Funny how differently we can see the world and the two Americas indeed still exists, as sickening as it is.

New York Attorney General Andrew Cuomo says Citigroup executives should forgo their bonuses this year after the company announced massive layoffs.

Calling the layoffs of 53,000 people "disturbing," Cuomo says top executives shouldn't get bonuses while investors, taxpayers and employees suffer.

Cuomo adds that other companies should consider doing the same, including American International Group, which has received billions of federal bailout dollars.

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Citi cutting 53,000 employees

It's even worse than expected, but then again, this company has been and remains a mess. Never mind though, because Charles Prince is still sitting on hundreds of millions or dollars made from selling trash. Heaven forbid he's asked to pay back anything because that would be against his work contract. The lesson learned here is that you can drive a company into the ground and profit from garbage, force taxpayers to bailout your company and never be held accountable at all. Ever. Great work, when you can get it.

Citigroup Inc. is cutting approximately 53,000 more jobs in the coming quarters as the banking giant struggles to steady itself after suffering massive losses from deteriorating debt.

The plans, posted on the company's Web site, are being discussed by CEO Vikram Pandit at the company's town hall meeting in New York Monday with employees.

The company said total headcount is being reduced by 20 percent from its peak of 375,000 at the end of 2007; the company had already announced in October that it was eliminating about 22,000 jobs from those levels.

The New York-based bank has posted four straight quarterly losses, including a loss of $2.8 billion during the third quarter.

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"The Mormons are particularly vicious homophobes"

From Andrew Sullivan:

I have never done anything - nor would I do anything - to impede or restrict the civil rights of Mormons. I respect their right to freedom of conscience and religion. In fact, it is one of my strongest convictions. But when they use their money and power to target my family, to break it up, to demean it and marginalize it, to strip me and my husband of our civil rights, then they have started a war. And I am not a pacifist....

[T]he Mormons are particularly vicious homophobes. Gay people are rendered invisible, their personhood erased in this church. The cruelty the Mormon church inflicts on its gay members is matched only by the Mormons' centuries-long demonization and hatred of black people. That African-Americans would seek common cause with a church that only recently still believed they were the product of Satan shows how profound homophobia can be. But this shared hatred can be exploited by the Hewitts and Romneys of this world. And what we have just witnessed is a trial run for much larger ambitions.

If we don't resist this now, we will not be able to resist it later.

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Lieberman made Harry Reid cry so he gets to keep his committee chair, reportedly

That the gist of the late-breaking news from MSNBC, saying that Dems have reportedly decided to let Lieberman keep his committee chair, provided he gives up his subcommittee (not totally clear why that matters). The turning point in the saga was supposedly two things. First, that Obama wanted Lieberman to stay in the caucus. And second, that Lieberman threatened Harry Reid that he'd walk and join the Republicans.

Yes, Lieberman threatened that he'd join the minority instead of the majority, making his remaining years in the Senate emasculating, powerless and unimportant. Gee, no briar patch available?

Not to mention, since when wasn't the potential for Lieberman to walk and join the Republicans a possible expected outcome? That's not news, so it shouldn't have influenced the debate. Read the rest of this post...

Fed survey says recession started last spring

This pretty much confirms what people in the real world already knew. Warren Buffet had been saying this for a while and the right - knowing that this would destroy their hopes of clinging to power - dismissed such talk as nonsense. I work with Global 5000 companies and could see this coming for a while so the only surprise was that it took this long to be recognized. In the second half especially, corporate spending has collapsed, going dry for much of September and October. While in Barcelona the other week I met others with similar target clients and the story was the same everywhere, that spending was terrible and business slow.

In this new Fed survey the story is that this recession will last for around 14 months. Hmm. While I am dreaming of such a fast recovery I'm not seeing it. The last Bush recession was around two years and this one is so much more serious and much deeper. Every time there's a new prediction of the end being near or telling us about how it won't be as bad, it gets worse. When housing first started going down there was no shortage of stories about how short this would be. Guess again. When the banks started to falter earlier this year, it was pitched as short term and not too much of a problem. Uh huh. When I look at the massive job cuts being announced every day, to me, this is a sign of the corporate world throwing their hands in the air and hunkering down to get through this rough patch. Many of them had been holding off for a while, hoping to get through but are now giving up.

If this recession is over by next summer or even the end of 2009 we will be very fortunate and I will be the happiest person on the planet. Unfortunately, I just don't see it. (True to form, the architect of this mess still thinks he was right and everyone else is wrong about this crisis.) Even when we come out of this, without something bold (and I hope something is in the works) the economy may be looking at extended slow and minimal growth for a few more years. Read the rest of this post...

Catholic cardinal of Baltimore calls Obama "aggressive, disruptive and apocalyptic"

Clearly, Obama doesn't know his place.

You have to listen to this, especially when he talks about Obama's "clenched jaw" like it's the mark of the anti-Christ. Why do so many religions have to be run by such angry people.

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The Next RNC Chair: Captain Of The GOP Titanic?

From Tom Edsall at Huff Post:

GOP aspirants [to head the RNC] face the possibility of a nightmare scenario: taking the helm of a party so weighed down by doctrinaire hard-liners and hectoring moralists that no one, especially an RNC chair, will be able to change course and avoid a tsunami of culturally disinhibited, secularizing 'creatives,' Hispanics, African Americans, and a young netroot-savvy demographic cohort larger than the Baby Boom....

The single largest block of Republican votes is made up of conservative white Christian evangelicals, who cast 4 out of every 10 ballots McCain received. These voters are overwhelmingly anti-abortion; they see homosexuality as a sin and as voluntary; many believe that women are subordinate and obliged to submit to the authority of men. These deeply held beliefs are increasingly out of tune with an electorate that has, in the main, come to terms with the sexual and women's rights revolution. Such trends are one of the reasons that the only age group McCain carried is people 65 and older - the voters who will die soonest....

With the near elimination of GOP moderates from the House and Senate, the short term direction of the party on the national front will most likely be determined by its conservative wing.

House Republican Leader John Boehner, no slouch on the ideological front (100 percent rating from the American Conservative Union in 2007), faces a challenge from the right for his leadership post by California Congressman Dan Lungren, whose appeal to a broad electorate was demonstrated in the 1998 California gubernatorial contest when he lost to Gray Davis by 1.46 million votes, 39-59.

Nothing is set in stone. I remember back in 1992, when I worked for Ted Stevens, Republicans thought it was the end of the world when Bill Clinton got elected. They were in the minority in the House and Senate, and now lost the presidency. They'd never recover, they thought. They did recover - in only two years. So anything can happen. But. I've felt for years that the GOP was boxing itself into a corner with its coddling, and feeding, of the religious right. First off, these are very nasty people. They spin a good tale about family values that resonates with the American public on its face, but all you have to do is scratch the surface of these folks and their inner nutjob is all-too-easily revealed.

At their core, the religious right is run by angry, mean, arrogant and backward people. Just look at their leaders (far too many of whom bear a striking resemblance to rather fey, closeted gay men). Look at their spokesmen (ditto on the gaydar front). Their message might work in the deep South. But as the Edsall piece illustrates, the deep South has already fringed itself nicely. thank you. The phrase big fish in a small pond comes to mind. Well, big nasty self-important fish that nobody likes.

So, yes, we still have battles to fight against the bigoted Mormons, and in many a civil rights battle. But the Mormons, like the Republican party, sucked up to a losing team. And in the long run, it's going to bite all of them in the ass. Read the rest of this post...

Obama meets McCain. Aw-kward.

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Rupert Murdoch rips media, blames them for own circulation problems

Interesting and perhaps some truth to what he is saying. That said, he conveniently forgot to address the collapse of News Corp stock, down over 66% from its 52 week high, plummeting profits, lowered outlook for the future, declining advertising revenue and management problems related to who will take over when he dies or retires.

Funny how a few little hiccups can be overlooked by the genius. Ahh, I'm sure he was about to address those issues but was called away for some sort of emergency. It's a mistake that could have happened to anyone. Read the rest of this post...

Wanda Sykes is proud to be gay

"They pissed off the wrong group of people."

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Al Franken will meet with Senate Dem. Leaders tomorrow

Al Franken, who is awaiting a recount in his Minnesota Senate race, will be in Washington tomorrow:

Although he doesn't have a seat, Al Franken will have the floor Tuesday when he meets with Democratic leaders in the U.S. Senate.

Franken, who is locked in a mandatory recount of the Nov. 4 balloting with Republican incumbent Sen. Norm Coleman, will update Senate Majority Leader Harry Reid, D-Nev., and others on the recount process, said his spokeswoman, Colleen Murray.

The Senate leaders and the candidate also will talk about upcoming legislation, she said.

"If he should win this election, it would be irresponsible for him not to get ready to take office," she said. "Minnesota deserves a senator who is ready to take office on Day One."

Also, tomorrow, Democratic Senators will convene to vote on Joe Lieberman's future. That same Joe Lieberman aided and abetted the campaign of Franken's opponent, Norm Coleman. Maybe Lieberman should explain to the Senate Democrats why he was helping Coleman -- and whether he still supports the Republican candidate.

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Newt: Palin is not the leader of the GOP

Newt's sounded a little bitchy yesterday on the subject of Sarah Palin:

“I think that she is going to be a significant player,” said Gingrich during an interview on CBS’s “Face the Nation”. “But she’s going to be one of 20 or 30 significant players. She’s not going to be the de facto leader.”

Too late, Newt. She is your de facto leader. The GOP has no one else. Not even Newt.

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Before Hillary Clinton is named Sec. of State, Obama team is vetting Bill Clinton

Precluding any conflicts of interest from Bill Clinton is one remaining hurdle before Hillary is named Secretary of State:

A team of lawyers trying to facilitate the potential nomination spent the weekend looking into Mr. Clinton’s philanthropic organization, interactions with foreign governments and ties to pharmaceutical companies, a Democrat close to both camps said. While Mr. Clinton has used his foundation to champion efforts to fight AIDS, poverty and climate change around the world, he has also taken millions in speaking fees and contributions from foreign officials and businesses with interests in American governmental policies.

Obama advisers are discussing what Mr. Clinton would need to do to avoid a conflict of interest with the duties of his wife, who is said to be interested in the post. “That’s the first and most important hurdle,” said a senior adviser to Mr. Obama. “He does good work. No one wants it to stop, but a structure to avoid conflicts must be thought of.”

Avoiding conflicts of interest is, of course, important. But, Mr. Clinton should do whatever he needs to do to.

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Monday Morning Open Thread

Good morning.

A new week begins. Could be some interesting developements.

Obama is meeting with McCain today. And, I believe Lindsey Graham is tagging along.

Tomorrow, the Democratic Senators will vote, by secret ballot, on Joe Lieberman's future. Hard to fathom how any Democrat would want Lieberman at the helm of the Homeland Security Committee. Lieberman can't be trusted. Plus, he hasn't even been an effective chair.

By Wednesday, we should have the final vote tally from Alaska. Mark Begich will win. Ted Stevens will be gone. And, Palin's hope for a Senate seat will be dashed.

Who knows what else will pop up.

Let's get threading....

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More major job cuts being announced

Citi CEO is expected to announce major cuts today (20,000? 35,000?) and rival JPMorgan Chase is rumored to be announcing 10% cuts, similar to Goldman Sachs. It's no surprise that the Wall Street giants are adding to previous cuts as it becomes more obvious to everyone that this economy is not going to turn around any time soon.

Adding to previous cuts in an already decimated industry, McClatchy will be slashing another 10% in addition to the previous cuts. What a way to end the year. Read the rest of this post...

Goldman CEO and top execs will not receive 2008 bonuses

Great, that's a start. We better start to see the rest of Wall Street fall in line with similar announcements.

Goldman Sachs Group Inc. CEO Lloyd Blankfein and six other top executives at the bank will not be receiving cash or stock bonuses for 2008, a spokesman said Sunday.

The decision was made by the seven executives themselves, said spokesman Lucas Van Praag, and approved Sunday by the Wall Street firm's compensation committee. The executives made the decision "because they think it's the right thing to do," Van Praag said.

The seven executives include Blankfein; Presidents and Co-Chief Operating Officers Jon Winkelried and Gary Cohn; Vice Chairmen John Weinberg, J. Michael Evans and Michael Sherwood; and Chief Financial Officer David Viniar.

They will receive no cash bonuses, no stock, and no options for 2008 — just their salaries, the spokesman said. Companies typically release compensation figures for top executives in the spring as part of their annual proxy statements.

Last year, Blankfein received total compensation of $54.0 million, according to calculations by The Associated Press — making him the 6th highest paid CEO at a Standard & Poor's 500 company in 2007. His salary that year was $600,000.

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Add Japan to the list

The Eurozone is already in recession and now Japan is there as well. It's doubtful that the US Q4 will manage to squeeze in any positive numbers so we're not far behind. Adding to the difficulties in the US are growing rates of consumer bankruptcy which in turn will trigger more problems for families, personal credit and housing problems. As unexcited as I am about bailing out Detroit, we have to decide just how bad we want things to get. If nothing else, Congress needs to tie the next bailouts much more tightly to management bonuses including at the very top. Read the rest of this post...

You won, now what?

From Taegan Goddard:

Congratulations! The polls are closed, the votes were tallied and you came out on top! With the hard weeks of campaigning barely over, you must remember that the election was not the finish line, it's the starting gun. The tough job of governing lies ahead.

Former House Speaker Tip O'Neill may have said it best: "It's easier to run for office than to run the office."

The reality for today's newly elected officials and their staffs is little different than the fiction portrayed in the 1972 film, The Candidate. Robert Redford starred as an idealist running for U.S. Senate. He never worried much about his campaign promises, because he never thought he would actually win. So when he did, the candidate turned to his manager and asked the question the campaign left him completely unprepared to answer: "What do we do now?"

Like Redford's character, the winners of yesterday's election must now put their campaign promises into action. It's not easy because winning a campaign is very different than running a government. The elected and appointed officials swept into our governments after the elections may find it hard to get the simplest things accomplished. A different approach is needed.

"We campaign in poetry, but when we're elected, we're forced to govern in prose," former New York Gov. Mario Cuomo once said.

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