Goldman compensation pool down 26% this year

The poor little lambs. How in the world are they going to survive on $400,000 (average, per person) a year? Goldman is also looking at outsourcing HR and other non-revenue generating functions to help the bottom line. Won't it be interesting to see when the traders themselves eventually are outsourced? They are hardly the invaluable experts that they think they are.

Wall Street traders, who typically receive the fattest year-end bonuses among bank employees, are poised to suffer the biggest pay cuts as revenue at their divisions dropped an average of 12 percent so far this year.

Goldman Sachs Group Inc., the New York-based bank that makes most of its money from trading and set a Wall Street pay record in 2007, slashed average compensation 26 percent in the first nine months. By contrast, Charlotte, North Carolina-based Bank of America Corp., which employs branch managers and brokers as well as bankers and traders, raised average pay 10 percent.

While some compensation consultants say traders’ pay will rebound as soon as revenue recovers, new regulation and capital requirements may lead to sustained reductions in the multimillion-dollar awards that sparked popular outrage and spurred investigations by politicians and regulators after the 2008 financial crisis, analysts say.

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Shoppers are buying

It's a long way from the pre-crisis mood though it's an improvement. I ventured out to complete my own Christmas shopping and was shocked at how many extra (unannounced) discounts were available on top of existing discounts at outlet stores. Retailers must be happy.

Although the majority of retailers are reporting better-than-expected October sales, there have been some notable pockets of weakness as weather hampered sales of seasonal merchandise at some retail chains.

However, some retailers posted monthly sales gains that far exceeded analysts' estimates, showing that consumers are increasingly willing to spend when the mix of products is right.

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What to look for next

Now that we're fully post-election, it's time to take serious stock. I'm personally waiting for one last move, with no firm decisions yet. But I do know that the time for firm decisions is fast approaching. Almost all of the players have put their cards on the table. It's time to deal with what will soon be in front of us.

Some data points on what to look back at, and forward to:

1. This from Jane Hamsher, on what to look back at. It's about which Dem messages polled well, and which didn't (source, Greenberg & Carville; her emphasis):

Greenberg and Carville measured the “shift” when respondents were read different messaging. The greatest “shift” came when respondents were read the first and second messages, about standing up to corporations and Wall Street, protecting Social Security, and opposing “free trade” agreements. After hearing those, there was a net shift of +9 toward the Democrat.

On the other hand, the “blame Bush,” “go forward, not backward” and “the economy is showing signs of progress” messaging — the principle messaging being used by Obama and the DNC for the past year — resulted in a two point shift toward the Republicans ... Let’s say it again. The messaging being used for the past year by Obama, as head of the Democratic Party, results in a two point shift towards the Republicans.

She doesn't draw conclusions, yet. Nor do I. But for me, that time is fast approaching. It depends on what happens in the coming lame duck session (see below).

2. The Lame Duck for the Ages — I'm very interested in what happens in Congress this December; the result should be determinative. The Dem promise list has grown long — it includes repealing DADT, holding the line on Social Security "reform" for us Little People, no tax cuts for the Barons, and a number of other issues important to any self-styled Democrat. These will be the last cards from any of the players to hit the table this cycle. I think we need to lobby hard for what we want. And then we need to act on what we see happening.

I think this will be Obama's Watershed Moment. Jane again:

Yesterday in his press conference, did Obama say he’ll protect Social Security and Medicare? They weren’t actually mentioned.

Did he say he’ll stand up to corporations and Wall Street? No, he said he was worried that “business took the message that, well, gosh, it seems like we may be always painted as the bad guy. ” He said he was “talking to CEO’s constantly” and that “a whole bunch of corporate executives are going to be joining us” on his upcoming trip to Asia.

As said, our president will play his last cards in the Lame Duck session. I don't want to guess what he's going to do. He deserves the opportunity to do it, openly. And we deserve the chance to watch him do it, then respond.

3. And there's this from Ian Welsh; I haven't seen this point made elsewhere lately:

[If Obama is not challenged from the left,] liberalism will be discredited for at least a decade, time America cannot afford, since liberal solutions work and conservative solutions, whether pushed by right wing Dems or Republicans, don’t.

There's more, including a recommendation. I'm not endorsing his recommendation; I want to see the Lame Duck first. But you could argue that the statement above is correct on both counts — If Obama goes down at the hands of the Right, Liberalism as a solution will be the loser. And time is fast running out. As John notes, the right-wing inoculation of the administration against attack from the left has begun, one day after his losses.

Progressives need to decide in the next few months, while the nation is drowsy from egg nog, how to respond to the two years we just watched. It's that or stay in short-term reaction mode. Our call, I guess.

Note: We don't need a plan in the next few months; that comes later. But we do need a goal by then. The good news is, there aren't a ton of choices, goal-wise. Shouldn't take forever to sort through the options.

Let the Lame Duck begin. Let the discussion soon follow.

GP Read the rest of this post...

Yahoo News confirms disproportionate drop in gay vote support for Dems

I noted this last night, Yahoo News now confirms it.

After reviewing the full data, Sherrill says there was a disproportionate drop in Democratic support among LGB voters compared to Hispanic, black, and young voters. Though the sample size is still very small and thus there's a large margin of error, Sherrill now says the drop may be attributed to "dissatisfaction with the pace of change on LGB rights over the past two years."

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Stiglitz: Economy isn't going to get better for years

Let's cut federal spending, that ought to help.

Yahoo Finance:

DailyFinance: Over the last three years, the U.S. economy has experienced the worst crisis in decades. Is the worst over?

Joseph Stiglitz: No. You might say the worst if you thought of the worst as the immediate weeks following the collapse of Lehman Brothers where we didn't know where the bottom would be; we've pulled back from the brink. But in terms of most Americans, the question is, are they likely to be able to get a job? One of six Americans who would like a full-time job right now cannot get one. Are things going to be better than that in the next year or two? The answer is probably not. It might get a little better, but there's also a substantial risk that it could get worse.

Do you anticipate a "double dip" recession, where the economy returns to two consecutive quarters of negative growth?

I think there's a possibility, but in some ways that's not the key issue. The key issues for most Americans are two-fold right now. One is, is it likely that the economy will be growing fast enough to create enough jobs for the new entrants to the labor force so that the jobs deficit gets reduced? The answer is almost no one sees growth in 2010, 2011 and even into 2012 at that rate. So we are going to maintain this gap of 15 million unemployed, 26 million Americans who would like a full-time job that can't get one. That situation is likely to be maintained. And it is possible that it might get a little worse; it might get a little better.

The second thing that is weighing down on most Americans is the threat of losing their home. The fact is that one out of four Americans with a mortgage are now underwater. They owe more money on their home [than the value of their home]. The bubble in the housing market crashed in 2007, and we're beyond three years now since that happened and there is no recovery in sight. The housing market might get a little better. There's a greater likelihood it will get a little bit worse. But going back to where they can say their home is their reserve for retirement or paying for college education? The likelihood of that happening is just very low.

See full article from DailyFinance: http://srph.it/9vvIt3

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Independent voters want another stimulus

Should have thought about that before you voted for the crazy people. Things are going to get a lot worse once the Republicans start cutting federal spending in the middle of an economic malaise, which ironically is the second choice of indie voters - ironic since cutting federal spending is an anti-stimulus.  But Democrats didn't want to explain to voters that the stimulus was more important than cutting the deficit - the President caved on this issue publicly months ago - so the public is understandably confused, and our economy will suffer as a result.

All of the issues Joe and I gripe about on a daily basis, they have consequences.  That's why we gripe about them.  Not because it gives us any joy to beat up the guy we supported in the presidential primaries.  But rather, because we know that bad decisions come back to bite you.

From Gallup:

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If the public is right, then Obama is a socialist Muslim from Africa

Just because people believe something, doesn't make it so. The challenge for Democrats following the election debacle isn't polling the public on what it wants, and then doing it. It's figuring out why the public believes what it believes, and then acting accordingly.

For example, far too many Americans believe Obama to be a Muslim who wasn't born in America. Just because they believe it, doesn't make it so. The solution isn't for Obama to publicly convert to Christianity and renounce his "Kenyan citizenship." Rather, we need to figure out why too many people still believe that the President isn't an American or a Christian. And the problem is likely one of messaging. GOP messaging, to be exact. They're good at it. Our guys kinda stink. That's why an overwhelming number of Americans still think the stimulus didn't create or save even one job, when we know from CBO that it created or saved 2 to 4 million of them.

Same goes for the "Obama was too liberal" meme that the GOP keeps spouting. Obama wasn't liberal at all. And we now know (and many of us already knew) that no matter what Obama did, the GOP would still brand him as "liberal." (Just look at the recent comments from the Republicans that Obama never once reached out to the GOP when crafting even a single bill. It's an utter lie. Just look at the health care reform debacle when the President ceded authority, forever, to the Gang of Six. Or climate change, when he invited Lindsay Graham in from the beginning. Or when he cut the stimulus in half, then cut it another $100bn, then gave away 35% of the remainder in useless tax cuts, all in order to woo GOP votes.) No matter what the President did, policy-wise, the GOP claims the opposite, and often convinces the public that it's true.

So no matter how hard Obama tries (hypothetically) to move to the middle (or the right), the GOP will still brand him as a socialist, and they'll likely win. So the solution isn't always to change your policies, it's sometimes (oftentimes with the current crop of Democrats in town) to change your messaging. Read the rest of this post...

Adam Green debates Tom Daschle: Were Dems too liberal or not liberal enough?

Daschle says it wasn't about whether the Dems were liberal or conservative enough, it was all about the economy. Right. And the economy was so bad because the Obama administration refused to push for the larger stimulus that it knew was needed. Had we gotten the $1.5 trillion we needed, unemployment might have been two points lower. And had we not gotten the full $1.5 trillion, we could have blamed the GOP for the current 9.2% unemployment. Read the rest of this post...

McConnell: We'll defeat Obama with repeated attacks on health care

I'm glad the President didn't make a serious push for the public option, otherwise the Republicans might try to repeal it and deny it funding. Oh wait...

"On health care that means we can - and should - propose and vote on straight repeal, repeatedly," McConnell will add. "But we can't expect the president to sign it. So we'll also have to work, in the House, on denying funds for implementation, and, in the Senate, on votes against its most egregious provisions."

The administration had better fire whoever is in charge of its messaging, and hire someone who actually knows how to sell things in this town and this country. If they think health care reform is the be all and end all, then prove it to people. Because they haven't so far. A point we've been making for a very long time. Read the rest of this post...

CNBC: So Long, Tim Geithner

He's survived so far but will the election results force the issue? Outside of the White House, it's hard to find anyone who was impressed with the financial regulation, which still lags behind the FDR regulation.

There will be heavy pressure from within the Democratic party for the Obama administration to make changes that will both publicly mark a change of direction for the administration and privately send a message to party insiders that the White House is accepting its share of the blame for the loss of the House of Representatives.

Geithner is a clear candidate to play the fall-guy. In exit polls, six in 10 voters said the economy is the nation's No.1 problem. Around four in 10 believe their family's financial condition got worse since Obama took office. Geithner is the nation's chief economic official. A large share of the blame for last night's results will likely fall on him.

Geithner outlasted many other economic advisers to the president, including Peter Orzsag, Herb Allison, Steve Rattner, Larry Summers and Christina Romer. Insiders say the role he played in getting Congress to pass the financial reform bill has significantly strengthened his position in the administration.

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Thursday Morning Open Thread

Good morning.

The President doesn't have any public events on his schedule today. He's got a cabinet meeting in the morning and lunch with Biden. I suggest they discuss shaking up the White House staff and getting some new voices inside. What they've been doing isn't working. Many of us have been saying that, but Tuesday should have driven home that point.

Mitch McConnell is going to give a speech today at the Heritage Foundation. He'll reiterate that the top priority for GOPers is to defeat Obama in 2012. Yep. People thought they were voting on the economy and jobs. But, to the GOP, there's only one job that matters: Obama's. For the next two years, McConnell has 47 members of his caucus now. He will need 13 Democratic Senators to pass Republican proposals. How often will he get them?

And, let's hope the House Democrats are working up a "motion to recommit" strategy. When the Republicans were in power before, Democrats rarely used that procedure to thwart them. But, it was a favored trick of the House GOPers for the past four years. The Republicans used those motions to divide. Dems could actually use them to show how the GOPers don't really care about working people and job creation. Drive the wedge between the GOP's corporate masters and the teabaggers.

Lots going on as we sort through the post-election mess... Read the rest of this post...