Things are heating up for Phibro's Andrew Hall and the new pay czar Kenneth Feinberg. The New York Times added more fuel to the fire with this piece:
http://finance.yahoo.com/banking-budgeting/articl…
Clearly, Hall is contractually owed the money. However, I'm having a hard time seeing how the government is going to let a $100 million bonus to one guy slide when they had a fit over AIG paying out $165 million to over a hundred people. You might make the case that AIG was an extraordinary circumstance because they received more TARP money than anyone else, but guess who's #2 on that list?
That's right. Citi.
I think this would make for an interesting WSO poll if Patrick wants to set it up. Will Hall ultimately pocket $100 million, or will the government abrogate another contract and screw him?
...just put the poll up.
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Sounds like he made Citi $2 billion over the past 5 years.
Your second question is a bit harder to answer. Ten years ago, the answer would have been none. But back then the banks were just starting to get busy in the commodity manipulation business. According to Matt Taibbi (who I'm inclined to believe despite his poor reputation among members of this forum) Goldman got the ball rolling for themselves and a handful of other major banks in the early 90's by receiving a "bona-fide hedger" exemption from the CFTC.
This provided exempted banks with an E-FUCKING-NORMOUS advantage over other market participants, including other bona fide hedgers (like Exxon, Chevron, etc...). With relaxed margin requirements, the banks were able to plow far more money into the market than any other speculators and could conceivably (read: almost definitely) drive prices one way or the other.
The WSO Guide to Understanding TARP
I had to vote "No" in the poll, meaning I don't think he'll get his contractually obligated bonus. I hope to God I'm wrong. I just don't think the government will let it happen.
Feinberg needs to prove that he's the man, and fucking over Hall is a pretty easy way to do it. Let's face it, Johnny Lunchbucket isn't going to lose any sleep over Hall getting cheated out of $100 mil.
The WSO Guide to Understanding TARP
Is this the guy who ran Citi's Crude operations in Europe? He had a losing position for 2-5 years, as he was shorting Oil, then finally cashed in his position when Oil went to 118?
If so, he should most certainly receive his money, since I beleive his bonus negotiated in Early 2008, well before shit hit the fan for Citi, TARP, Obama taking over effing everyone.
Edmundo, who would lose sleep over him not getting 100 million? He's probably gotten millions and millions in preceding years. I'm sure he's probably not even losing that much sleep over it. Obviously we would all like to be in his position, but in truth none of us know the details, and I doubt anyone outside of 20 people at phibro know the details. I for one hope he doesn't get it. If he was any kind of smart, he would've reduced it to something reasonable and taken 25 or 35 million. Who needs that much money if its gonna cause a shitstorm of this kind of proportion. With all the money he has undoubtedly banked already, how many more mansions does this guy need?
Just my two cents.
It's no different than the revolution. It would've been easy to say, let's not cause a fuss, let's just pay this measly little stamp tax, but we didn't, did we? I don't see any difference here.
Really? Relating this to the revolution of the US? That's pretty ballsy. I just think its kinda funny that this guy (who by all accounts I've read in his profiles is a huge douchebag who doesn't give away his hundreds of millions but spends it on 12 million dollar pieces of art) is getting sympathy from this board.
Like it or not, he's owed the money. Whether or not you approve of how he spends it, the firm is still contractually obligated to pay him.
That is why it is nothing short of a crime if the govt steps in and abrogates the contract.
The WSO Guide to Understanding TARP
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