It was to keep the bonuses up, in order to keep Manhattan Real Estate prices up, in order to keep hedge funds solvent. So, last year's losses had to look like profits. But, since I've largely given up on the idea of a Manhattan apartment's keeping any sort of value, this bothers me less than it would have four months ago.
Update: WaPo has more on this
Wall Street's five biggest firms together paid a record $39 billion in bonuses, even though three of them suffered the worst quarterly losses in their history and shareholders lost more than $80 billion.
Goldman Sachs Group, Morgan Stanley, Merrill Lynch, Lehman Brothers Holdings and Bear Stearns together paid $65.6 billion in compensation and benefits last year to their 186,000 employees. Year-end bonuses usually account for 60 percent of the total, meaning bonuses exceeded the $36 billion distributed in 2006 when the industry reported all-time high profits.
"To many people, it will be shocking and questionable," said Jeanne Branthover, managing director of Boyden Global Executive Search. "People in New York in the world of investment banking will understand it. It's critical that pay is still there or you're going to lose really good people."
Yeah. Wouldn't want those good people off looking for work in Bulgaria. Were the layoffs all of bad people? It seems like you could layoff fewer people if you just didn't give parasitic investment bankers bonuses, and watch them run off to make their fortunes as real estate brokers.