Financial Samurai

Hope everybody had a wonderful Christmas!  We spent time catching up with family and exchanging small gifts.  Nobody went overboard on spending, which is exactly the way we all like it.  My parents have a penchant for re-gifting things from many years ago, and most of this year’s presents are no different.  One of the boxes contained 15 year old polo shirts that emitted a strong scent of moth balls!  I will cherish them forever, or until they fall apart, whichever comes first.

Our family realized early that buying presents for each other was quite unnecessary after we kids grew up.  We therefore made an unspoken pact to gift each other things with no effort or pretense.  In fact, it’s almost become a game as to how much of our used stuff we can offload onto each other!  I gave a couple over-sized shirts from 2003 to my father, and a packet of dried plums to my mother.  We all laughed at our gifts and took some happy photos.

Our idea of Christmas is the reunion of family.  We’re a family that’s constantly scattered throughout the world, and when we get to reunite, we don’t waste much time giving gifts.  Instead, we talk stories over meals, lots of meals that test all our dietary New Year’s resolutions.

May none of you have to go back to the office until Monday, January 4th or work too hard if you do!  We’ll be coming out with some fun short posts for the rest of the year since it doesn’t seem like too many people are around.  Happy Holidays!

Related Post: “Losing Your Way To More Money” (If you want to lose weight, you should read about my 6 month experiment.  Only one thing matters and it’s not exercise!)

Keiju,

Financial Samurai – “Slicing Through Money’s Mysteries”

Follow me on Twitter @FinancialSamura and subscribe to our RSS feed.

What is this blasphemy you say?  One of our main tenets is to observe what people DO with their money, and not what they preach.  The public clearly loves Bank of America and Wall Street again because how else would Bank of America be able to raise $19 billion from us, to pay us back?

In an “Open Letter To Vikram Pandit, CEO of Citigroup” we urged Vik to sell the 34% government stake back to the very public that bailed Citigroup out before year-end. Why?  So Citigroup can pay their employees big bonuses in 2009 by saying they are no longer under the government’s stewardship.  Sure, paying back $45 billion in TARP sounds like a lot, but Bank of America just did it!

In fact, joining Bank of America are Bank of NY Mellon Group, Goldman Sachs, JP Morgan, Morgan Stanley, and State Street who’ve all been able to pay back their TARP loans and pay their people handsomely this year.  This begs the question, what’s wrong with Citigroup, one of my main “go broke banks” used to optimize my finances.

SORRY, I DONNO

Read more…

Wall Street Bull

The following is a guest post by Elaine of Apprentice for Life. Elaine worked on Wall St. for 15 years after business school and provides some interesting thoughts on the much debated topic of Wall Street pay.  Elaine is a self-proclaimed “Lady of Leisure” (LoL) who enjoys traveling the world and experiencing life to the fullest.  I know Elaine personally, and she is one of the best examples of someone who has studied hard, worked hard, practiced good savings and investing habits, and decided to walk away on her own terms.

Please feel free to ask Elaine anything on the topic of Wall St. too, including the getting in and out process!  The topic of Wall St. pay will build steam especially as we head into the home stretch of the year when pay is determined.  Enjoy!

Wall Street Pay Regulation – How to Create a Win-Win Situation

Much has been written and debated over whether the government should regulate Wall Street bankers and traders’ compensation. The proponents and the detractors each have valid arguments to support their thesis. It is all but certain that some form of government regulation will be in place sooner rather than later. At the end of the day, the biggest question remains will the regulations work? The government can mandate certain rules to be met but as we all know, rules can be broken or circumvented. So here are my thoughts on how the Fed can help create a WIN-WIN situation: Read more…

Every now and again, it’s good for the little people to ask the big people for some help.  Our inaugural “Open Letter Series” is inspired by a bank teller friend of mine at Citigroup who lost her job through no fault of her own.  She recently found a new position at a private bank (congrats!) and wishes all her non-executive old colleagues to flourish again.  If you have an open letter idea in mind, please let us know!

Dear Vik,

Tax Payers Bail Out, Tax Payers Buy Back, Repeat, Get Rich.

After collecting more than $45 billion in government support last year, Citigroup is considered by many as the true “Bank of America”.  We the people own 34% of Citigroup, so we were quite disappointed when you decided to jack up our credit card interest rate from 7% to 14% earlier in the year.  We’ve never been late, have always payed in full, and are fully aware the Fed Funds and 10 year treasury yields are at record lows.  What happened to rewarding customer loyalty?  What’s more, you let go of our favorite bank teller at the main branch we went to for the past 5 years.

We’re happy you went on record last Thursday in NYC saying, “Yes, $100,000,000 in bonus money for one of your employees is too much.” However, we’re then disappointed you proceed to say “all the noise will disappear” if you continue “executing your strategy.” Trust us, as long as our credit card rate along with millions of others is usurously high, and as long as we still own a large chunk of Citigroup, the noise will never go away.

Our advice to you is quite simple Vik. First, just pay Andrew Hall his $100,000,000 in stock that vests over a 10-year period.  You know a contract is a contract and you’re going to pay him anyway despite what you were quoted earlier.  Suddenly, his bonus “only” looks like $10 million a year and critics will be tricked into appeasment.  In ten years, Andrew will probably ironically make more than $100 million given where you’re striking him today.  Second, take Timothy Geithner, Head of the US Treasury Depart out to Smith & Wollensky’s (don’t expense it though) and tell him over a hard vodka tonic and medium-rare rib-eye to hurry up and put a syndication together to offload America’s 34% stake!

You know the stock markets are back to their risk-loving ways.  As soon as the government offloads their stake, critics will have nothing to say.  You win because Citigroup essentially gets a “free” 10 month survival loan since you state the government is not all up in your business.  You’ve even been able to raise base salaries of thousands of executives by 50% this year as well.  By selling the government stake back to the very public who helped bail you out, you’re just in time to implement attractive pay packages to you and and thousands of employees for 2009. You can even hire back our hard working friend, who never caused any trouble.  Not sure if she wants to go back though!

Vik, by following our advice, you’ll be able to party like it’s 2007 again.  You can even raise base pay for executives by another 50% while the rest of America struggles if you want to (that might cause a revolt, so better not).  Given all this good advice, at the very least, can you tell your credit card department head to lower our interest rate down to 7% again?  We’re on a fixed income and what you guys did crimps our style.  Oh, and maybe you can give all the readers at Financial Samurai a reprieve as well.  If you accept the people’s assistance, please also protect your own common employees who aren’t making the mega-millions.  Thanks buddy.  Long live America!

Related Posts:

“Government Employee Entitled to $100,000,000 Bonus!”

“Do Higher Taxes Lead To Socialism In America?”

“America’s Shadow Government”

Keigu,

Financial Samurai

“Slicing Through Money’s Mysteries”