Barron – President Obama took credit Wednesday for the recovery in the financial markets while at the same time decrying Wall Street’s profits and the big bonuses that will be paid out as a result.

In his prime-time news conference, Obama said that if shaming those on Wall Street who take home multi-billion-dollar bonuses doesn’t work, he vowed to make sure shareholders of those companies were made aware of the compensation being doled out.

In the absence of "remorse" of Wall Streeters for raking in big paychecks once again, the president said financial regulatory reform would be necessary to prevent banks from taking risks that he said caused the financial crisis necessitating government bailouts.

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Tags: absence, banks, barron, dollar bonuses, financial crisis, financial-markets, news-conference, obama, paychecks, prime time, profits, regulatory reform, remorse, shareholders, time news, wall street, wall streeters

Bloomberg – Compensation for U.S. hedge-fund employees may drop as much as 25 percent this year as the firms try to recoup last year’s investment losses.

The decline will cut hedge-fund paychecks to about half the record levels of 2007, according to estimates by Alan Johnson, founder of Johnson Associates Inc., a New York-based compensation-consulting firm whose clients include financial- services companies.

About 70 percent of the industry’s 6,800 so-called single- manager funds lost money in 2008 with the average fund dropping 19 percent, according to data compiled by Chicago-based Hedge Fund Research Inc. That means most clients don’t have to pay performance fees — generally 20 percent of profits — until the losses are made up. Many owners of the private partnerships will cover salaries out of their own pockets, or from pools set aside in previous years, to keep their best employees, Johnson said.

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New York (HedgeCo.Net) – Obama used his time in front of Congress last night to present a “blueprint for our future,” with a specialized focus on health care, education and energy.  But there was plenty of time for talk on the financial crisis, saying we have come to a “reckoning” after years of poor decision making and lax regulation.

"A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future," the President said.  “People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day."

Obama added, “I know how unpopular it is to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions. I promise you, I get it."

Obama said while he is in favor of lending a hand to large banks when needed, those institutions will be held accountable for how that money is spent.   He also said he plans on launching new lending programs that will provide funding for college, small business and car loans.

Touching on the anger regarding CEO payouts and bonuses, Obama put to rest any further issues saying, “CEOs won’t be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over."

Obama also tried to restore confidence in the U.S. banking system by assuring the public that their money is safe in our financial institutions.  To those same banks he said, “if we do not re-start lending in this country, our recovery will be choked off before it even begins."

Prior to his speech today, Gallup reported that Obama’s approval rating had dipped below 60 percent for the first time since the company started tracking it on January 21st.  Gallup stated that his average approval rating was 64 percent, with most of the current decline coming from the Republicans.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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