Comments on: BNY Mellon’s interest-rate problem http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/ A slice of lime in the soda Thu, 23 May 2013 05:23:13 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: Danny_Black http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30564 Danny_Black Tue, 06 Sep 2011 05:28:41 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30564 y2kurtus, according to report - which admittedly may not be accurate - the total amount he is getting is 33.8million not 80mn. He sold Mellon to BNY at the top of the market and I suspect a large portion of his compensation derives from that fact. The only bit that makes no immediate sense is how he gets 4million bonus for dragging the stock down but i suspect he is compensated based on outperforming certain peers and the index he is being measured against is massively down. y2kurtus, according to report – which admittedly may not be accurate – the total amount he is getting is 33.8million not 80mn. He sold Mellon to BNY at the top of the market and I suspect a large portion of his compensation derives from that fact. The only bit that makes no immediate sense is how he gets 4million bonus for dragging the stock down but i suspect he is compensated based on outperforming certain peers and the index he is being measured against is massively down.

]]> By: y2kurtus http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30562 y2kurtus Tue, 06 Sep 2011 02:31:02 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30562 "No idea if he is worth 2 million but as usual the headline is inaccurate." I'm not sure how inaccurate that headline is. The guy is walking with 80 million bucks and the stock at a multi-year low. I'm a capitalist. I love the idea of earning powerball money instead of just winning powerball... and make no mistake it can be done. Whatever Steve Jobs is worth he was massively underpaid. Mark Hurd was worth of every penny he ever got out of HP... but this guy is retiring with a level of compensation which simply does not reflect the contributions he made to the company. That is a EPIC FAIL of the board of directors fidicuary responsibility to their shareholders and the reason I hope Karl Ichan lives to be 200 years old. Felix... you are absolutely right that custody is tricky. Just ask Fifth Third or Key bank if custody is easy... they have both had to invest millions upon millions in systems and technology and make virtually nothing custodying hundreds of billions of dollars. Custody is a go big or go home business! “No idea if he is worth 2 million but as usual the headline is inaccurate.”

I’m not sure how inaccurate that headline is. The guy is walking with 80 million bucks and the stock at a multi-year low. I’m a capitalist. I love the idea of earning powerball money instead of just winning powerball… and make no mistake it can be done. Whatever Steve Jobs is worth he was massively underpaid. Mark Hurd was worth of every penny he ever got out of HP… but this guy is retiring with a level of compensation which simply does not reflect the contributions he made to the company. That is a EPIC FAIL of the board of directors fidicuary responsibility to their shareholders and the reason I hope Karl Ichan lives to be 200 years old.

Felix… you are absolutely right that custody is tricky. Just ask Fifth Third or Key bank if custody is easy… they have both had to invest millions upon millions in systems and technology and make virtually nothing custodying hundreds of billions of dollars. Custody is a go big or go home business!

]]> By: Danny_Black http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30557 Danny_Black Mon, 05 Sep 2011 16:13:29 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30557 FifthDecade, actually he got a 2 million payout. The rest is stock he built up over time, pension and 4 million stock related bonus. No idea if he is worth 2 million but as usual the headline is inaccurate. FifthDecade, actually he got a 2 million payout. The rest is stock he built up over time, pension and 4 million stock related bonus.

No idea if he is worth 2 million but as usual the headline is inaccurate.

]]> By: Danny_Black http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30556 Danny_Black Mon, 05 Sep 2011 16:08:59 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30556 If you are talking about the custodian then it is usually a percentage of assets under management. You could argue that in a low-interest rate environment that asset prices are inflated and so they make MORE fees. You could also argue that there is only a low-interest environment when prices are depressed so they make LESS fees. Point is that it has nothing to do with interest rates. If you are talking about the custodian then it is usually a percentage of assets under management. You could argue that in a low-interest rate environment that asset prices are inflated and so they make MORE fees. You could also argue that there is only a low-interest environment when prices are depressed so they make LESS fees. Point is that it has nothing to do with interest rates.

]]> By: FifthDecade http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30555 FifthDecade Mon, 05 Sep 2011 15:00:34 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30555 The amazing thing here is the $38 million payout for failing. That's obscene. But then executive pay has mushroomed by 187% since 2002 while stock prices have only gone up by 21% in the same period. The day when managers cared about shareholders has long gone. http://www.bbc.co.uk/news/business-14781254 The amazing thing here is the $38 million payout for failing. That’s obscene. But then executive pay has mushroomed by 187% since 2002 while stock prices have only gone up by 21% in the same period. The day when managers cared about shareholders has long gone.
http://www.bbc.co.uk/news/business-14781 254

]]> By: right http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30554 right Mon, 05 Sep 2011 13:42:39 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30554 "Which is why BNY Mellon is trading at a market capitalization of less than $25 billion, despite having roughly six times that sum in cash on its balance sheet." Hm. The $270 billion of liabilities on its balance sheet may also have something to do with this. “Which is why BNY Mellon is trading at a market capitalization of less than $25 billion, despite having roughly six times that sum in cash on its balance sheet.”

Hm. The $270 billion of liabilities on its balance sheet may also have something to do with this.

]]> By: Danny_Black http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30553 Danny_Black Mon, 05 Sep 2011 13:15:47 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30553 I don't know... Maybe it is nostalgia but it does seem over the last decade that basic fact checking went out the window. I don’t know… Maybe it is nostalgia but it does seem over the last decade that basic fact checking went out the window.

]]> By: TFF http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30551 TFF Mon, 05 Sep 2011 12:51:52 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30551 "Is it not time for journalists to have to pass some sort of basic competency test for the field they are reporting in?" Hasn't ever been that way, has it? Felix does bring up interesting topics, and generates interesting responses. Valuable, even if occasionally his articles are off-base. “Is it not time for journalists to have to pass some sort of basic competency test for the field they are reporting in?”

Hasn’t ever been that way, has it?

Felix does bring up interesting topics, and generates interesting responses. Valuable, even if occasionally his articles are off-base.

]]> By: Danny_Black http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30549 Danny_Black Mon, 05 Sep 2011 11:25:20 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30549 alea, I didn't even get that far just saw securities lending and interest rate. It is extraordinary that some 3 years at least of writing about finance, Mr Salmon cannot get the very elementary basics correct. Custody has nothing to do with asset management. It is not "incredibly difficult and expensive", it is merely a scale business that requires a big upfront investment in systems and people but once you have the scale it is usually money for old rope. You charge a few basis points on the assets under management. Off the top of my head, recently you have got wrong what sub debt is, what duration is, what custody is, how securitisation works - repeatedly - the difference between market making and clearing - admittedly you were cutting and pasting from some other incompetent - how second liens work and what in fact the Fed does. You wrote about economists a little while back. Is it not time for journalists to have to pass some sort of basic competency test for the field they are reporting in? Especially in finance, where they seems to be an even stronger tendency to cut and paste and where they can have a direct market impact. Analysts are required to at least have some elementary grasp of the words they use, why not journalists? alea, I didn’t even get that far just saw securities lending and interest rate.

It is extraordinary that some 3 years at least of writing about finance, Mr Salmon cannot get the very elementary basics correct. Custody has nothing to do with asset management. It is not “incredibly difficult and expensive”, it is merely a scale business that requires a big upfront investment in systems and people but once you have the scale it is usually money for old rope. You charge a few basis points on the assets under management.

Off the top of my head, recently you have got wrong what sub debt is, what duration is, what custody is, how securitisation works – repeatedly – the difference between market making and clearing – admittedly you were cutting and pasting from some other incompetent – how second liens work and what in fact the Fed does.

You wrote about economists a little while back. Is it not time for journalists to have to pass some sort of basic competency test for the field they are reporting in? Especially in finance, where they seems to be an even stronger tendency to cut and paste and where they can have a direct market impact. Analysts are required to at least have some elementary grasp of the words they use, why not journalists?

]]> By: alea http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30548 alea Mon, 05 Sep 2011 10:51:11 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30548 Amazing piece of nonsense. Actually, BNY has $1.3 trillion of assets under management and $26.3 trillion under custody (custody means: settlement, safekeeping, and reporting of customers' marketable securities and cash). If some of the assets under custody are available for lending, it is a choice by and for the benefit of the customer/owner, and BNY gets a servicing fee, not the "interest rate". Amazing piece of nonsense.
Actually, BNY has $1.3 trillion of assets under management and $26.3 trillion under custody (custody means: settlement, safekeeping, and reporting of customers’ marketable securities and cash). If some of the assets under custody are available for lending, it is a choice by and for the benefit of the customer/owner, and BNY gets a servicing fee, not the “interest rate”.

]]> By: Danny_Black http://blogs.reuters.com/felix-salmon/2011/09/05/bny-mellons-interest-rate-problem/comment-page-1/#comment-30547 Danny_Black Mon, 05 Sep 2011 07:03:33 +0000 http://blogs.reuters.com/felix-salmon/?p=9743#comment-30547 So repo rates on all products are the same as the discount rate? If I ever need a locate I am coming to you!!! So repo rates on all products are the same as the discount rate? If I ever need a locate I am coming to you!!!

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