What's Important in the Financial World (2/20/2013)
New Greek Austerity Protests
The masses in one European nation once again demonstrated that government attempts to close deficits through austerity only work if people work. Greeks staged a large national strike to protest government cuts and higher taxes. The action promises to bring the Greek economy to its knees at a time when the reversal of the gross domestic product collapse is necessary for the nation to meet the budget targets set by its neighbors, the International Monetary Fund and European Central Bank, which have loaned Greece hundreds of billions of euros. Greece may be able to take scissors to its national government expenses, but it cannot force people to work, pay taxes and create and consumer products and services. According to Reuters:
Greece's two biggest labor unions brought much of the near-bankrupt country to a standstill during a 24-hour strike over the cuts, which they say only deepen the plight of a people struggling to get through the country's worst peacetime downturn.
Representing about 2.5 million workers, the unions have gone on strike repeatedly since Europe's debt crisis erupted in late 2009, testing the government's will to implement necessary reforms in the face of growing public anger.
"The (strike) is our answer to the dead-end policies that have squeezed the life out of workers, impoverished society and plunged the economy into recession and crisis," said the private sector union GSEE, which is organizing the walkout with its public sector sister union ADEDY.
Bank of America CEO Pay
Bank of America Corp. (NYSE: BAC) CEO Brian Moynihan has been rewarded appropriately for a combination of layoffs, settlements of legal issues with the government, which have cost the financial firm hundreds of millions of dollars, and improved management of the firm's operations. The bank's stock has risen nearly 100% in the past year. Moynihan's compensation for 2012 was about $12 million, not terribly much, based on how well the bank has outperformed its rivals in the stock market. According to CNN Money:
The compensation package is much larger than in 2011, when Moynihan was paid $7 million.
The $12 million haul places Moynihan near the middle of the bank CEO compensation rankings. Moynihan just edged out JPMorgan's Jamie Dimon, whose bonus was slashed by 53% amid fallout from the bank's so-called London Whale trading losses.
But Moynihan isn't expected to top Lloyd Blankfein of Goldman Sachs or John Stumpf of Wells Fargo.
China Denies Hacking
The Chinese Army denied it was behind a series of sophisticated cyber attacks that began as early as 2006. Someone else must have done it, despite proof from U.S. research firm Mandiant. Chinese officials claim that the "facts" show the People's Republic had no role in the bad behavior. However, they did not offer any facts of their own. According to The New York Times:
Geng Yansheng, a spokesman for China's Ministry of National Defense, said that China had been the victim of cyber attacks that have originated in the U.S., and that Mandiant mischaracterized China's activities.
"Chinese military forces have never supported any hacking activities," Mr. Geng said at the press briefing. "The claim by the Mandiant company that the Chinese military engages in Internet espionage has no foundation in fact."
Mandiant ought to do a study on how China could have been so flagrantly victimized.
Filed under: 24/7 Wall St. Wire, Market Open Tagged: BAC