Well, here we are, watching financial Armageddon! As the meltdown continues, fired CEOs of financial institutions have claimed millions in bonuses based upon fictitious profits priced by some flawed financial models. Many of these dismissed execs received elaborate severance and retirement benefits totaling in the millions as well. Perversely, fired executives who are responsible for the crises may actually be better off than those who stayed to clean up the mess, and there appears to be little recourse.

Thousands of employees of these firms have lost their jobs and it seems certain that there will be thousands more. Many have lost much of their retirement and investments due to the current devastating bear market. Stockholders in some of these companies have been decimated seeing the value of their holdings decline by more than 80%.

The fabled bailout package has evolved into a strange derivative of its original intent in that none of the $700 billion of the originally congressionally approved bailout money has been spent on any of the securities for which the bailout was designed. It looks as though anyone, including the man with the grinder and the monkey on the street corner, may be eligible for TARP funds, as Treasury Secretary Paulson and his minions expand the bailout program to include just about any possible business.

So what's the next shoe to drop? Wall Street bonuses! Estimates are that bonuses accrued for employees by the larger financial institutions that received equity from TARP are larger than the actual equity received. Some estimates of these bonuses exceed $100 billion for the group! Does this sound wrong? Isn't the purpose of this equity injection to shore up the capital position of these institutions? Isn't the purpose of a bonus to reward exceptional performance?

Yes, bonuses are often paid to employees even in tough years, for retention purposes. And some bonus money is certainly justifiable. But these are certainly not normal times.

There must be a responsibility on the part of management of firms that received the equity infusions to use that capital as capital. Yes, the Treasury is right not to dictate the terms of use for the infusions, but doesn't it seem ridiculous to be paying out such huge bonuses in an industry that has lost billions and caused the near ruin of the worldwide financial system? And how can the amount to be paid exceed the amount received by the institutions from TARP?

Congress most assuredly will levy a strong objection to this situation. Historically, the salary is only a small percentage of a Wall Streeter's total compensation, but let's not confuse a right with a privilege. Wall Street is a risky playground and compensation has in theory always been performance-based.

To assume anything else is just plain wrong. Firms are fighting for their lives, and profits are non-existent. Without the government bailout, it is likely that many of these firms would fail altogether and thousands would have no salary or bonus. No, it is not right that the actions of a relative few have been allowed to decimate the financial condition of so many, but we must be adults in this situation, bite the bullet, and be realistic in our actions and expectations. The future will be bright again, but not without cost now.

The views expressed in this column do not necessarily reflect the views of Channel Capital Group. Inc.