What are banks going to do about the sub-prime mortgage crisis, especially with the holidays right around the corner? What SHOULD they do?
Check out this interesting article by James Mumm, a contributing blogger to the Movement Vision Lab:
Between last month and the end of this year, more than $180 billion dollars of adjustable-rate mortgages (ARM) will reset to higher rates. Half of those loans are sub-prime mortgages, where the interest rates will skyrocket. People will lose their homes.
The federal government’s response to this crisis so far has been modest cuts in interest rates to try and buoy investors. And the Wall Street firms whose ultra-risky and irresponsible practices fueled this crisis are scrambling to calm investors. But little effort has been made to help the homeowners who are really bearing the brunt of this crisis.
Meanwhile at the end of last year, five top investment banks – Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, and Bear Stearns – distributed over $46 billion dollars in annual bonuses. The largest by far was Goldman Sachs who gave $16.5 billion dollars in bonuses, an average of $623,418 for every employee (of course rainmakers and top executives earned far more than others). A February 2007 survey of 200 Wall Streeters making at least $2 million dollars in bonuses in 2006 showed a wide disparity between luxury purchases and charitable giving – 11.2% went to jewelry and watches and only 4.2% went to charity…
Read on here.
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One has the sense that the Wall Street X-Mas bonuses may not be quite as over the top this year.
Dennis
Thanks so much for the post and joining us here at the Dem Daily.
Darrell
Funny thing about greed, the greedy usually don’t like to give it. I hope you are right about those Wall Street Christmas bonuses.