Isn’t it nice to be a big financial firm? Bear Stearns Cos., one of Wall Street's oldest banking firms, has received a bailout from the federal government and JPMorgan Chase & Co. Bear Stearns, the nation's fifth-largest investment bank, made its fortune dealing in opaque mortgage-backed securities - a strategy that might be its undoing amid the worst housing slump in a quarter century. The bank has racked up $2.75 billion in write-downs since last year, and faced a possible collapse without some kind of lifeline. This was reported today in a lead AP story http://apnews.excite.com/article/20080314/D8VD9NG80.html.
Meanwhile the Los Angeles Times reported today that the Region has seen a 19% decline in housing prices from the peak in less than a year. http://www.latimes.com/news/printedition/front/la-fi-homes14mar14,1,7243732.story. In my own neighborhood homes are selling so poorly that asking prices have already dropped more than 25%. There is little help to bail out homeowners who bought their homes in the past few years by taking advantage of adjustable rate mortgages.
When you consider the paltry help to private individuals compared to aid the big corporations receive is it any wonder that the public yearns for new government leadership? It’s what we all knew in our hearts. The government protects the rich and to hell with the rest of you.
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