Goldman Sachs shares have jumped some 4.7% in pre-market trading to around $152 following the announcement of an agreement with the SEC to pay a record $550 million settlement over fraud claims linked to the subprime mortgage investment known as Abacus.
Getting out of subprime mortgage lending makes economic sense for banking giant Wells Fargo. But its questionable record of lending practices in black and Hispanic communities is another good reason to quit the business.
One of the most disturbing aspects of the home foreclosure crisis is how much damage it has caused in minority communities. Activist group Committee for Responsible Lending finds black and Hispanic borrowers are twice as likely to have lost their homes.
Though Las Vegas' official home-ownership rate is 59%, the "effective" rate is a dismal 15%, according to a new New York Fed report. That's because the money hurdles facing most underwater owners are so high the majority will revert to renters.
Before the Financial Crisis Inquiry Commission, The World's Greatest Investor essentially said this: We are all of us, myself included, a bunch of junkies -- and history shows that markets will always oblige us with a fix.
If you're reading this, you're aware of the civil charges the SEC brought Friday against Goldman Sachs. But what does the whole thing mean in the broader context of the Goldman brand, that scary black hole hedge fund you may have heard about and that hot new Michael Lewis book?
Two years into the investigation of Countrywide Financial, once the nation's mortgage leader, a grand jury late last year began hearing witness testimony. That signals an acceleration in the process, and hints that this phase of the case may now be nearing its resolution.
Despite getting an additional $3.8 billion last week in federal aid and a year-end rebound in car sales, GMAC still expects to post a $5 billion loss for fourth quarter 2009. Most of it stems from write-downs in residential real estate.
