Lay-offs on WALL STREET???

Gee, what does it mean?
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October 4, 2007 路 The problems in the housing and credit markets are leading to more layoffs on Wall Street. Investment bank Bear Stearns says it will trim 310 jobs from its mortgage group. Merrill Lynch fired two senior executives.

Business
Citigroup, UBS to Post Sharp Losses for Bad Loans



Mark Lennihan

"The Citibank logo is shown on a branch office in New York. Citigroup estimated Oct. 1, 2007 that its third-quarter profit will drop 60 percent due to more than $3 billion in losses after writing down securities backed by underperforming mortgages and loans tied to corporate buyouts."

The subprime lending market is to blame. Variable mortgage rates increased and people with the mortgages had their payments increased dramatically (they had variable rates for many possible reasons: not enough equity and/or poor credit, not enough credit history, etc.). A lot of these mortgage lenders are incredibly persistent and dishonest. They have numbers they need to make in order to keep their jobs. Investors want a return on their investment. In order for these companies to secure funds so they can make mortgages, they have to make the mortgages attractive investments. High perceived risk = Higher rate
It's ironic because people with poor credit or low income (housing costs have gone through the roof in the North East and California: it's ridiculous) need to pay a lower fixed rate in order to make their payments. They aren't making their payments because they are irresponsible. It's because they cannot afford to without starving. The real estate market is not doing well. Houses are not selling. It costs a lot of money to own a house. The upkeep alone and taxes are high.
I don't know why people insist on blaming people for circumstances beyond their control. More jobs are becoming specialized and requiring certain skills/experience requirements that are nearly impossible for a lot of people to get. Wages are not increasing on a regular basis. Mine has not. Productivity has increased. I don't blame it has ever been on the decline. I don't care what the numbers say. I think other factors are coming into play that are not being looked at. Also, there is a big trend towards putting everything into numbers. The qualitatitve aspect is disappearing. Not everything can be measured into numbers. It seems a lot of calculations in business are subject to errors. We have more rich people than before and they are investing in the stock market. It's putting pressure on everything. A lot of this is not Bush's fault per say but he's not doing anything about it. Greenspan isn't helping because he supports the subprime market. I agree with his reasoning but these people need affordable fixed rate loans. They need it more than rich people. These people work hard and deserve something for their work. Most rich people (especially trust fund babies) have done nothing and somehow it's ok??? A lot of old rich have stolen, lied, and cheated their way and somehow that's ok too. The masses are kept entertained and too busy to really think about things so the status quo appears to stay the same but it's not. There is a lot of evidence that the status quo is declining for a lot of americans. The trend seems to be that it will continue but it won't be an immediate thing. It will happen gradually, just under the radar of most people's vision.

Yes, because certain lenders, Ditech, LowerMyBills.com, ect. were offering loans to people who should never had gotten loans. The caused more forclosures than normal, putting more homes on the market than there is demand for lowering prices of homes for sale. Which is on top may sound like a good thing for mortgage companies, but isn't. Two bad things happen to banks and lenders when prices are lower than before

1-They finance a lower amount, making less in interest
2-People are less likely to take a second mortage(if you home is worth around what you paid for it, you cannot take a loan for the difference, while if it is $50,000 higher you could take a $50,000 loan knowing when you sell you can still pay back both loans)

These companies with less than stellar ethics also made other legitmate lenders be more selective in their lending process, all these things lead to less mortgages being written, less money for the banks and in the end the need to cut costs. Thus, the easiest,and only real way to cut cost in this kind of business is to lay off employees.

Bush's economic miracle coming to fruition. I just can't believe these rose tinted lemmings who just cannot see the real situation for what it is.

this is only a symptom of much bigger problems

becuase lenders have been writing so many bad loans fueling the housing bubble we now have future borrowers will have to meet much higher standards, also the huge deficts the government is operating on has tightened up all the credit markets, add that if you lower interest rates much more to stimulate the economy foreign investers will accelerate thier divestments of the dollar leading to who knows what at that point

already the housing market has slowed to its worst level in decades, construction is way down and durable goods sales have dropped to thier lowest level since the 90's when millions fewer people lived in the US

we're not in a recession yet, fortunately, but we are close to a tipping point

It means some people are losing their job----------it doesn't mean, as I'm sure you're trying to insinuate, that the American economy is going to hell and it's Bush's fault.

Good grief, let's all just end things now. The panic has started, the end is near.

Too funny. If 310 layoffs get your panties in a bunch, you might want to consider never leaving your bedroom closet.