Here's just a smattering of today's dismal financial news. It sent the stock market plummeting. But what caused these shortfalls? In most cases it was a situation in which banks, trying to outdo their competitors for future profit on balloon mortgages, qualified people for huge amounts of money. In many cases, these were people that really should not have been lent money due to poor credit history, unstable income and other factors. But banks are notoriously blind when it comes to seeing huge profits down the road. They speculated that the realty market would continue it's ridiculous upward spiral, without thinking about the tenuous financial bridges they were building. While you are pondering this situation, take a look HERE. This is a link for banks that accept matricula consulare for issuing accounts and loans. While such things as domestic drivers' licenses and social security numbers are verifiable, matricula consulare is issued to those who do not have "green cards" and the conventional documentation that would permit such banking transactions. Now, I am not saying this is the only problem with our banking system, but playing fast and loose with money is what caused a little problem locally known in Dallas as the Savings And Loan Fiasco. Read and consider that many of the proponents of less restrictions on illegal immigrants have come largely from the construction industry and their kissing cousins in real estate and banking. And then, ask yourself if this is a "real" drop, or one that was largely caused by a singular lack of clarity and legality on the part of certain greedy bank groups. Do you like having to pay higher interest to fund loans that are given out like cheap candy on Halloween? Speak up-the banks can't hear you.....
- Citigroup, the biggest bank in the US, reported a 57% drop in third-quarter earnings from a year earlier, due in no small part to bad mortgages;
- Bank of America, the second-largest US bank, just reported a 32% drop in earnings, led by a loss of $527 million in revenues at its structured products division;
- J.P.Morgan, the third biggest bank in the US, has marked down $186 million in bad mortgages plus $339 million in debt-derivatives for June-Sept.;
- National City Corp. of Cleveland – the ninth-largest bank in the US according to Reuters – now projects mortgage-book losses of $160 million for Q3, "the high end of its previous forecast";
- The leading US savings and loan, Wamu, says it expects a 75% drop in profits, with a new set-aside of almost $1 billion to cover bad debts and a hit of $410 million to its current lending portfolio;