We can always count on our mandarins to clue us in to something obvious:
Why didn't Treasury insist on pay caps for these undeserving bankers when it TARPed them up? The moral hazard remains. Bankers probably think they'll earn their bonuses with more money-losing gambits like these:
At least short sales will clear bad mortgage assets off the banks' books. The bad news is that they'll lower the values of remaining homes. The Fed's attempt to reflate the housing market is looking increasingly troubled. All of this is good long-term news if it clears the debt overhang from the economy. It can't help but be bad short-term news for homeowners and economists looking for green shoots of recovery.
Nota bene: Anthony J. Alfidi has no position (thankfully) in GS at this time. He does not owe any mortgage debt at all.
Treasury Secretary Timothy Geithner disputed claims by Goldman Sachs Group Inc.
executives that the bank could have survived the financial crisis without government help and said it and other Wall Street firms should show some restraint in handing out bonuses this year.
Why didn't Treasury insist on pay caps for these undeserving bankers when it TARPed them up? The moral hazard remains. Bankers probably think they'll earn their bonuses with more money-losing gambits like these:
Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006. Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier. Yet for each short sale, there were 25 foreclosures started or completed in the first half of this year, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.
At least short sales will clear bad mortgage assets off the banks' books. The bad news is that they'll lower the values of remaining homes. The Fed's attempt to reflate the housing market is looking increasingly troubled. All of this is good long-term news if it clears the debt overhang from the economy. It can't help but be bad short-term news for homeowners and economists looking for green shoots of recovery.
Nota bene: Anthony J. Alfidi has no position (thankfully) in GS at this time. He does not owe any mortgage debt at all.
