'Recovery' You Can't Believe In
A pair of depressingly familiar headlines indicate who the bailout was <em>truly</em> meant to benefit.
If there was any doubt before today who the federal government's $13 trillion bailout was truly meant to benefit—homeowners and small businesses or megabanks like Goldman Sachs and JPMorgan Chase—a pair of telling, yet depressingly familiar, headlines should put that to rest.
Foreclosures at Record High in First Half 2009 Despite Aid
New York - U.S. home foreclosure activity galloped to a record in the first half of the year, overwhelming broad efforts to remedy failing loans while job losses escalated.
Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday.
The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15 percent from the first half of last year.
"Despite everybody's best efforts to date we're not really making any headway against the problem," Rick Sharga, senior vice president at RealtyTrac in Irvine, California, said in an interview.
Meanwhile, The New York Times reported this today as well:
JPMorgan Earnings Soar as It Finds Profit in Slump
Even as it weathers the worst economic downturn in decades, JPMorgan Chase on Thursday announced a $2.7 billion second-quarter profit from stellar trading and investment banking results.
The strong showing may put to rest some worries that the bank was allowed to pay back its $25 billion taxpayer investment too early, after it passed the Treasury Department’s stress test in May. But its quick resurgence in earnings, along with Goldman Sachs’s announcement of a $3.4 billion quarterly profit on Tuesday, is bound to raise fresh concerns about soaring pay levels and growing influence in Washington.
Toss in Goldman Sachs' announcement on Tuesday that it had recorded its richest quarterly profit in the bank's 140-year-history and that it has so far earmarked $11.4 billion in compensation this year (NYT headline: "With Big Profit, Goldman Sees Big Payday Ahead"), and the writing is on the wall. Treasury Sec. Tim Geithner called these absurdly large profit announcements an "important sign of recovery." For the financial behemoths in whose pockets he so neatly fits, recovery it sure is. But for the 1.9 million homeowners who filed for foreclosure in the first half of this year and the small businesses teetering on the brink of bankruptcy, "recovery" couldn't be farther from the truth.