In a clear sign of Wall Street's rebound, investment firms are producing record profits this year and the average bonus could rise as much as 40 percent over 2008.
Wall Street firms produced $49.7 billion in profits in the first nine months of this year, a huge turnaround from the previous two years. The industry lost $42.6 billion in 2008 and $11.3 billion in 2007 -- according to a new report from New York State comptroller Thomas P. DiNapoli.
"Profitability has soared because revenues rose while the costs of doing business - particularly interest costs - declined," concluded DiNapoli. In addition, Wall Street has cut costs by continuing to shed jobs, losing 29,300 between November 2007 and October 2008.
In a twist emblematic of the Darwinian nature of Wall Street, those bankers who survived the mass layoffs are due to get huge bonuses outstripping last year's payments. DiNapoli notes:
"The average bonus could grow at an even higher rate since there are fewer jobs than last year (some analysts estimate that the average could increase by up to 40 percent)."
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WASHINGTON — About 1.7 million homeowners were on the verge of foreclosure in the fall, a looming "shadow inventory" of homes that will be put up for sale in the coming years and weigh down prices, a report said Thursday.
The number, up from 1.1 million a year earlier, is likely to keep rising through the middle of next year or later, said Mark Fleming, chief economist of First American CoreLogic, the real estate research firm that released the study.
Already, the foreclosure backlog is equal to nearly half the 3.8 million unsold new and existing homes currently on the market, First American said.
"We're going to be dealing with high levels of distressed (sales) in the marketplace for at least a couple of years," Fleming said. "It's not just all going to disappear."
Other reports have come up with larger estimates. But FirstAmerican assumes that fewer delinquent borrowers – only about one-third – will wind up losing their homes. It also estimates that nearly 30 percent of bank-owned properties have already been listed for sale.
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