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Mortgage Trouble Rattles Wall Street

Posted Jun 14, 07 10:54 AM CDT in Business 

(Newser) – Bear Stearns posted a 10% drop in quarterly earnings today, the latest victim of the subprime collapse. The country's second-largest mortgage-bond underwriter posted profits well below expectations, down nearly 33% from last year to $362 million. Goldman Sachs escaped bruised but more-or-less unscathed, with profits up 1% on the strength of its banking division.

Bear Stearns' fixed-income revenue, down 21%, makes up nearly half of the bank's income, Bloomberg reports. That's left them far more vulnerable than competitors such as Goldman, which covered a 24% drop in fixed-income earnings with gains in investment banking and equity trading. But even usually unflappable Goldman has been rattled: Shares are down 3% in mid-morning trading.

Source Bloomberg

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The building on Broad Street in New York's Financial District that houses brokerage firm Goldman Sachs, Tuesday, June 12, 2007. Goldman Sachs Group Inc., the nation's largest investment bank, on Thursday,...   (Associated Press)
The headquarters for securities firm Bear Stearns is shown March 16, 2006 in a New York file photo. Bear Stearns Cos., the fifth-biggest U.S. investment bank, said Thursday, June 14, 2007 fiscal second-quarter...   (Associated Press)
Bear Stearns Fined $250 Million Over Questionable Trades   (Getty Images)
The building on Broad Street in New York's Financial District that houses brokerage firm Goldman Sachs, Tuesday, June 12, 2007. Goldman Sachs Group Inc., the nation's largest investment bank, on Thursday,...   (Associated Press)
A for sale sign sits in front of a home on a quiet street in Walpole, Mass., in this Dec. 28, 2006 file photo. Sales of existing homes plunged in March by the largest amount in nearly two decades, reflecting...   (Associated Press)
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US economy  • subprime mortgages  • business  • Bear Stearns  • Goldman Sachs  • finance  • earnings reports  • investment bank  • equity trading


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