Wednesday, August 22, 2007

Lehman, HSBC, Accredited Commence Layoffs

The financial sector continues to shed jobs:

The rising cost of credit took its toll on Lehman Brothers Holdings Inc., Accredited Home Lenders Holding Co. and HSBC Holdings Plc as the subprime mortgage fallout spreads through the economy.

Lehman, the biggest underwriter of U.S. bonds backed by mortgages, became the first firm on Wall Street to shut its subprime-lending unit and said 1,200 employees will lose their jobs.


Accredited said in a statement today it will shut more than half of its mortgage operations and fire about 1,600 people.


HSBC plans to close its Carmel, Indiana, office by the end of the second quarter of next year, eliminating 600 jobs, spokesman Michael Trevino said.

In addition to the job cuts announced today, at least 20,957 layoffs in the financial sector have been announced this month as a result of the subprime mortgage mess.

It will be interesting to see what the overall August job numbers look like when they're released after Labor Day.

You know the Fed will be looking very closely at them before they make any decisions on rate cuts.

UPDATE: The Associated Press reports that job layoffs related to the subprime mess in the financial sector have totaled 38,000 for the year - but over 24,000 have come in just the last three weeks.

Aug. 22, 2007

Bank of America is making a $2 billion equity investment in Countrywide Financial, the embattled mortgage giant.

Bank of America will purchase $2 billion worth of preferred Countrywide stock yielding 7.25%, and that can be converted into common stock at $18 a share.

For more information, go to:
Saw it - Countrywide's shares are up in after hours trading, as are BoA's.
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