In 2010, former Washington Mutual bank executives spoke at a U.S. Senate Homeland Security and Governmental Affairs Committee hearing on high-risk loans. The bank was later bought by JPMorgan Chase, which has just settled litigation brought by the federal government for $13 billion. (Photo by Mark Wilson/Getty Images)
JPMorgan Chase has agreed to pay $13 billion, including $4 billion for consumer relief and $6 billion to investors who lost big during the bank’s risky mortgage securities schemes. This settlement with the U.S. government is larger than any other Wall Street settlement and is roughly equivalent to half the bank’s annual profit. JPMorgan also agreed to a statement of facts, in which the bank admitted to key failures in buying toxic mortgage securities from 2005 to 2008. This NPR report offers a breakdown of the settlement and who gets the money.
A number of institutions will receive money in the settlement. Investors in JPMorgan appeared positive about the settlement. Shares of the New York-based bank rose 41 cents, or 0.7%, to $56.15 on Tuesday, as major U.S. stock indexes edged lower. This Los Angeles Times story offers more investor details.
I’m glad JPMorgan gave up trying to argue that it should not be held culpable for problems that came from the banks it acquired, including investment bank Bear Stearns and thrift Washington Mutual. But this does not end the anger and emotion surrounding the bank. Critics of the settlement call it a sweetheart deal engineered by a Wall Street-friendly Obama administration. Defenders call it precedent-setting, comparing it to the $4.5 billion in fines and penalties paid by British Petroleum over the 2010 Gulf of Mexico oil spill. A Seattle Times editorial welcomed the BP settlement.
The JPMorgan settlement could become a template the federal government would use to guide future action against other banks. If so, is the settlement letting JPMorgan off too lightly or is it in proportion to the bank’s transgressions? Take this poll.
The picture on the left illustrates best the lure of the Issaquah Highlands, a master-planned community featured in the Seattle Times Sunday. Dwellers want the retail amenities found in urban centers like Seattle but they also want to be close by trails for their mountain bikes. The Times article called it one of King County’s largest urban villages….
Reading my colleague Sharon Chan’s latest June 30 column made me feel less guilty about not being a homeowner yet. But then I walked into work the other day and saw a a front-page headline in the newspaper pop out at me:
Front page of The Seattle Times on July 2, 2013.
Yikes. Really? According to that July 1 news report by Seattle Times reporter Colin Campbell, the average monthly rent in Seattle rose over the last three months to $1,190. In Capitol Hill, rates went up 8.2 percent to $1,395. Downtown leases rose 3.1 percent to an average of $1,707 per month. I appreciate the growth in employment from companies like Amazon and Microsoft, but it’s hard to see the consequences of those high-paying jobs on the local housing market. Young people, starving artists and low-income families are being pushed out of the city’s core into areas where they can find more affordable options.
I’ve rented since I moved away from home at 18. My career as a journalist means I haven’t lived in any one place for longer than about two years. Impermanence suits me. A good chunk of my take-home pay is spent on experiences (i.e. concerts/food/travel/outdoor adventures) instead of a mortgage payment. As much as I love leading an active lifestyle, I know it’s equally important to save and invest in retirement. Buying a place of my own is definitely on the to-do list. Luckily I pay reasonable rent and live with a great roommate, which is allowing me to reach my financial goals faster and afford to live in the heart of Capitol Hill.
That’s how I handle high rent and city living. How do others do it? Especially families? I really wonder. Join us on a live chat at noon Tuesday to discuss whether it’s better to rent or buy.
The Seattle Times Opinion section is now on SoundCloud! In our first post, guest columnist Juanita Maestas talks about how hard it is to find affordable housing in King County. Maestas, who is working for close to minimum wage, had to move to Pierce County to find housing that was affordable enough so she could…
Had I known micro-apartments existed when I moved to Seattle seven months ago, I’d probably be living in one right now.
Instead, I rent a room in a Capitol Hill condo with a very nice roommate who allowed my temporary stay to extend by several months. In the process, I’m learning about the city, saving some money and (slowly) making long-term plans. Turns out I don’t need a ton of stuff or space to be happy. For now, this is my life.
I worry about the calls for city officials to put a moratorium on new micro-apartment housing, as reported in this Wednesday Seattle Times story by Lynn Thompson. Though they’re sprouting up around the city, rent for other units in those areas can be ridiculously high. I griped about this in one of my first posts for the opinion blog.
Seattle’s population is growing. Land isn’t. There has to be an option for people working and residing in the city who have smaller budgets and transient lifestyles.
Micro-apartments are not uncommon. In fact, they’re becoming a trend around the world. Let’s take a quick look at what’s happening in other large cities.
BAD:This Business Insider story profiles the rise of subdivided apartments and “caged homes” in Hong Kong. See what those look like in this NTD Television video titled “Hong Kong’s Cage Men”:
BETTER: In Japan, the micro-apartment boom mixes limited space with serious creativity. See this ABC News report from Tokyo Correspondent Akiko Fujita (a former reporter at KOMO-TV):