The business news that caught my eye this week was largely about banks.
First, an interesting article from the New York Times magazine about the comeback of sub-prime mortgages, a scary proposition for anyone who remembers the 2008 financial meltdown (which hopefully we all do).
But according to Laurie S. Goodman, an expert in housing finance at the Urban Institute in Washington, D.C., who was quoted in the story, these tight lending rules are hurting the economy as lenders would have made an additional 1.2 million loans in 2012 if they even went back to 2001 rules, when things were considered fairly cautious.
You know things are tight when even former US Federal Reserve Chairman Ben Bernanke can’t get a mortgage. Apparently, as reported in Bloomberg, Bernanke refinanced his home a number of times, the last time taking a 30-year mortgage in 2011 for $672,000. The Globe and Mail speculates that the reason he may be unable to refinance is that the mortgage is too fat to qualify for government backing.
But the question on many minds is why a man of that age and presumed wealth is seeking to remortgage and for such a large amount? What ever happened to being mortgage-free on retirement?
Other bank stories were about banks in trouble. First, Reuters reports the UBS may be facing a fine of $6.3 billion US if it is found guilty of helping wealthy clients in France avoid tax. And JPMorgan Chase disclosed that a cyberattack this summer compromised the accounts of 76 million households and seven million small businesses.
So if secret bank accounts are out, public bank accounts are subject to hacking and banks in general won’t lend money, maybe it’s time to stop saving and just spend.
Serendipitously, a couple of great things to spend money on have also come to my attention – like the latest Bentley. The Mulsanne Speed, with the strapline “the word’s fastest ultra-luxury driving experience” is selling for 324,000 euros (or $411,000 US).
Given my budget though, I’m more likely to look for good wines, and the B.C. Wine awards have come out with their top five B.C .wines. Winning the Premier position is See Ya Later’s Ranch Rover Shiraz-Viognier 2012 which sells for $22.
So much for being mortgage-free at retirement.
