Thursday, Jul 19, 2007
Some say $52billion, others $250billion, truth is no-one knows
GoldSeek.com: $250 Billion in Subprime Losses?
The problem is that if these offerings lose their investment grades, many institutions will be forced to sell, as they are limited by their charters to only invest in rated paper. But who will buy until the smoke clears? It will get ugly. This will end in tears.
Penultimate paragraph
Posted by lvmreader @ 09:38 PM (192 views) Add Comment
2 Comments
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1. japanese uncle said...
As I may have mentioned earlier, the extent of this sort of bad debt is simply unfathomable, as it tends to change (boost) from time to time. When an economy is caught up by a credit crunch spiral, quite a few firms go bust because of the financial supply line cut by banks calling loans, creating as its spillover an army of additional unemployed population, who will be joining the sub-prime corps (or corpse?) fairly quickly, as they tend to retain very small cash surplus at hand for a rainy day, just to finance say 1-2 months worth cost of living plus mortgage payment, typically in Anglo Saxonian personal financial management climate/practice. I would rather call it a 'Kamikaze' financial approach. Anyway I fear it could potentially be much worse than 250 billion, really. Possibly a trillion between USA and UK, the two major gamble addicted economies?
2. dohousescrashinthewoods said...
Agreed, JU, if the "Federal I'm-so-high-on-crooked-happy-pill-spin-that-nothing-can-possibly-be-bad Reserve" will admit $100bn losses, we can expect the truth to be an order of magnitude higher.