Friday, Jul 27, 2007
The funds had gambled heavily on debt securities linked to sub-prime home loans -- high-risk loans made to people on low wages and incomplete credit histories
smh: Sub-prime crisis may trigger global meltdown
A LEADING Wall Street economist has warned of a possible global financial meltdown if the problems in the US sub-prime mortgage market claim more institutional scalps.
Moody's Economy.com chief economist Mark Zandi said the pre-conditions for global shock were in place and "one or two more Bear Stearns events" could have a profound psychological impact on investor confidence.
Bear Stearns, the fifth-largest securities firm in the US, shocked global markets during the week when it announced that two of its mortgage investment funds previously worth about $US1.5 billion had little or no value left in them.
Posted by chris :-)) @ 05:47 PM (147 views) Add Comment
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