Monday, July 2, 2007
In the hole for upwards of $200 biilion….
So what’s the spread on the impending CDO disaster?
$125bn to $250bn, according to Bloomberg, which stated rather boldly on Friday that a failure on the part of rating agencies S&P, Moody’s and Fitch to downgrade securities backed by suspect home loans was masking burgeoning losses. Almost 65 per cent of the bonds in indexes that track subprime mortgage debt don’t meet the ratings criteria in place when they were sold, according to Bloomberg’s data. “You’ll see massive losses from banks, insurance companies and pension managers,'’ Joshua Rosner, a managing director at New York investment research firm Graham Fisher, told the news service. “The longer they wait, the worse it’s going to be.”