Tuesday, July 31, 2007

US sub-prime spreads to Europe

Credit insurance costs soar to record

The cost of insurance against credit defaults hit record levels on both sides of the Atlantic on Monday amid concerns that some investors were being forced to sell assets to cover losses on subprime mortgages. Investors rushed to buy contracts that would protect them against corporate credit defaults after it emerged that more European insitutions had suffered losses following the crisis in the US subprime mortgage market. [Two German banks] warned they would be hit by losses from risky US home loans to borrowers with poor credit histories.

Posted by dohousescrashinthewoods @ 10:39 AM (84 views)
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2 thoughts on “US sub-prime spreads to Europe

  • “In spite of the heightened risk aversion in credit derivatives markets US stocks rose. The Dow Jones Industrial Average closed up 0.7 per cent, the S&P 500 rose 1 per cent and the Nasdaq Composite gained 0.8 per cent.”

    When will the markets wake up!!!!

    The city traders across the world seem stuck like rabbits in the headlights, analysing historical data on corporate earnings, seemingly oblivious to the size of the brute which coming to hit them at high speed.

    The western economies are full to the brim with debt and nobody wants to buy anymore, asset prices are falling, banks are massively exposed, yet the party continues?

    IMHO we have only seen the tip of the iceberg, what lies below the water will sink some mighty ships.

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  • dohousescrashinthewoods says:

    I have to admit I fancy one last rally so I can offload those free Standard Life shares before it finally heads for the abyss.
    Taking a selfish view, if American traders can’t find the sell button, for now, so much the better 😉

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