Subprime and college educations – an analogy worthy of investigation

As we finish the last day of 2008 the reality of the matter is that 18 months have passed since red lights came on and warning sirens sounded in the summer of 2007. Letting the air out of the mortgage bubble, and subsequently starting the collapse of Wall Street, the summer of 2007 was only …

Federal Bail-out, Return to the Source?

When the news hit the street, subprime borrowers took the first hit. No one seems to remember the sequence of federal manipulations or new mortgage terms, which were onerous to the point of being predatory. Terms which were deceptive and misrepresented by the mortgage brokers and lenders. Everyone in the industry wants to wheel and …

Lehman Brothers bites themselves in the ass with credibility issues

On July 19, 2007 Lehman Brothers rejected suggestions that they are exposed to subprime problems. Many companies made statements in the summer of 2007, in part because their shock and disbelief caused those companies to say just about anything. Remember Countrywide in July 2007? But we had a problem with Lehman Brothers rejection of exposure …

Problems spread outside of mortgage market

Last year as we watched the decline of the mortgage market we suspected the problem was deeper than that. Mortgage blues spread around the world. Now the problem is well beyond mortgages. Credit deterioration is beginning to spread outside of residential real estate into commercial loans and credit cards, BMO Capital Markets analyst Peter Winter …

Subprime lines lead to global recession

Fallout from investments in the United States, subprime debt, and commercial paper has spread around the world. Some countries are feeling the impact as infection in the US has spread to the real economy around the world. Profits at Dutch-Belgian banking group Fortis halved in its fourth trading quarter after a worse-than-expected 1.5 billion (£1.15bn) …