And Now Brace For the Bigger Wave of Mortgage Defaults: "There are signs that the sub-prime collapse is, finally, beginning to stabilize: The rate at which delinquencies are rising has started to flatten, especially on pre-2007 vintages (in part because mortgages that are paid or or houses that are foreclosed on don't count). But now, says Vikas Bajaj at the NYT, a larger wave of prime and Alt-A defaults is likely to take over. If so, this will likely finish blowing many bank balance sheets to smithereens."
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These analysts say "the problems in the broader market may not peak for another year or two." So that means the overall economy will continue to be fragile, and any additional major shock, such as oil prices doubling if war starts with Iran, could make for memorable times.
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