U.S. Subprime Mortgage Market Could Spiral Out of Control Into a Global Financial Crisis
July 29th, 2007Via: Market Watch:
The problems in the U.S. subprime mortgage market could spiral out of control into a global financial crisis, economist Mark Zandi said Thursday.
With a “high level of angst” in the financial markets about who will take the losses from more than $1 trillion in risky mortgages, we could be just one hedge-fund collapse away from a global liquidity crisis, said Zandi, chief economist for Moody’s Economy.com.
A global meltdown is not likely, but the risks are growing, Zandi emphasized in a conference call with reporters following the release of a new study on subprime debt that concludes that the housing crisis could be deeper and last longer than investors now believe…
And it could spread. “Mounting mortgage delinquencies and defaults now pose the most serious threat to the global financial system and economy,” Zandi said in his report.
Research Credit: PD
This seems to be playing out like a slow motion car crash
More like the sinking of the Titanic, methinks, with the money markets being transferred into new safer hands/drivers…… Street savvy and worldly wise but mindful of their higher responsibilities.