HSBC WARNS OVER U.S. MORTGAGE BAD DEBT
February 9th, 2007Via: Times Online:
HSBC, Europe’s biggest bank, last night gave warning that bad debts in its troubled US mortgage lending business would be 20 per cent higher than forecast.
The bank blamed the impact of slowing house price growth, which it said is being reflected in accelerated delinquency trends across the US sub-prime mortgage market. It said that the level of loan impairment provisions for 2006 for its mortgage services operations will be higher than is reflected in current market estimates. Analysts had previously expected HSBC to report a bad debt charge of $8.8 billion (£4.5 billion).
The warning comes less than four weeks before HSBC’s full-year results, and follows its caution at its pre-close trading update in December that bad debt trends among US mortgage borrowers were deteriorating at a faster than expected rate.
City analysts had expressed alarm at the time that customers were defaulting less than six months after taking out their loans, a situation viewed as virtually unprecedented.
Research Credit: Mortgage Lender Implode-O-Meter
This kind of thing just makes me laugh out loud. Here we have greedy corporate lenders loaning to those who don’t have a chance of repayment, and now they are squealing that they are about to get stiffed.
Guess what happens when I loan money to my idiot younger brothers? The loan turns into a gift! On the other hand, I loan them the money because I don’t want them (and their families) going broke and moving in with me and my family.
So,
Bob makes bad loans and gets stiffed – too bad!
HSBC makes bad loans and gets stiffed – We’ve got to do something!
I say the hell with them, their officers, and their share holders. Let them eat poverty!
this is not good: if europeans banks wise up to us mortgage securities being junk, that’s gonna be another huge pressure against the dollar….
The Fat Lady singing = The Second Coming of her Little Boy and his dad, the Fat Man, except, this time, they’ll visit Iran instead of Japan!!