The biggest act of international economic cooperation since the Sept. 11 terrorist attacks is being put in place after demand for cash caused borrowing costs to rise. Banks and securities firms around the world have written down about $76 billion of assets this year after the market for mortgage-backed securities disintegrated.
The market for U.S. asset-backed commercial paper backed by assets such as mortgages and credit-card loans has shrunk for 17 straight weeks to $801 billion, falling 33 percent from its peak on Aug. 8, as structured investment vehicles continued winding down, according to data compiled by Bloomberg.
Those two pieces of information should scare the snot out of everyone.
2 comments:
"Those two pieces of information should scare the snot out of everyone"....yes, I am scared....it seems to me that this 'thing' is much bigger and deeper than people are letting on...is this so that we all do not get really panicked? I suspect.
Bonddad - When you say that his should "scare the snot out of everyone," what is it that you think will happen because of all this? Do you forecast a global economic meltdown if/when banks have to own up to all the subprime losses? Do you think the markets will lose 10%, 20%, or more? Are we headed for a run on the banks? What exactly is the outlook here?
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