Subprime Default Hot Potato Still Being Tossed About
Abstract:
Four months after it became clear that subprime and Alt A residential mortgages were not worth as much holders paid for them, the financial markets are still sorting out which investors will take the losses. It does not matter to contractors and their suppliers who absorbs the capital losses on these bad mortgages as long it is done slowly and gracefully and without any abrupt negative jolt fed back to the broad economy and hence to construction demand.
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Four months after it became clear that subprime and Alt A residential mortgages were not worth as much holders paid for them, the financial markets are still sorting out which investors will take the losses. It does not matter to contractors and their suppliers who absorbs the capital losses on these bad mortgages as long it is done slowly and gracefully and without any abrupt negative jolt fed back to the broad economy and hence to construction demand.