Monday, August 13, 2007

Sub prime crisis drags down world markets

Book Value
Hedge Fund & Investment Management
Izzy Nelken

Below the prime credit world are subprime mortgages, writes Robert Sherak in an essay included in ‘Hedge Fund & Investment Management’, edited by Izzy Nelken ( Default rates in lower-quality subprime mortgages can exceed 20 per cent per year, he observes. “Securitisations backed by subprime mortgages are usually called ABS (asset backed securities).”

Currently, subprime is an area of colossal concern. For instance, at the time of writing, Boston Herald reports, ‘Stocks down as US subprime-mortgage crisis goes global’. This is Money says, ‘Sub prime crisis drags down world markets’. Daily Times, Pakistan notes, ‘Futures slide, subprime woe rattles markets.’

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