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Risky Loans Losses Unclear |
Valuing Bonds Gains Urgency For Investors By CAROLINE SALAS | And MARK PITTMAN Bloomberg News
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On Wall Street, where the $800 billion market for mortgage securities backed by sub-prime loans is coming unhinged, traders are belatedly acknowledging that what they see is not what they get.
As delinquencies on home loans to people with poor or meager credit surged to a 10-year high this year, no one buying, selling or rating the bonds collateralized by these bad debts bothered to quantify the losses.
Now the bubble is bursting, and there is no agreement about how much money has vanished: $52 billion, according to an estimate from Zurich-based Credit Suisse Group last week that followed a $90 billion assessment from Frankfurt-based Deutsche Bank AG.
Even the world's second-largest company by market value must "triangulate" the price of an asset-backed bond when it gets bids from traders, said James Palmieri, who helps oversee $197 billion in investments at General Electric Co.'s Stamford-based GE Asset Management Inc.
Source:
http://www.courant.com/business/hc-
subprime0715.artjul15,0,3825375.story |
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