As you know, the banks have lent money out on 85-90% of properties valuations SUBJECT to said loans being insured my a "mortgage insurer". The problem arises if the real estate market drops 20% or more (which it will in all probability) and mortgagors get into difficulties with their repayments - suddenly quality loan books will look subprime. Quack Quack! The insurers could fail (Yes - even over a weekend as in the case of Bear Stearns) The banks are left holding the mortgage can - which can not be on-sold on a fearful market and Voila!
I hope it doesn't happen but don't be fooled into thinking it cannot happen.
IMO -DYOR
banks will continue to get smashed, page-36
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$132.74 |
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Mkt cap ! $222.1B | |||
| Open | High | Low | Value | Volume |
| $133.10 | $133.50 | $132.52 | $200.1M | 1.502M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 8 | $132.72 |
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| Price($) | Vol. | No. |
|---|---|---|
| $132.83 | 771 | 1 |
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