$800 billion market for mortgage securities backed by subprime loans in danger of getting extinct as Moodys and S&P say enough is enough
Karen Zuba
Jul. 11, 2007

No one has any clue to the amount of losses that have accrued in the books from the mortgage securities backed by subprime loans? The S&P and Moodys finally said that enough is enough.

As delinquencies on home loans to people with poor or meager credit surged to a 10-year high this year, no one is buying, selling, or rating the bonds collateralized by these bad debts bothered to quantify the losses.

According to some estimates the eventual fall out from all this can be in trillions of dollars across the globe.

The bubble is bursting and there is no agreement on how much money has vanished: $52 billion, according to an estimate from Zurich-based Credit Suisse Group earlier this week that followed a $90 billion assessment from Frankfurt-based Deutsche Bank AG.

All on a sudden, the market players have realized real estate will not come back that soon. There is no way they can hide these mega losses under the rug.

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