As of the fall of 2007, the real estate industry borders on catastrophe. The housing boom is over: the widely followed Case-Shiller index of home resales shows that real home prices have dropped 3.5% since mid-2005, and inventories are building rapidly. Delinquencies have been rising rapidly and will necessarily accelerate. Widespread foreclosures and vacancies can have devastating effects on poorer neighborhoods. Yet the unanimous response of the wise men of finance has been that it is "containable." Subprime lending, after all, despite its recent prominence, still accounts for no more than 10 percent of all outstanding mortgages. Even assuming a high rate of delinquencies within that group, in the context of a $12-trillion economy, it looks like small potatoes.
It's not. What makes it so important, and so devastating,
is not its absolute size, but the way subprime mortgages have
marbled their way through the entire world's credit system—and
they are just one of several big, and very shaky, asset classes to
have done so.
Pub date: 02/09/09
Price: $13.95/16.50 Canada
5 1/2 x 8 1/4
Carton Quantity: 48
Selling Territory: W
Pub history: 9781586485634