As
delinquency ratio of sub-prime borrowers rise, the worse in housing is yet to come I think we are moving toward one of the most fascinating period in economic history. It will also be a time during which most investors will end up with huge losses.
Let me explain, the shares of most sub prime lenders already peaked out in late 2004. Throughout 2006, it became increasingly evident that conditions in the housing market were deteriorating. But investors kept on buying these stocks because the P/Es were low and analysts continued to recommend them, and because the Fed kept on telling investors that the worst in the housing market was over!
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delinquency ratio of sub-prime borrowers rise, the worse in housing is yet to come I think we are moving toward one of the most fascinating period in economic history. It will also be a time during which most investors will end up with huge losses.Let me explain, the shares of most sub prime lenders already peaked out in late 2004. Throughout 2006, it became increasingly evident that conditions in the housing market were deteriorating. But investors kept on buying these stocks because the P/Es were low and analysts continued to recommend them, and because the Fed kept on telling investors that the worst in the housing market was over!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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