Monday, July 9, 2007

Credit Suisse: CDO Losses, A $52 Billion Problem For Investors

From Bloomberg: “Credit Suisse Group said losses on bonds backed by U.S. subprime mortgages will total as much as $52 billion, less than estimates of the fallout from Deutsche Bank and Pacific Investment Management Co.”

“Subprime defaults are ‘clearly a huge problem’ for investors in collateralized debt obligations, Credit Suisse analysts led by Ivan Vatchkov in London wrote in a report. ‘But we do not think that they are a systemic one.”

“No one knows how much money is at risk from subprime defaults because CDOs made up of the loans aren't required to publicly disclose holdings. Deutsche Bank AG says losses from subprime mortgages issued last year may reach $90 billion. Pacific Investment Management Co. in Newport Beach, California, in April estimated the fallout at as much as $75 billion.”

“‘Investment banks operate in this market day and night and they know it better than most,’ Vatchkov said in an interview today. ‘The market's been turning for the past 12 months, so I think they saw it coming.’” read article >>


1 comment:

Anonymous said...

This is just like NEW and NFI - watch out for this stock to take a 10 point plunge or more. I lost my shirt on the above two, enticed by their high divident. Get out now while you can.