LEFT OF DAYTON

NY Times: Reports Suggest Broader Losses From Mortgages Worse Than Expected | October 25, 2007

 

 

By VIKAS BAJAJ and EDMUND L. ANDREWS

Published: October 25, 2007

Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up.

 

Merrill Lynch said yesterday that it would take a charge for mortgage-related securities on its books that is $3 billion more than the $5 billion it expected just two weeks ago. And a report from the National Association of Realtors showed that sales of existing homes in September fell twice as much as economists had expected, to their lowest level in nearly 10 years.

Stocks fell sharply early yesterday on the news, with the Standard & Poor’s 500-stock index falling 1.8 percent before recovering in the afternoon. Investors also bid up Treasuries as they sought the safety of government-backed debt.

At this juncture, economists say the troubles in the mortgage market could, all told, cost financial firms and investors up to $400 billion.

That is far more than the roughly $240 billion cost, adjusted for inflation, of the savings and loan crisis of the early 1990s, according to estimates of the combined financial toll of that crisis on both the federal government and private sector. The loss in total real estate wealth is expected to range from $2 trillion to $4 trillion, depending on how far home prices fall, according to several economists.

Read the whole article @

http://www.nytimes.com/2007/10/25/business/25mortgage.html?_r=1&ref=business&oref=slogin

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61 Y/O VIET VET WORKING FROM THE LEFT OF CENTER

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