U.S. Subprime Crisis Will Not Peak Until 2009
Standard & Poors, the agency allegedly responsible for incorrectly rating subprime mortgage backed securities, announced this morning that they do not expect the subprime crisis to peak until 2009. One has to wonder if this is a case of truthful reporting or if its just a case of S&P setting the world up for a positive surprise later. S&P has some work to do to clean up their name after all the negative press surrounding the mis-rated bonds, so it would make sense that they would be in a position now to exagerate the problem so they could look better in a few months by making a series of positive announcements. The Portland-Beaverton-Vancouver MSA (Metropolitan Statistical Area) continues to perform well as a function of local economic variables, so if you’re in the market to be buying a house don’t let the naysayers scare you off!
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James said:
Man, this just bites. It’s not like the economy couldn’t have used a little help in the early days, and the feds just screwed it all up when they kept on raising the rates.
Greg said:
Hey James,
You’ve got it just about right. If there’s one thing the FOMC does, its overreact. Historically they always tend to go a little too far in either direction. To their credit though, dealing accurately with variables that take 6-8 months to impact the market can be a bit of a daunting task!
AlexM said:
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!