Saturday, September 19, 2009

Economic Duplicity: Recession and Record Profits

In December 14, 2008, in his interview on the CBS sixty minutes show, Whitney Tilson an investment fund manager predicted that the subprime collapse was only half way of the total real estate bubble, and that the second half will begin take place around 2010 and will continue until about the year 2013. Tilson also discussed the two fancy Wall Street terms for bad mortgages namely Alt-A (Alternative-A paper) and option arms mortgages. These loans lured borrowers with teaser rates that will begin to reset this year.

Tilson has also predicted that seventy percent of these loans will eventually default, based on existing evidence of pre-reset default rates [1]. (more)

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