Mortgage Lenders Bring Stock Market Down
The fallout from the subrpime lending crash is far from over, and this morning’s stock market holds the proof. Subprime writedowns are all the rage right now, with the latest coming from Merill Lynch, which reported a loss that more than doubled estimates. Bloomberg reports on the stock market right now, and where it’s at thanks to the subprime lending crash:
“Right now, this market is the Devil’s arcade,” said Michael Nasto, senior trader at U.S. Global Investors Inc., which manages about $6 billion in San Antonio. “We could still go lower from here because we don’t have our arms around the subprime writedowns.”
Merrill’s writedowns add to more than $100 billion of subprime-related losses reported since May by the world’s largest banks and securities firms. Citigroup Inc. posted the biggest loss in its 196-year history earlier this week as the largest U.S. bank’s subprime mortgage investments tumbled in value by $18 billion.
Financial sector stocks are hard-hit as the year gets underway, with those in the S&P 500 losing 6.8%. In 2007, financial sector stocks lost 21%. No one is expecting a quick recovery, and while there are investing opportunities to be found in the current stock market, it is important to take a good look at the fundamentals. Some companies may not make it out of this mess.
Tags: mortgage lenders, subprime writedowns, home mortgage loan, mortgage loan blog,
stock market, investment opportunities
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