Primarily, the process of subprime mortgage crisis itself is wrong. There are no middle men as the article inclines me to understand. Instead the middle men are banks themselves. It would have been better if the writer would have done some more research before publishing.
Secondly, the figures are all wrong and all are only indicative values. The exact would be known only after the banks will announce their yearly audited reports. Furthermore, the loss is not limited to monetary. There is intra-bank confidence loss which is non-quantifiable.
RE:Please get the details right
by Abhay T on Feb 06, 2008 05:31 PM Permalink
1. There is a middle man. But they are not exactly like real individuals. They are other kind of banks ( like Northern Rock) that heavily depend on credit from other bigger Banks! e.g HSBC may grant a loan to Norther Rock considering its excellent credit record and Northern rock sells mortgages to customers. 2. The figures are not just indicative. These are the real losses known so far. Obviously, this could be only a tip of the iceburg. For example, as per todays news UBS has written off more losses and it is now down to $18.4bn!
You can find clearer picture on news. bbc. co. uk/ 1/ hi/ business/ 7073131.stm
