Author Reference resources: new home loans, home loan application, repair loan, home loan modification, homes equity, load rates, lic home loan www.himloan.infoA subprime mortgage crisis:
To some extent, subprime housing loan crisis is not so much a liquidity crisis, than the credit crisis, because subprime home loans expire to did not pay rate rose cause investors to credit risk of common concern, and the market is not lack of money, but the lack of concern for credit risk caused by the liquidity crisis. This worry except the cause and the related MBS and CDO the volatility of the market outside, still spreading to other credit derivatives market, and spread to other markets. With the support of assets commercial paper (asset-backed commercial paper, ABCP) as an example, in August the last three weeks, priced in dollars ABCP balance of the highest plunged from 1.18 trillion to 998 billion, this is due to a sharp rise in the ABCP risk premium, and the issuer to seek lower costs caused by the financing channels. For 30 days ABCP, for example, relative to a month period of Treasury bonds in premium on August 20, 356 bp reached record highs, down to the end of August 223 basis points, is still far higher than average figure in the previous years.
Subprime mortgage crisis caused subprime lenders and investors and the loss of the CDO MBS, this information will be reflected in their share prices, stock investors appear once panic, hard to avoid the impact on the stock market. Due to the stock market linkage between relationship, the impact could also spread to other countries of the stock market. Also, the company the bond market, commodity futures market, foreign exchange market and all kinds of derivatives market, and also produce linkage. Therefore, the risk of subprime mortgage crisis makes itself the evolution of systemic risk.
Subprime mortgage crisis caused subprime lenders and investors and the loss of the CDO MBS, this information will be reflected in their share prices, stock investors appear once panic, hard to avoid the impact on the stock market. Due to the stock market linkage between relationship, the impact could also spread to other countries of the stock market. Also, the company the bond market, commodity futures market, foreign exchange market and all kinds of derivatives market, and also produce linkage. Therefore, the risk of subprime mortgage crisis makes itself the evolution of systemic risk.
