Sentences with phrase «subprime debt»
Subprime debt refers to loans given to borrowers with low creditworthiness or a history of not being able to repay their debts on time. These loans typically come with higher interest rates or less favorable terms compared to loans given to borrowers with good credit. Subprime debt is considered more risky for lenders because there is a higher chance of the borrower defaulting on the loan. Full definition
Taking on subprime debt for buying a car is simply a bad financial decision.
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A money market fund that invests in subprime debt increases the risk that its share price could drop below $ 1.
Bloomberg Magazine, in «Unsafe Havens,» reports that money market funds run by Bank of America Corp., Credit Suisse Group, Fidelity Investments and Morgan Stanley owned over $ 6 billion of CDOs with subprime debt in June.
Former SEC Chief Accountant Turner says investors have cause to be concerned about money market funds» holding subprime debt.»
CDO commercial paper, often loaded with subprime debt, pays higher returns than corporate paper, and it paid as much as 6.5 percent in August.
The transformation of Fannie Mae, Freddie Mac, the FHA and the VHA into the new subprime debt provider has caused a shortage of homes under $ 500k, or under $ 600k in «high price» zones.
Joseph Mason, a finance professor at Drexel University in Philadelphia and a former economist at the U.S. Treasury Department, says subprime debt in money market funds is far from safe.
Das says that because so much subprime debt is held by CDOs, there is constant risk that the value of the investment can drop or collapse....
Deerfield's three Buckingham CDOs have directed $ 1.5 billion, or 40 percent of their $ 3.8 billion in assets, into subprime debt, according to their trustee reports.
Inability to qualify for better credit options means that they are increasingly turning to subprime debt choices like payday loans.
Merrill succumbed to its own stunning, bullish bets on subprime debt and was taken over by Bank of America in 2008.
Citigroup, however, the bank that spectacularly blew itself up with toxic derivatives and subprime debt in 2008, became a 99 - cent stock during the crisis, and received the largest taxpayer bailout in U.S. financial history despite being insolvent at the time, today holds more derivatives than 4,701 other banks combined which are backstopped by the taxpayer.
That statement would clearly be more reassuring to Americans had not the largest bank in the U.S. in 2008, Citigroup, blown itself up while lying to the public and its shareholders about its exposure to subprime debt and holding more than $ 1 trillion in assets off its balance sheet.
After topping 6000 in August 2007 on the hype and hope of voracious consumer demand during the subprime debt bubble, the Chinese Shanghai Composite Index collapsed 74 % to 1585 by October 2008.
«Simon Black» (his nom de plume) wrote a piece the other day accusing the bankers of being idiots for letting the subprime debt issuance get out of control again.
The paper matures within three months, and after that the fund doesn't hold any subprime debt, unless Wilson decides to buy more.
Bruce Bent, who in 1970 created the first money market fund, The Reserve Fund, says no money market fund should invest in subprime debt.
As recently as June, two AIM money market funds owned $ 2.64 billion of CDO commercial paper that was invested in subprime debt.
If 5 percent of a fund's holding is subprime debt, and in a worst - case situation that asset collapses, then the value of the fund could drop to 95 cents.
When it's all said and done, it is quite possible those investing in low - risk ABCP or some sort of money market fund may end up taking a worse beating than those who went into CDOs and subprime debt.
A week later, several major financial institutions, including the Bank of America and Wachovia Corp., revealed a new round of write - downs connected to subprime debt and both said the damage would affect 2008 results.
In early November, for example, Citigroup booked $ 11 billion in losses tied to subprime debt.