Subprime Meltdown Hammers HSBC
Anyone who thinks HSBC is not bleeding because of HSBC Finance Corporation, formerly know as predatory lender Household International, is sadly mistaken. The industry, and ripples through the entire U.S. stock market and financial industry show otherwise.
Anxiety intensified Friday about the toll the sub-prime mortgage meltdown is taking on the financial industry at large, as Bear Stearns Cos. pledged to lend $3.2 billion to rescue a hedge fund battered by rising defaults on home loans. The jitters sent stocks tumbling across the board.
“We know that these holdings are not unique to Bear Stearns,” said Drexel University professor Joseph R. Mason, co-author of a recent study warning of dangers in securities backed by home loans to high-risk borrowers. “It would be hard to find a Wall Street firm that hasn’t created similar funds.”
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[…] (HSBC was the first banking group to reveal, in February this year, that it would pay a hefty price for having entered the U.S. subprime mortgage market - more than $10 billion in write-offs for bad loans.) [ see more ] […]