Household HSBC Watch

According to Reuters, Hong Kong stocks arrested a three-session record streak on Wednesday, taking cues from steep falls on Wall Street, as investors shed HSBC Holdings Plc on worries that rising defaults in the U.S. subprime mortgage market could dent the global bank’s profit.

Could dent profits? Like it has not done so already? Let’s put it this way - HSBC’s purchase of Household International has hurt the bank financially, embarassed people personally, damaged the repution of HSBC, and the effects have echoed around the world. The focus, however, should not be on subprime. The problem is HSBC Finance Corporation. From shady credit card payment processing to second and third mortgages, making Household International into HSBC Finance Corporation is like dressing Usama Bin Laden in a nice suit and calling him George W. Bush. Lindsey Lohan and Paris Hilton might believe it but nobody else would.