Lehman Brothers Denies Subprime Exposure, HSBC Silent
Back on the 19th of July Lehman Brothers rejected suggestions that they are exposed to subprime problems. Another notably silent voice, other than quarterly and semi-annual results, is HSBC. Analysts at Household - HSBC Watch say the silence might say more than one realizes. Are we to assume HSBC cut Lehman out of the picture after HSBC bought Household International in 2003? Shall we assume that Lehman Brothers would not touch HSBC after the Household International $484 million (USD) predatory lending settlement?
Between 1998 and 2000, Lehman Brothers recognized the profit potential in backing predatory lending. Investment Dealers Digest reported that Lehman had risen from third place in 1998 to become the top underwriter of residential asset-backed securities, with a total of more than $12 billion in issues in 2000. Lehman worked closely with First Alliance and Conseco Finance, and formed a relationship with Household International.
Some suggest Lehman Brothers and HSBC are quiet for a reason. Eventually people will discover where subprime mortgage loans got their start. Even if Lehman Brothers unloaded all subprime assets the history is there and HSBC will again pay a price for association with Household International. Economic fallout could follow. Since HSBC publicly stated that they (HSBC) would export the “Household Model” to other countries, the world’s local bank could been seen in a totally different light.
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[…] Last week Household - HSBC Watch said HSBC has been quiet. Now we are beginning to discover why. HSBC, which was barely a player in the derivatives market back in 1998, now has $5.65 in credit risk per dollar of capital. According to one source close to the matter says HSBC does not have the capital to cover its net credit risk, the primary measure the OCC uses to evaluate the risks these banks are taking in their derivatives trading. […]
[…] 9 August, Household – HSBC Watch: Some suggest Lehman Brothers and HSBC are quiet for a reason. Eventually people will discover where subprime mortgage loans got their start. Even if Lehman Brothers unloaded all subprime assets the history is there and HSBC will again pay a price for association with Household International. Economic fallout could follow. Since HSBC publicly stated that they (HSBC) would export the “Household Model” to other countries, the world’s local bank could been seen in a totally different light. Back on the 19th of July Lehman Brothers rejected suggestions that they are exposed to subprime problems. […]
[…] Back on the 19th of July Lehman Brothers rejected suggestions that they are exposed to subprime problems. Another notably silent voice, other than quarterly and semi-annual results, is HSBC. Analysts at Household - HSBC Watch say the … …more […]