Quote:
Originally Posted by IbnMardhiyah
BearStearns was the leader in subprime lending / CDO offerings.
And that was their biggest mistake - they relied on it too much, so much so that their strength turned into their undoing.
The pace at which they fell is just mind-blowingly stunning. When I saw the news today morning I couldnt even speak for several minutes, I just was totally quiet. BearStearns was one of my clients at my previous job, I used to handle their Canadian IT / telecom infrastructure and related operations.
|
We had a major high street bank here called Northern Rock almost go bust, were it not for a last minute "save" from the British government. They were dealing in funds based on subprime lending.
As in almost all things these days, the UK is only footsteps behind the US in the whole subprime thing. The subprime market is huge these days, constant ads on the TV about how we need to unlock the equity in our homes, how loans can be got even if we've been rejected elsewhere.
If it was up to me, I'd get rid of all the subprime deals and their derivatives. Even if we take our Islamic considerations out of the equation, they're such a bad idea - based on extreme short-termism and essentially what amounts to unscrupulous profiteering - and clearly detrimental for markets, locally and even globally. The problem is they're so pervasive, that increasingly, these days, a bank might not even know that the funds they're dealing with are based on subprime lending.