Subprimes, overconfidence

Morgan Stanley Stake a Major Move for China

NEW YORK -- China has joined the ranks of Singapore, Norway and the United Arab Emirates as nations that have purchased big chunks of Wall Street. In the wake of a $9.4 billion writedown related to subprime mortgage losses, Morgan Stanley (MS: 50.08, -0.01, -0.01%) said Wednesday it has accepted a $5 billion investment from the Chinese government’s investment company China Investment Corporation (CIC). The investment gives CIC a 9.9% stake in the firm.

FT.com / In depth - UBS takes new $10bn subprime hit

UBS on Monday became the second big investment bank in a fortnight to be bailed out by a sovereign wealth fund when it announced a SFr19.4bn ($17.2bn) recapitalisation plan after revealing another $10bn of losses on subprime mortgage securities. UBS was forced to turn to the Government of Singapore Investment Corporation (GIC) and an unnamed investor from the Middle East for funds to shore up its balance sheet after the fresh losses emerged.

The woman behind the subprime bailout - International Herald Tribune

Sheila Bair never expected to find herself in the middle of the subprime mortgage mess. Bair has spent most of her career in Washington, where she's built a solid reputation as a financial regulator, most recently as assistant secretary for financial institutions at the Treasury Department. And she had been nervous about subprime mortgages years before it was on the radar screen of other regulators. (...) That describes Bair to a T. She took office in June 2006. Fast-forward to last week, w...

Harry Potter and the crisis over subprime mortgages

Voldemort can only be killed once Harry finds each of these objects, known as horcruxes, and destroys them - and the act of destroying them is itself fiendishly difficult. After nearly a year of the subprime crisis, that sounds dreadfully familiar. Subprime loans, which should never have been offered to the borrowers, were split into many complicated financial instruments, and distributed, or hidden, worldwide. The battle for investors and regulators has been to identify where these subprime "ho...

2007 subprime mortgage financial crisis - Wikipedia, the free encyclopedia

The subprime mortgage financial crisis of 2007 was a sharp rise in home foreclosures which started in the United States during the fall of 2006 and has become a global financial crisis within a year. The root of the crisis started with lending of subprime mortgages. In contrast to prime mortgages in which the loan is given based on the income and credit of the borrower, subprime mortgages are issued based primarily on the value of the house with the income and credit of the borrower. As long ...