This comment summarises the current situation reason for market panic quite well.  How and why anyone is willing to invest billions with no knowledge of the underlying investment is frightening. Canadian Banks & Insurance One reason for the sudden nervousness about the securities is that in many cases the holders don’t know what kinds of debt they have. Given the surprises in the U.S. subprime market, investors are panicking and they don’t want to own asset-backed commercial paper any more. However some of the biggest investors in the market are the banks. Analysts say that gives them a major incentive … Continue reading Sub-Prime woes defined

As expected Banks are tightening their lending standards.  Its ironic because those that suffer are not impacted by the sub-prime matter.  Their personal circumstances have not changed one iota.  This change is purely a reflection of tighter money markets, which drives up Banks capital costs, and then the risk assessment and pricing groups re-calibrating their yields. Loan standards tighten | csmonitor.com Since the beginning of the month, lenders have tightened their standards. They are now very reluctant to make high-risk loans to individuals with spotty credit records. They’re also requiring higher down payments, meaning that home buyers need to have … Continue reading Lending standards tighten for everyone