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Thursday, November 15, 2007

How risky U.S. mortgages contaminated the global markets

November 15 2007
Rising delinquencies on mortgages sold to less creditworthy homebuyers in the U.S. have contaminated markets from the UK. to China and Australia, triggering a global credit crunch.
  • February 8 - HSBC, one of UK's largest banks, disclosed bad credit charges of almost $11 Billion as delinquencies on its U.S. subprime mortgage portofolio climbed.

  • April 2 - New Century Financial, the second U.S. subprime mortgage lender files for bankruptcy

  • July 18 - Two Bear Sterns hedge funds collapse amid subprime losses. The funds controlled, through leverage, more than $10 billions in mortgage related securities and other credit derivatives

  • July 19 - In Australia, Basis Yield Alpha hedge fund slumped 14% because of subprime turmoil

  • July 30 - In Germany, IKB Deutche Industriebank suffers big losses on subprime-related holdings

  • August 9 -In France, BNP Paribas freezes redemptions on three investment funds that had about a third of their assets in subprime mortgage related scurities

  • August 20 - The three-month US Treasury bill yield slumps as money market funds dump subprime mortgage-backed commercial paper

  • August 23 - Bank of China, one of the four biggest lenders, discloses $10 Billion in US subprime mortgage exposure

  • October 15 - Nomura Securities, Japan's biggest broker, reports $622 million in subprime mortgage loss and plans to pull out of the US residential mortgage-backed securities market
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