Word: default
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...between now and 2013, another time bomb is ticking. In a report scheduled for release on Wednesday, Deutsche Bank estimates that at least half the loans - and two-thirds of those packaged and resold as securities - will not qualify for refinancing. As a result, many borrowers will likely default, leading to losses on securitized mortgages of $50 billion or more and losses of at least $200 billion on commercial real estate loans overall, according to Deutsche analyst Richard Parkus, who authored the report. "People are only now beginning to realize there is a looming crisis," Parkus told TIME. (See pictures...
...longer a consumer and may not be able to make mortgage payments. The pace of that trend does not mean much until net new jobs are being created Third, and finally, real estate prices are falling and the rate at which people are losing homes or are going into default plumbs new depths with each set of new numbers...
...sure, Cantor hasn't escaped the biggest financial meltdown in decades unscathed. The firm was a prominent player in the trading of credit default swaps, and that market for bond insurance has been battered by the rising defaults in home loans and other debts. Worse, some politicians and regulators, irked by the huge losses rung up by AIG in CDS contracts, have talked about creating a central exchange, much like the New York Stock Exchange, where the bond insurance would trade. Some have proposed doing away with CDS all together. Those changes would significantly curtail, or wipe out, Cantor...
...just that business had been good. But bank financial statements are never that simple: Citi's overall investment-banking earnings were boosted by a $2.5 billion derivatives valuation adjustment "mainly due to the widening of Citi's CDS spreads." In somewhat dumbed-down but still utterly flummoxing language: credit-default swap (CDS) spreads represent the cost of insuring against Citi's default. That cost went up in the quarter as investors fretted about Citi's solvency, so Citi was able to book $2.5 billion in gains. Got that? Without that boost, Citi's $1.6 billion in quarterly profit would have...
...schools. “Our overall objective is to ensure that a Harvard graduate education remains accessible to talented students regardless of where they live,” Harvard’s Chief Financial Officer Daniel S. Shore said in a statement yesterday. Citing the historically higher probability of default by international students compared to American students, a Citibank spokesman said at the time that the frozen credit markets caused lenders to shy away from issuing high risk loans. HUECU president Eugene J. Foley acknowledged that the credit union will likely see higher default rates on international student loans...