Hold On To Your Wallets

HOLD ON TO YOUR WALLETS….Earlier today I was wondering if the Fed had reduced interest rates so dramatically because it believed things were even worse than the rest of us thought. I guess so:

Losses from sub-prime mortgages have far exceeded “even the most pessimistic estimates”, US Federal Reserve chairman Ben Bernanke has said.

….Mr Bernanke told the [House Committee on Financial Services] that US mortgage woes were set to continue — especially with adjustable rate mortgages (ARMs). Proceedings for about 320,000 foreclosures — or repossessions — were begun in each of the first two quarters of 2007 he said, against an average of 225,000 per quarter in the past six years.

Blecch.

Support the Washington Monthly and get a FREE subscription