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.