The Good Times Are Back in the Sub-Prime Market

4 de junio de 2007

<body><div id="article"><tr><td height="23" valign="middle" width="184"></td><td valign="middle" width="185"></td></tr><h1>The Good Times Are Back in the Sub-Prime Market</h1><p>June 4, 2007 (LPAC) - <em>Bloomberg</em> financial wire is heralding the end of the sub-prime market collapse, claiming that Citadel Investment Group's purchase of troubled Resmae Mortgage Corp. for $180 million, "is the latest evidence that investors' appetite for bonds backed by subprime mortgages is returning, five months after the industry crashed." Citadel is a $14 billion hedge fund, and Resmae had filed for bankruptcy protection in February. At the same time, Texas-based Lone Star Funds has decided to cough up "about $400 million in cash" for subprime mortgage lender Accredited Home Lenders Holding Co., whose future was so bleak back in March that it fired about a third of its 4,200 employees. This is on top of the $230 million loan that Accredited got from the hedge fund Farallon Capital Management LLC.</p><p>Very likely, is that the financial industry, which had originally decided to let these "loan shark" lenders "eat their losses" and die on the vine, couldn't afford to do that without risking the viability of the entire financial system.</p></div></body>