Tuesday, April 08, 2008

The bright side of a $950 billion loss

The IMF says worldwide losses from America's blind infatuation with home ownership the subprime mortgage crisis are approaching $1 trillion. However, the losses aren't concentrated, which is a virtue of contemporary capital markets, Alex Taborrak contends
From the frozen lands of Norway's Arctic Circle to the hot sands of the Middle East and the booming metropolis of Shanghai the losses from America's subprime crisis are popping up around the world like angry whac-a-moles. The losses are large and appear larger by being found in the most unexpected of places. Today the focus is on these world-wide losses but I think future historians will focus on how the crisis demonstrated to everyone the power of integrated capital markets to diversify risk. [E.A.]