Sunday, June 2, 2013

Deja Vu All Over Again: The Sub-Prime Mortgage Market Is Heating Up Again

Could the 2008 Crunch have been a dress rehearsal?  The Daily Telegraph’s Katherine Rushton reports America's sub-prime mortgage market is beginning to reheat, leading investors to warn of the possibility of a renewed financial crisis.

Demand for sub-prime mortgage bonds, which are not backed by US government-controlled mortgage lenders Freddie Mac and Fannie Mae, has surged since the start of last year, as yields on treasury bonds remain low. Returns jumped 41pc last year, and have climbed a further 12.7pc this year, according to data from Barclays. The demand has led to fears that investors could be taking risks so big that they will pave the way for a repeat of the financial collapse…..

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