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From: [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
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Sent: Fri, 15 Feb 2008 7:17 pm
Subject: Cost of the U.S. "Bubble" -- Global Economy Has Lost $7.7 TRILLION
US subprime crisis costs global economy?7.7 trillion
dollars
?
Feb 14 03:20 PM US/Eastern
http://www.breitbart.com/article.php?id=080214202021.5qwu7lx0&show_article=1
The meltdown in the US subprime
real-estate market has led to a global loss of 7.7 trillion dollars in
stock-market value since October, a report by Bank of America showed
Thursday.
The crisis, which has spread beyond US shores to banks and
other sectors worldwide, is "one of the most vicious in financial
history," according to Bank of America chief market strategist Joseph
Quinlan.
Quinlan said in the report that the losses are worse than
any in the past few decades, including Wall Street's Black Monday of
1987, the 1999 Brazilian
real currency crisis and the collapse of hedge fund Long Term Capital
Management (LTCM) in 1998.
An analysis by the US bank showed that in the most recent
episode linked to subprime, or high-risk, real estate loans to people
with
shaky credit, world market capitalization was down 14.7 percent three
months after a peak in late October.
That compared with a similar loss three months later of
13.2 percent after the LTCM crisis, 9.8 percent for Black Monday and 6.1
percent for the Brazil crisis.
The losses were also greater than those suffered after the
September 11, 2001, terro attacks, the Asian financial crisis starting in
1997,
Argentina's default on its debt in 2001 and the 1994 Mexican peso crisis.
"It could take months or even years before Wall Street and
others get a handle on the true cost of the US subprime meltdown and the
attendant global credit crunch," Quinlan said.
"While subprime loans were once thought to be
relatively small in scale and contained to just one segment of the US
financial sector, the opposite has become painfully evident over the past
few months."
A report last week by Standard & Poors ratings agency
showed global stock markets were walloped with a
collective loss of 5.2 trillion dollars in the month of January alone.
Quinlan said it is not clear that the massacre in equities
is over yet.
"Against this backdrop, any investor that has been buying
US equities on the dips over the past few
months has, in general, dug himself a deeper hole," he said.
"In the end, the current financial crisis is one for the
record books and one, more ominously, not over yet."
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