worriedWhat's scariest, though, is the news coming out of the UK about banks pulling out of the mortgage market at present. We're already seeing signs of a flow-on, with two credit unions here withdrawing from variable rate lending. And confidence isn't boosted when a major player like the ANZ announces it took a $600M hit on failed stockbroking firm Opes, and are subsequently considering a withdrawal from securities lending.
Economic news from USA remains grim. Foreclosures are increasing at a rate of 10% each month as the sub-prime black hole continues to suck in lenders. The effects of that have been staggering on the world credit market, as credit has tightened considerably by the removal of the largest source of lending funds for a number of institutions. Even those of us who weren't exposed to the sub prime market aren't immune from the fallout, as the laws of supply and demand take effect in the mortgage securitisation market.
All in all, not a good time to be a lender.
