Jan

30

Chart of the Day: Subprime 60-day Delinquencies

By Teresa | Filed Under Trading Ideas | Start a Discussion 

The IMF provided a market update to their Global Financial Stability Report yesterday that pretty well sums up the predicament of the global capital markets. The article contains many nuggets, along with one chart that is particularly pornographic:

What began as a test of the structured credit markets and the associated funding needs has reached a new phase — a phase where credit concerns now extend beyond the subprime sector. One way this is becoming evident is through the pressure on some financial institutions’ balance sheets following the fallout of the earlier distress. Pressures on capital combined with additional losses as delinquencies on U.S. subprime borrowing reach record levels, raises the costs and reduces the capacity of financial institutions to use their balance sheets to provide credit.

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Already delinquency rates in 2007 vintages of U.S. prime mortgages (those to the most credit worthy borrowers) are rising faster than in previous years, albeit from low levels, and other forms of consumer credit show signs of deterioration (see chart).

More: IMF Sees World Growth Slowing, With U.S. Marked Down

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