Bernanke on Subprime, Watch What I Do, Not What I Say

Location: Los Angeles
Author: IRA Staff
Date: Wednesday, April 4, 2007

The event on subprime lending put on last week by the DC Chapter of PRMIA and the American Enterprise Institute drew almost 200 people. The general tone of the discussion was bearish regarding the outlook for the housing market and the impact of a deflating real estate bubble on the US economy. We predicted that the default experience of most US banks would rise sharply in the next 12-18 months and possibly test the peaks of the 1991 period. We noted in particular that the extremely-low default rates of the larger mortgage and commercial lenders may be red flags for future credit quality.

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