Subprime Illustrated
Fans of graphic representations will appreciate the BBC’s The U.S. Subprime crisis in graphics, a series of interactive charts, maps and diagrams that vividly illustrate the issue.
Topics covered include:
- the new model of mortgage lending and how it went wrong
- the rise of the mortgage bond market
- how subprime lending affected one city (Cleveland)
- the housing price crash and its impact on construction and the economy
- the credit crunch, bank losses and the bond market collapse
Perhaps the most dramatic is the depiction of house price trends:
Noting that banks have announced $60bn worth of losses as many of the mortgage bonds backed by sub-prime mortgages have fallen in value, the BBC adds that losses suffered by financial institutions ultimately could be between $220bn and $450bn, as the $1 trillion in sub-prime mortgage bonds is revalued.
The BBC piece adds to the understanding of the issue, along with the recent International Monetary Fund analysis and NERA Economic Consulting’s Subprime Mortgage Lending Primer.
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