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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Haim R. Branisteanu who wrote (113240)7/23/2010 11:30:59 AM
From: Hawkmoon  Read Replies (1) of 116555
 
As to the EU true that they have high leverage but in most cases on "covered bonds" representing mortgages and other similar loans.

Hmm.. since, as I understand it, Covered bonds are not much different that ABS, although remaining on the bank's balance sheet, it still causes me to wonder if they are as sound as advertised, especially when those institutions have leveraged themselves above 50:1 or greater.

I think the key is how the lending standards have been upheld and, as I understand it, there was considerable "sub-prime" lending in the PIIGs, especially in Spain and Portugal.

So it would seem that European banks were not far behind Wall St. in issuing speculative and risky mortgage loans or sovereign debt far in excess of their GDP.

Also, I think both sides are waging war against one another using CDSs, which I didn't see you address.

Again.. a pox on both their houses..

Hawk
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