Posted on 07/11/2007 12:42:35 AM PDT by xtinct
Fears of further problems in the US mortgage industry and the broader economy flared on Tuesday, triggering a sell-off in credit markets as investors sought safe havens.
Markets were rattled when Standard & Poors, the ratings agency, threatened to downgrade the credit ratings on some $12bn of bonds backed by US subprime home loans. This raised concerns of a broader repricing of risk in credit markets, leading to heavy losses for some investors, particularly in derivative markets.
Rival rating group Moodys caused further disquiet after the markets closed when it said it had cut or was reviewing ratings for $5.7bn of mortgage-backed bonds. It downgraded 451 bonds and put another 82 on review.
The dollar tumbled to a record low against the euro, hitting $1.37, and also fell against the yen and sterling after speculation that a slump in the housing market would slow the US economy. The pound traded at $2.02.
US and European stocks sold off dramatically. The S&P 500 closed down 1.4 per cent at 1,510.12.
(Excerpt) Read more at ft.com ...
Now the bank of Canada is going to squeeze another $100 a month or so out of those sitting on $400,000.00 mortgages, for extra measure, using the old "gotta cool down that inflation" (caused by sky high fuel prices) excuse, on a dollar that in reality isn't gaining against anything except a falling US dollar.
It looks like the CDN$ is doing quite a bit better relative to even the Euro over the past 3 years, and in particular the past 6 months.
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