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The Subprime Drama Continues, but for How Long?
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The Subprime Drama Continues, but for How Long?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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The headlines refuse to go away. Almost every day, a new twist seems to appear in the subprime crisis drama. This week, the investment arm of the government of Abu Dhabi announced an infusion of .5 billion to acquire a 4.9% stake in Citigroup, which has been slammed by enormous losses in the credit market. The announcement came on the heels of a report from Bank of America that the subprime mess is about to get messier as interest rates “reset” — or rise — on more than 0 billion worth of adjustable rate subprime mortgages. Has the crisis run its course? Knowledge at Wharton asked that question and several more to Richard Herring , a professor of finance at Wharton and co-director of the Wharton Financial Institutions Center . Herring spoke recently at a meeting in Rome about “the darker side of securitization.” Knowledge at Wharton : Let’s start with the headlines.…

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