Commentary: Five reasons why subprime crisis will worsen

07/30/2007 | Bloomberg

Bloomberg columnist Mark Gilbert offers five signs that the subprime-mortgage mess is worsening, including the fundamentals of leverage and the reluctance of the Federal Reserve to cut interest rates. "The debate is whether this is simply a risk re-pricing in financial markets, or something that will spill over into the broader economy," said Charles Diebel, head of European rates strategy at Nomura International Plc. "The more prolonged this credit event is, the more risks of a contagion."

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