This week HSBC Holdings admitted that it would be spending more money than originally anticipated to cover subprime loan defaults -- $1.76 billion more than analysts predicted. Now there’s concern over the mortgage-backed securities that go along with these riskier credit advances, and even more concern over the housing market in general.
The days of surging home prices, buy-and-flip investors and adjustable-rate mortgages have passed, and the economy on the whole is waiting for the sector to find its footing. But with housing stocks dropping and inventories still high, “The bottom is definitely not in sight,” says John Silvia, chief economist at Wachovia. He doesn’t see the market finding a floor until the third quarter.