a sign the sub-prime mess is behind us!

May 12, 2008

just hours ago, HSBC Holdings announced first-quarter earnings, giving indication into the current and future financial impact into their impact of the sub-prime debacle.

HSBC Bank was hard hit by exposure to sub-prime mortgages and warned of potential heavy losses going forward as a result.

Yes, the company remained cautious in their outlook going forward. Chairman Stephen Green said, “its not when the US housing market may recover and that inflationary pressure from food and energy prices are also a concern for the economy”.

However, the effect on earnings as a restult of sub-prime exposure was less than experts and analysts predicted. In fat, the HSBC stock was trading up nearly $3/share early today (Monday) as a result of the better than expected results and the less than expected fallout of the sub-prime part of the financials.

What does all this mean?

Wall Street seems to interpret this, at least today :) , that although, their may be some further pressure on the housing market, that possibly the worst of the sub-prime market and the tightening of credit, may be moving into the rear view mirror.

Wall street made predictions in terms of the direction of interest rates, and the banks took in determining lending standards . I do not think they got it wrong. However, if today’s HSBC news, it seems that they corrected these important factors enough to offer some stability to both the housing and credit markets.

Analyst Alex Potter, said, the “outlook statement is very muted” , however, “the U.S. performance was well above worst fears.”

I urge you to be cautious as the future is still a little unclear. We have some unique  issues in Phoenix, Scottsdale, Tempe, Fountain Hills, Mesa, Peoria, Glendale, Paradise Valley that differ from the rest of the Country.

However, if you have been planning on buying a home, can negotiate a great price and most importantly, can afford your fixed mortgage payment, this may be the time to buy that you have been waiting.

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Copyright © 2008 By James Wexler, All Rights Reserved. *a sign the sub-prime mess is behind us!*

Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.

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Written by James Wexler · Filed Under Articles, Lending / mortgages 

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