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Scott Jagow: Investors are waiting on some more housing numbers this morning: existing home sales for July. Friday, we found out new home sales were up almost 3 percent. It was at least a small bit of good news that helped finish off Wall Street’s best week in months.
The Dow and the S&P 500 were both up 2.3 percent for the week. The NASDAQ gained almost 3 percent. Today, the Asian markets followed up with some decent gains. European shares are higher as well, but volume is pretty light. The London markets are closed for a holiday.
Whatever good news there is about the housing market, one ominous question still looms: Is it at all safe for investors to wade into the subprime waters? Steve Henn has more.
Steve Henn: $600 billion of subprime loans are out there, floating around in the global financial system, waiting to bite another bank in the backside.
That attitude poses a problem for the creditors and bankruptcy officials who now have to liquidate big bankrupt lenders like American Home Mortgage.
Who wants buy up the billions in subprime mortgages these companies once held? Who wants to swim with the sharks?
Tom LaMalfa: That is the $64,000 question in the market today.
Consultant Tom LaMalfa at Wholesale Access says many lenders are terrified of buying loans out of bankruptcy that could default.
But Ron Greenspan who works with banks hoping to sell off these loans says there are buyers out there who think they see bargains.
Ron Greenspan: A lot of smart money thinks so.
And that money’s coming from hedge funds and private equity.
In Washington, I’m Steve Henn for Marketplace.
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