Wednesday, June 04, 2008

"It's getting worse"

Sprott Asset Management has an exceptional reputation as a clear-eyed observer and interpreter of the investment markets.

So when Eric Sprott and Sasha Solunac issue a report with the following messages, it is worth taking seriously:
  • JP Morgan has tripled its loss provisions for prime mortgages (not sub-prime, but prime!)
  • Headlines in the business press are faking investors out
  • There is no precedent since the Great Depression for the credit bubble that is now imploding
  • The problems spawned by the credit bubble cannot be solved by government decree or central bank largesse
  • Enormous losses have yet to be recognized and financial institutions may fail.
Read their May 2008 report here.

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