What was that about a meltdown in the subprime mortgage market?
This Bloomberg article reports that Fremont General has agreed to sell $2.9 billion of subprime mortgages at a net loss of $100 million. That deal comes on top of another one in which Fremont discounted $4 billion of subprime loans by $140 million. That computes to a loss of 3.5%. Nobody likes to lose money, but that simply is not the type of loss that is going to shatter a reasonably fluid bond market. Perhaps as a result, Fremont shares were trading briskly and enjoyed big gains yesterday.
I wonder what Gretchen will say about that?