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San Francisco -- A report from a Jefferies & Co. Inc. office here acknowledges that credit and liquidity issues are likely to continue to weigh on financial stocks next year, but they believe many types of loans will perform better than sentiment suggests.
In Jefferies & Co.s view, expectations for credit performance overall are overly bearish.
But how about mortgage loans?
Thats not a pretty picture, according to the Jefferies & Co. report. Subprime and alt-A mortgage classes will likely see losses rise to record levels, the New York-based company predicts.
And the number of financial institutions seeking to bolster their capital with outside investments may become a massive recapitalization of the financial services sector.
In contrast to the last decade, we expect that many of the largest financial institutions will seek to enhance their capital positions with external capital. This may pose a challenge for smaller companies needing ...
Source: HighBeam Research, Outlook Called Not that Bad.(Jefferies and Company Inc.)(Brief...