The Subprime Debacle, Part 2: New Testimony Reveals Citigroup Knew Exactly What Crap It Was Selling

Sunday, October 24, 2010
By Paul Martin

John Mauldin, Thoughts From The Frontline
BusinessInsider.com
Oct. 24, 2010

At the end of last week’s letter on the whole mortgage foreclosure mess, I wrote:

“All those subprime and Alt-A mortgages written in the middle of the last decade? They were packaged and sold in securities. They have had huge losses. But those securities had representations and warranties about what was in them. And guess what, the investment banks may have stretched credibility about those warranties. There is the real probability that the investment banks that sold them are going to have to buy them back. We are talking the potential for multiple hundreds of billions of dollars in losses that will have to be eaten by the large investment banks. We will get into details, but it could create the potential for some banks to have real problems.”

The Rest…HERE

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