Emaar Properties properties bought John Laing at the very peak of the housing market. They are probably feeling like suckers right now because the slumping US housing market and the drop in dollar exchange rates have caused their investment in John Laing to evaporate. Poof, just like that.
Think of all the foreigners (Deutsche Bank, HSBC,etc…) who bought US assets. Their investments are now worthless if you count exchange rates.
HSBC bought Household Finance for $14.3 billion. When the mortgage mess began, they wrote off $11 billion. HSBC just wrote off another $3.4 billion. The value of HSBC’s American assets is now negative.
Without HSBC, Household would have been out of business a long time ago. HSBC management and shareholders have to be feeling like the biggest suckers ever born.
Will the foreigners be stupid enough to throw more money after bad? Or will they shut their US operations and move on?
Mortgage losses are expected to be $400 billion and I believe we’re only at about $50 billion in write downs so far. 1/2 of the subprime money lent will be lost. We still have a long, long way to go.
