Foreign news and the subprime mess

I remain unconvinced that the subprime mortgage mess is at an end. I foresee a situation where we do mitigate the problem (being too cynical for believing that we escape all peril) but then we get hit when foreign problems bounce back here. It is all about a global economy now. I assume one part starts malfunctioning and the whole mechanism starts shaking and rumbling.

The Age from Australia published Crash is coming, warns top investor with the following as its lead-in:

THE man responsible for investing $41 billion of the State's money has warned mum-and-dad investors to prepare for a massive sharemarket crash.

He says a dramatic downturn is inevitable as the rapid rate of investment is unsustainable, and the repercussions of the $300 billion subprime lending crisis in the US are yet to be felt fully.

Today's BBC Online has Bank worries haunt global markets:

Markets fell sharply in Asia in reaction to Charles Prince's exit, the second departure of a leading Wall Street bank boss within days.

The Hang Seng index fell 5%, or 1,526 points, in Hong Kong while the Nikkei slid 248.56 points, or 1.5%, in Tokyo.

Shares also fell in London, Paris and Frankfurt in early trading.

The FTSE 100 benchmark index was down 37 points at 6,493.2 in London while the Dax index fell 56.05 points to 7,793.44 in Frankfurt.

In Paris, the key Cac index slipped 39.96 points to 5,680.46.

Worries over banks' exposure to US sub-prime related debts has been causing market instability for several months.