Australian Local Councils hit by US Sub Prime Mess

I came across this article today about the sub prime mess. Australian Local Government, charities, churches, hospitals and nursing homes are all affected by the sub prime crisis.

This is pretty frightening stuff because many of the them are up to their eyeballs in CDOs and have not realised the debts yet.

Some claim they are still earning income from their CDOS but the article says they expect our local councils to be in severe trouble when they have to take the loss.

The article says there are about $320 million in CDO’s on council books alone and some councils have as much as 45% of their assets in these instruments.

About 20 councils are taking a class action against the companies that sold the CDOs.

You can read more on at the Age under Subprime pain sweeps the world.

Look out for much much higher rates in the coming years ;-(

Review what the Subprime mess is all about –

A One Page Explanation of the Subprime Mess

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