The crisis in the US subprime mortgage sector may be worse than anyone thought as there are now fears that Countrywide Financial, the biggest US mortgage lender, could face bankruptcy if conditions deteriorate.
Countrywide has being suffering growing defaults as rising interest rates made it harder for people in the U.S to pay their mortgages. Countrywide announced that foreclosures and mortgage delinquencies had risen in July to their highest levels since early 2002.
When it rains, it pours. The non-stop bad news due to the subprime crisis has made put the market firmly in a bear market, and it doesn't look like it will turn anytime soon. Market is going south guys.
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