Subprime freefall a “calamity” for credit markets, FrontPoint says

by

FrontPoint Partners said in a Thursday conference call with investors that the subprime mortgage market’s freefall is a “sheer calamity” unfolding on the broader credit markets.

Until now, many investors have viewed current subprime credit problems as contained, FrontPoint executives said. But with an estimated $650 billion in subprime mortgages set to readjust to higher interest rates, the firm expects to see “far greater waves of defaults.”

Investor sentiment is now beginning to go against a variety of markets unrelated to subprime, FrontPoint said. “I think what is happening is that we are getting a complete repricing of