News in pics.

A revisit on what the sub prime lending fallout and real estate bubble burst has done to people in US and parts of Europe.

Housing drought hits sales of multi-million pound homes in London as consumer confidence hits four-year low. Almost half of all consumers surveyed believe the economy will worsen further in six months time, twice as many people showing pessimism than a year ago.

I believe this was due and expected and this event will have far reaching effects. One should not expect that we will be out of it very soon!

Las Vegas experiencing the economic downturn.

MGM Mirage Inc., the largest casino operator on the Las Vegas Strip, told that more than 400 middle management employees would be terminated immediately in a cost-saving move. The decision will save $75 million annually and came after the company saw weakness since August at its properties, which include Bellagio, MGM Grand, Mirage and Mandalay Bay, spokesman Alan Feldman told The Associated Press recently.

The move is the largest and swiftest by a casino operator in the current economic downturn, although the use of so-called "extra board" employees such as dealers and busboys who take fill-in shifts as needed has been down citywide.Budget-tight guests have shown a tendency to spend less in all major segments of the business, Feldman said."Instead of four days, people stay for three. Instead of a five-star experience, they are going for four stars. Instead of two shows, they're going to one," he said. "There certainly is the possibility that there are people who are also making a decision to gamble less."

My take:

This was bound to happen. The sub prime has badly hit the investing upper class. Huge capital is eroded. So, the expenses on luxury will come down drastically. Las Vegas Mirage loss is just one of the many companies and sector that would soon follow the trend.

Sources: Detroit News.

The US Sub prime - In graphics

The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded.
THE NEW MODEL OF MORTGAGE LENDING

Traditionally, banks have financed their mortgage lending through the deposits they receive from their customers. This has limited the amount of mortgage lending they could do.
In recent years, banks have moved to a new model where they sell on the mortgages to the bond markets. This has made it much easier to fund additional borrowing. But it has also led to abuses as banks no longer have the incentive to check carefully the mortgages they issue.