Greenspan expects subprime problems to spread

• US begs China to Buy Subprime Mortgage
• Greenspan expects the problems in the subprime to spread to the other parts of the economy, notably when home prices continue to decline. Greenspan: “If prices go down, we will have problems - problems in the sense of spillover to other areas,” Greenspan said yesterday in Florida. While he hasn’t seen such spreading yet, “I expect to.” 
•  "Jeffrey Kirsch of American Residential Equities, a company specialising in buying delinquent loans, says foreclosing a property can take more than three years. He doubts the housing market will bottom out until the first quarter of 2009." source: economist.com
• Mutual Funds willing to Risk Heat from subprime loans: "A number of mutual funds hold very high-rated slices of subprime-mortgage securities. Some of the biggest holders include the $257 million Franklin Strategic Mortgage Portfolio and $929 million Franklin Total Return Fund. The two funds hold about 19% and 17% of their assets, respectively, in securities tied to subprime mortgages. The $2.4 billion Principal Investors Bond & Mortgage Securities fund and $113 million Schroder Enhanced Income Fund each keep about 15% of their portfolios in subprime mortgages."
• The ABX "BBB-" 07-1 index, which is tied to loans made in last year's second half, slid to a 45 bid in midday trading, below its record 48.64 low close last Wednesday, traders said.