Has the banking sector purged the subprime poison?

A frightening array of Q3 results will have taught banks a valuable lesson: don't lend to people with no income. But is this earnings season the final chapter of the subprime story. Don't count on it, says Adrian Ash.

Phew! That was close. For a moment there, it looked like the collapse of the subprime mortgage market was going to wipe billions off financial earnings for years to come.

The bad debts were stacked up like poisoned berries gathered by a poison-crazed squirrel during the housing bubble of 2003-2006. Going bad fast in summer '07, they threatened to wipe out consumers, investors and businesses everywhere in a slow-motion replay of Japan's 'zombie' banking deflation.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Adrian has written all things gold related from if it’s worth buying, what the real price of gold should be and what’s the point of gold for MoneyWeek. He has also written for other leading money titles on his gold expertise including Business Insider, Forbes, City A.M, Yahoo Finance and What Investment Magazine. Now Adrian is head of the research desk at BullionVault, a physical market for gold and silver for private investors online.