CM has large exposure to Subprime Loans?The Business Week article this week talking about subprime problem goes out of way to cite CIBC. Are we going to get a nasty surprise from them (i.e., a press release stated a "charge" to current quarter earnings)? CM is getting into my BUY territory as it looks cheap. But momentum is negative and with most stocks they sometimes are good buys, but are likely to become "better buys" (i.e., shares to go lower in short-term). A bad press release on subprime loans could send stock below $90. So I'm waiting. I hope we get some clarification on this issue soon.
BUSINESS WEEK
JULY 9, 2007
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On June 26 managers of Credit Suisse's (CS ) alternative investment group sent an e-mail to investors reassuring them that its portfolios "have minimal direct exposure" to subprime mortgages and "do not have any direct exposure" to the two Bear Stearns & Co. (BSC ) hedge funds that had nearly collapsed the week before. As that note was wending its way through the ether, other investors were quietly trying to sell their stakes in hedge funds full of subprime securities. Some were noting that Toronto bank CIBC holds many subprime bonds. Paris bank BNP Paribas (BNPQY ) was fending off questions about its investment in the Bear fund with heaviest losses.