Are foreign newspapers doing a better job at keeping track of the biggest credit bubble in history? When one reads the telegraph.uk, it surely looks like it. Let me quote an article released yesterday:

The rapid deterioration could not come at a worse time for British bank HSBC , that has admitted to putting 10 billion aside to endure a flood of bad loans. It surely looks like panic has begun to sweep the sub-prime mortgage sector in the United States after the bankruptcy of 22 lenders over the past two months, setting off mass liquidation of housing loans packaged as securities…. The cost of insuring against default on these loans has rocketed in recent weeks, from 50 basis points over Libor to 1,200, raising fears that a credit crunch could spread to the rest of the property market….. S&P is worried about “piggyback” second mortgages. “There is a potential danger of default on these deals” … Federal Feserve Governor Susan Bies warned of a “hidden” problem caused by sellers pulling property off the market. ” The percentage of homes where nobody is living in them is at a record level. So the potential for inventory correction is still very high,” she said…

While the author of this UK article writes that US Federal Reserve believes the damage can be contained, CBSMarketWatch columnist, Alistair Barr, got luckier in the sense that he got a much more sinister confession from Ben Bernanke:

… “This distress in the subprime area is a significant concern,” Ben Bernanke said on Wednesday. While noting that the contraction has yet to reach a point where it will affect overall economic expansion, the Federal Reserve chairman said he’s monitoring developments. “There are some loans that have been made that are not turning out well, and to the detriment of both the lenders and the borrowers,” he said. “We will certainly be watching that carefully and trying to provide guidance and oversight to minimize that risk going forward.” …