Sunday, August 19, 2007

More Mainstream Media Amusement

How Missed Signs Contributed to a Mortgage Meltdown

The above piece makes the completely ludicrous statement that "what started out as a crisis in an obscure corner of the credit market — subprime debt, for borrowers with weak credit — managed to infect stocks and bonds."

What the? "obscure corner of the credit market"?! A picture is worth a thousand words (those $ figures are in the billions). Yes, an obscure corner of the credit market generated mortgage originations to the tune of nearly $2 TRILLION in three years to subprime borrowers. It was obscure in 1994. If lenders can get 30-cents on the dollar out of foreclosed homes, what kind of losses are we talking? Yikes.

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