Some More Info on Subprime:
Below are two links providing more information for those trying to better understand the subprime problem.
Challenging and Emerging Risks in the Home Mortgage Business
Comments of the Center for Responsible Lending
One can't underestimate the effects this could have. If many of these subprime loans prove unsustainable without the hope of refinancing, this could increase defaults, which could decrease home prices, which could spread the default risk up the credit quality ladder. Meanwhile, mortgage insurers will be affected, along with banks, which pretty much spreads out to everywhere. Consumer demand, which has been so reliant on asset monetization, can drop. That branches out to affect the whole economy. I wonder if Japan 1990 started this way... If anyone knows of a good book describing the run-up and consequences of the Japanese depression, please do share.
Comments on SFK Earnings tomorrow after I listen to the Conference Call.