October 05, 2007

It really is about subprime subprime

Sir in order to better understand the current “subprime mortgages” difficulties it is important to remember that there is something such as a very prime mortgage that can be awarded to subprime creditors and that in fact the problem is that the mortgages to the subprime creditors were in fact very subprimely awarded; and many even fraudulent. And this is what the credit ratings agencies should have been able to catch; independently of the statistics of the subprime creditors; independently from the strength or weakness of the housing sector.

Of course once the crisis gets going all subprime creditors are going to pay for it, most especially if they keep on being targeted as the sinners.