"This is no time to be an academic!"

[MODU]

This is going to be the problem.  Many subprime mortgage lenders will feel a bite when foreclosure rates increase, but it isn't to say that they hadn't already planned for this.  However, that doesn't mean it will be a crash in the housing market simply due to subprime loans.  There are many which are making their payments and/or restructuring.  It will come down to money management by both individual home owners and the lenders.  This goes back to living within your means, and not buying a house that costs an additional $200K simply because you can get a loan for it.

[MODU]

Blast from the Past...

The company that started this topic was bailed out this past Friday, precipitating a fall of almost 50% in its stock value, and will probably cease to exist this coming week, either bought by J.P. Morgan or J.C Flowers, or if there are no buyers, most likely bankruptcy.

JP Morgan has agreed to acquire the company for $2 per share

It was worth $57 on Thursday, and a year ago was worth $150.

Yeah.  I wish I had shorted that stock.