Is Subprime the New Y2K?
Here's an interesting opinion on the subprime shakeout.
I tend to agree with what he has to say. To some extent. Unfortunately, the subprime market isn't coming apart in a vacuum. Loan defualts are putting foreclosed housing onto an already weak market, stricter underwriting guidelines are taking potential buyers out of the market, and uncertainty over where the market is going is keeping others out. A continued drop in demand in the housing market could lead to declining prices which could cascade into lower consumer confidence, lower consumer spending, and lower corporate investment.
I'd like to skip all that messiness if possible, but I think there's certainly the potential for the subprime mess to have a wider reach than some may think.