The buyers of "prime" debt these past few years (hedge funds, China, etc) thought they were buying stable well-researched loans, because they were 80/20 (or so they thought).
The problem (as the bag holders will now find out) is that they homedebtor who took out the loan actually put 0% down. He got a second or piggyback loan from another lender for the other 20%.
So Prime actually equals Subprime in many cases. Maybe the majority of cases.
My question is, why isn't this being reported, and why do "analysts" state that they don't expect the Subprime meltdown to spill over to Prime, when we all know that they're one and the same?
The problem (as the bag holders will now find out) is that they homedebtor who took out the loan actually put 0% down. He got a second or piggyback loan from another lender for the other 20%.
So Prime actually equals Subprime in many cases. Maybe the majority of cases.
My question is, why isn't this being reported, and why do "analysts" state that they don't expect the Subprime meltdown to spill over to Prime, when we all know that they're one and the same?
