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Showing posts from March 14, 2007

And Now For Something Completely Different...

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Business Times - 15 Mar 2007


Subprime loans crisis offers some lessons

Rising defaults on non-traditional loans cast a pall over the nation's financial sector

By LEON HADAR
WASHINGTON CORRESPONDENT

SOMETIMES you don't need a professional economist to warn you that there might be an economic problem on the horizon. When a friend had told me in 1998 that he was leaving his (quite lucrative) regular job to become a 'day trader' and that he was pulling some of the money out of his pension plan to invest it in a new and promising dot.com company, I had a strange sensation of hearing a balloon burst. I decided that it was time to sell my 'aggressive' technology stocks.

So when a few months ago, one of the nice ladies who cleans my apartment once a week told me that she was about to purchase a home in Washington, DC, I was once again hearing a balloon burst.

The cleaner is a young immigrant from El Salvador, unmarried and with three kids, a member of what sociologists …