Yesterday we were presented with a report that ut a glossy shine on the subprime crisis. In part – and the main emphasis on the report – was that the worst was over for the subprime crisis. We questioned the validity of the report, seen nationally and on Google News. Today, we are told the opposite – “About half of recent subprime and Alt-A borrowers may soon owe more on their mortgages than their houses are worth or hold minimal equity, putting $800 billion of debt at greater risk of default, according to Barclays Capital.”
People wonder exactly what they are supposed to believe. Granted, the great expense of the winter heating season is over for many households, but the high cost of gasoline and food are a bigger problem for many. Perhaps tainted subprime paper has been identified in the secondary market, but we seriously doubt that the worst is over.