SUBPRIME-DO YOU FEEL LIKE YOU HAVE SPENT YOUR ENTIRE LIFE THERE?

There is not much to add to the discussion about the market declines in the wake of subprime concerns. But the Author did find this story on the Reuters wire:

SEC combing Wall Street books for subprime losses: report

Friday August 10, 7:18 am ET

NEW YORK (Reuters) - U.S. regulators are scrutinizing the books of some top Wall Street brokers and investment banks for subprime-mortgage losses, according to a report in the online version of the Wall Street Journal.

Under review by the U.S. Securities and Exchange Commission is whether the firms are calculating the value of subprime-mortgage assets in a consistent way, as well as customer assets, such as those held for hedge funds, according to the report, which cited people familiar with the inquiry.

The regulatory checks, which are expected to include Wall Street's five biggest investment banks including Goldman Sachs Group, through the last earnings period few of Wall Street's big firms had disclosed any significant subprime losses even though the meltdown of this risky corner of the mortgage market has caused market turmoil, the Journal said.

SO WHO IS SUBPRIME?

A lot of the subprime collateral is right down your street. Bad loans made in “good times’ for real estate that people could not afford. The Author recently read a figure that 1 in 5 subprime real estate mortgages are in default or foreclosure.

Where are the workhouses and prisons when you need them? (For the bankers, not the debtors, perhaps?) And anyone want to wager that the American taxpayer will be forced to bail out the subprime lenders. As James Grant, of the “Grant Interest Rate Observer” has stated, private risk has been socialized in America. With the Greenspan Put and the Plunge Protection Team, there will surely be the Subprime Supper Buffet.

EXPECT THE OCCASIONAL MONSOON, EVEN IN THE DESERT OF THE REAL!