Monday, August 27, 2007

Poll: Subprime Big Threat to Economy

The risk of massive defaults on subprime mortgages and heavy debts now poses a bigger threat to U.S. economic prosperity than terrorism, a panel of U.S. business economists said on Monday.
"The combined threat of subprime loan defaults and excessive indebtedness has supplanted terrorism and the Middle East as the biggest short-term threat to the U.S. economy," the National Association for Business Economics said.

The conclusion was based on a survey of 258 NABE members conducted between July 24 and Aug. 14 and updates one done in March.

Only 20 percent of members said terrorism was now their top concern, compared with 35 percent in March.

"Meanwhile, 18 percent of those surveyed pointed to the effects of the subprime debacle as their biggest concern, and the related issue of 'excessive household and/or corporate debt' was cited by another 14 percent," NABE said.
I have said it for months, the subprime mess will bring about recession. Who is to blame? I would say it is the financial institutions that loaned money knowing full well the borrower was not qualified to repay. Who will the government bail out when the shit hits the fan? It will be the financial institution while the homeowner is left in ruins.

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