Subprime Shenanigans

The US fallout in subprime loans has certainly caused some problems, and there's no denying that it was the culprit in the global market plunge. However, I didn't see any traders jumping out of windows on Wall Street this morning. For most of us, here is what the market bust translates to:

● It will be more difficult to get a loan if you have bad credit. Yes, subprime borrowers-- this means you! You're likely to be considered a subprime borrower if you have a credit score under 650, have declared bankruptcy in the past 5 years, or are 24 months late in paying back your loans.

● Interest rates for loans on homes over 400k are rising, even for those with great credit. However, rates have gone down on small loans for prime buyers.

● REITs have suffered, but depending on what sort of real estate investment trusts you've invested in, it might just be a waiting game or an opportunity for cheap shares. Talk to your financial advisor.

The big worry is that these supbrime shenanigans will spiral into a recession. Alan Greenspan has dished out a comforting estimate that we have a 66% chance of bouncing back just fine. In fact, the report this morning is that Asian markets are already recovering from the lapse.