securitization

What is the US subprime mortgage problem — explained in simple terms

Global stock markets are down, investors are on selling mode, and almost all of 2007’s stock gains have been wiped out. The culprit, analysts say, is the current US subprime lending problem.

The subprime…  what? And if it’s supposed to be a problem in the US, why is it affecting markets in Europe and Asia?

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