the other day, when I admitted that I didn’t understand exactly what this whole sub-prime lending situation was, someone convinced me that the loans were being made at lower than the prime rate (sub-“prime rate”). that sounded absurd to me — how could a bank loan at less than the incredibly low interest rates that were available to prime borrowers? convinced is a strong word — I objected, and they persisted, so I stopped arguing with them (A HA! I shouldn’t have caved — may that be the last time I ever do THAT!)
anyways, as Wikipedia sayeth:
The term “subprime” refers to the credit status of the borrower (being less than ideal), not the interest rate on the loan itself.
alas, I didn’t have Wikipedia available when I was having that discussion. am I the only guy that wishes I had the Internet available in my peripheral vision at all times, just like the Terminator and his heads-up display? that should be available soon enough, I imagine.
more on why we shouldn’t bail out the subprime debacle by the chief economist at the Waffle House (??!?)…