Subprime:

Subprime loans are no-prime loans or the loans at high risk.

• Institutions provide high interest loans to people who have low credit scores. These loans run into high risk in difficult market times such as credit crunch of 2008.
• Subprime mortgage loans are similar in risk profile as subprime loans mentioned above.
• Late 2006, subprime mortgage industry entered what observers refer to as meltdown.
• Lowering house prices over several years made people default on the loans
  Steep rise in rate of subprime mortgage defaults and foreclosures caused more than 100 subprime mortgage lenders to fail or to file bankruptcy.
  
  Why Subprime hit other markets?
  
  US Banks and lending institutions had repackaged the subprime debts and sold these as attractive securities and investment engines that were snapped by EU and Asian markets.
  
  
• So when crisis hit subprime mortgage industry, those who had bought into these so called growth engines found their investment valueless.
• Unable to assess values of such properties led to uncertainties and banks stopped lending to maintain credit lines.
• Market paranoia and credit holding led to credit crunch

Who is responsible?
Federal: Unable to monitor and regulate the market
Lenders: Greed led to such loans
Wall street: For backing securities based on high risk subprime loans
Loaners: for taking loan that they can’t repay, but they can’t be blamed.

Socialist and Communist Vs Capitalist

Yesterday, my roommate Prasad called me a capitalist. I jumped at the opportunity and asked him to define himself. As soon as he declared himself as socialist, I asked him to take out his cheque book and donate 200 dollars for my charity organization. He is a smart guy so it was easy to trap him, he agreed with heavy heart:).
Isn't it fun, a capitalist asking a socialist to contribute forcefully for a charity organization that the capitalist supports and raises funds for. I know it sounds confusing but that is because definitions were not used correctly.

later, we had a discussion on socialists, communists and capitalists. As per Prasad, Ratan tata and Ambani are hard core capitalist but Murthy sir is a pure socialist. My view, to which Prasad agreed after 3 hours, is that Tata and Ambani may be capitalists but still they contributed more to Indian society than communist turened capitalist whom he termed pure socialist.

As per Prasad, a capitalist is worse than socialist because capitalists carries people forward for his own good, welfare of society is a by product for him. I mean common, why should one bother that capitalist wants his betterment if he is anyways carrying society with him. Once capitalist can do more for society than a socialist would do while thinking.

At least Prasad and I agreed on one fact that communism may not be successful any more.
Also, as far as I am concerned, old definitions of communist, socilaist or capitalist belong to a bygone era. Now, no one is in black and white, we have various shades now and hence no pure breed are left. What we have are opportunists, the most dangerous but successful breed of all.

I respect Murthy sir but it seems the new breed started around same time when he jumped from communist bullock cart to capitalist's jet airplane. Still, no doubt he did lot for India, but as a by-product.