Subprime Mortgages

If you have been following the "tip of the iceberg" subprime mortgage disaster in the United States but aren't sure how it works check out this funny presentation: http://www.scribd.com/doc/2073735/Subprime-for-dummies. It accurately depicts how these derivatives work and subprime is only one aspect of it. There's a lot of other smelly derivatives in the financial system. Why governments around the world should bail out bankers and Wall Street when these things go pear shaped is beyond me. Highly risky business is just that and they deserve what they get.