[hytem]

Subprime = ARM = adjustable rate mortgages which start out below the prime.

The whole problem was caused by Greenspan, as the media is beginning to admit. He dropped rates too low when Bush took office in 2000--after raising them too high in the year before elections. Remember "Irrational exuberance" ? When the stock market took off due to the balanced budget--and then collapsed along with business investment when Greenspan raised interest rates. There have been books written about it.

1% CDs meant 2% ARMs. But 2% ARMs became 4-5% ARMs after a few years when interest rates went up again. And some people couldn't afford the doubling of their monthly payments.

The smart people took fixed rate mortgages at 5.-5.5%. Which are now available again, by the way. The same smart people are buying real estate right now. When you hear about it, it will be too late.

That's what "sub-prime" is all about. Never mind the baloney about "unethical" mortgage companies. You always have those.

Inflation, by the way, which is always mentioned as a reason for adjusting interest rates, has been a constant through all this. No correlation whatsoever with interest rates since Clinton.

Low interest rates are necessary for business growth. But not too low.