Hold Your Breathe

So, how long can you hold yours?

The Sub-prime Money Trail

You might be wondering about the recent market volatility and its relationship to your bank account, specifically, your stock portfolio. Well, to those who have not follow closely to the US market, here is a simple trail that can lead you back all the way to the beginning. I call it the 'Subprime Money Trail'. Enjoy the ride!

It all started out when subprime borrowers have bad credit records, and cannot easily get a standard loan package with the banks.

Mortgage brokers then seize the opportunity and "induce" subprime borrowers to take up mortgage loans with special 'teaser' rate.

Mortgage loans are then "packed" into CDOs. Banks purchase subprime loans & take on CDOs in pursuit of higher yields.

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And guess what? Some sincere folks in other parts of the world are happily buying up all these 'bad debts' through their trusted financial institutions and advisors with their hard earned money.

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So the trillion dollar question is: Where will this trail leads us to in the coming months?

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Stay tune, my friend. More coming...