Today , I was able to spend my time in browsing the articles which gave me a fair idea what the sub-prime crisis actually is. They were all written in a manner , which would enable a layman , like me, to at least participate in a discussion between the bears and bulls in our office.
Asking god Google about sub-prime crisis , gives you a whole bunch of results , which are at their place pretty honest efforts to educate people , but for a person like me , who has just stepped in the corporate world , it's just too much to handle. That's why , I clicked on the radio button , just below the search bar , to give me web pages from India . In this way , I could get closer to my objective of finding out how a so called "crisis" in the US of A can affect investors sipping coffee in cafeterias of Hitec City.
Out of all the search results , I chose to go with the link from Hindu (of late I have fallen in love with this daily) , which was as a matter of fact , an interview with a big shot from Deloitte ( who else can narrate the problem more emotionally ). He was very terse in explaining the problem and was frequently using the quotes which were pertinent to this situation. He started-off defining the term sub-prime , which is the pertaining to people who have low or poor credit ratings and in this context unable to avail loans for "my-own-house" dream.
An entrepreneur , who understands this difference between the demand and supply ( demand here is from the people who can't get the loans and supply is the loan itself) , jumps into the picture . As he has a good credit rating , he can get all the loan from any bank at some interest rate. The entrepreneur , in turn risks this money and gives it off to the sub-primes at a much higher rate of interest.
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