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Fears of a subprime meltdown were overblown, he said in a July interview with Bloomberg News.
When people went into default in 2008, it was generally because of the exploding cost of a subprime loan.
2008 The board of the fund announces the creation of a subprime mortgage fund to aid families affected by the mortgage crisis.
The S.E.C. charged Goldman in a civil complaint on April 16 with securities fraud related to the creation and sale of a subprime mortgage security.
"As we've made clear throughout this book," he writes, "the crisis was less a function of subprime mortgages than of a subprime financial system.
The combination of a subprime shock, "untested financial innovation and leverage has led to a confidence crisis," said Pierre Cailleteau, Moody's Investors Service chief economist in London.
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Goldman Sachs misstated and left out key facts of a subprime-related security, according to the Securities and Exchange Committee, and the news sent the financial sector crashing in midday trading Friday.
Currently, subprime customers account for 4 percent of G.M. sales, in line with the industry average, but about 40 percent of the population has a subprime rating, Mr. Liddell said.
Fremont General, the parent of a big subprime lender and a bank in California, filed for bankruptcy protection on Wednesday.
Few people worry that Uncle Sam will go the way of a defaulting subprime borrower because the government, unlike other debtors, can always print the money it needs.
The days of "Alt A" loans other subprime tools are long gone.
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