Prophetic, no ?

I just happened across this post of mine from earlier this year, before the dread words "sub-prime" emerged into public consciousness, in which the following passage appears:

"Today, a bank can grant a leveraged loan with impunity, since it can offload the credit risk. And market demand for that risk is insatiable. The form of credit derivative known as the collateralised loan obligation, or CLO, feeds on just such loans."

To which my reaction is: That "insatiable" demand will surely not last for long. After all, the market for securitised UK home loans was affected by the big blow-out in the housing market c.1990, was it not ?

The current turmoil in the world's stock markets is a result of that "insatiable" demand going sharply into reverse, mainly because investors have belatedly realised that money was being lent with wild abandon.