ARMs.  Adjustable rate mortgages.  

That's what sub-prime borrowers got.  US lenders -- that is, the inviduals with families, bills, and maybe more than a touch of greed who MAKE their money lending money, and have long since been paid for having done what they did -- had zero incentive to explain what an ARM might mean if interest rates went up.  "If."  As in, they were so low that that there was only one direction they could go.

Now interest rates have once again risen, taking ARMs with them.  Suddenly, folks who barely cleared the hurdle  to start with can't clear it any more.  

= default. Defaults.  Many defaults.  And bad news for anyone not knowing any better than to buy that sort of paper.  But remember: those who did already got paid for doing it, just like those who arranged the deals to begin with already got paid for doing it.

This is not rocket science.  But it might better be rocket science.  Therein, it's just a matter of extremely predictable physics: inertia, momentum, gravitation, thrusts, and trajectories.  Very difficult to infuse much BS into basic constant variables.

In this econ meltdown, I cannot fathom how so many folks seem to be scratching their heads or something else and wondering "How did this happen?"

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The best argument against democracy is a five minute conversation with the average voter.
W. Churchill