Sub-prime

(adjective)

Designating a loan (typically at a greater than usual rate of interest) offered to a borrower who is not qualified for other loans (e.g. because of poor credit history).

Related Terms

Examples of Sub-prime in the following topics:

  • Global Impacts

    • To provide additional context to the global adverse effects of the sub-prime mortgage crisis, of 65 countries that record and report GDP only 11 escaped a recessionary period between 2006 and today.
    • As this map illustrates, many international markets fell rapidly into decline as a direct result of the U.S. sub-prime mortgage disaster.

  • Causes of Banking Crises

    • Stock Market Positive Feedback Loops: One particularly interesting cause of banking disasters is a similar positive feedback loop effect in the stock markets, which was a much more dynamic factor in more recent banking crises (i.e. 2007-2009 sub-prime mortgage disaster).

  • Causes and Immediate Impacts of the Crisis

    • The recent financial crisis, commonly referred to as the sub-prime mortgage crisis of 2007-2008, was borne of the failure of a series of derivative-based consolidation of mortgage-backed securities that encapsulated extremely high risk loans to homeowners into a falsely 'safe' investment.

  • Recovery

    • The 2007-2009 economic crisis has had far-reaching and profound effects on both the domestic and global markets, primarily as a result of the sub-prime mortgage disaster originating in the United States.

  • Defining Macroeconomics

    • Economics is comprised of many specializations; however, the two broad sub-groupings for economics are microeconomics and macroeconomics.

  • Defining and Calculating CPI

    • Goods and services are divided into categories, sub categories, and sub indexes.

  • Examples of Price Discrimination

    • Instead of supplying one price and taking the profit (labelled "(old profit)"), the total market is broken down into two sub-markets, and these are priced separately to maximize profit.

  • Principle-Agent Problem

    • For the principal, agent inefficiency results in sub-optimal results and low welfare.

  • How Fiscal Policy Can Impact GDP

    • If the builder receives $1 million and pays out $800,000 to sub contractors, he has a net income of $200,000 and a corresponding increase in disposable income (the amount remaining after taxes).

  • Impacts of Surpluses and Shortages on Market Equilibrium

    • There are substantial business risks inherently built into the concept of surpluses, as the general outcome will be either selling off inventory at sub-par prices or leftover unsold inventory.