Faith + Reason = Truth

Get used to it, folks - I don't see anything like the impact of the S&L crisis of the 80's, but this will be an ongoing story and it's only going to get uglier.  For some reason, lots of smart financial people thought it would be a great idea to make mortgage loans to high-risk, poor credit buyers.  The plan was to make these "subprime loans" to all of those individuals at a high enough interest rate to offset those that would inevitably default.  Well, it turns out that some of these smart financial people (hopefully not all of them, but it's too early to know) underestimated the amount of defaults that would actually occur, and there's going to be hell to pay.  H&R Block's earnings were impacted and it is now trying to sell its Option One Mortgage unit, which handles the subprimes, and Europe's largest bank (HSBC) has announced that it has axed the head of its North American operations as well as the head of its U.S. retail banking arm.  Here's the link to a great Reuters summary.