A lot of people are making a big brouhaha about the sub-prime mortgages but I frankly can't get worked up about it. Some people who should never have been buying a home or at least as much home are losing their homes. They took on more debt than their finances could allow. Mortgage companies made some obscenely risky loans, they are going out of business. As a result home prices are falling. Bummer but big woop. Home prices were way out of whack in the first place because people were spending beyond their means, now we are seeing a correction. For some this correction will be painful but that is their own fault.
I do fear "corrective" policy actions that are likely to ensue. There has been some talk already about bailing those who have defaulted on their mortgages with a government subsidized loan. That's a brilliant signal Washington can send to the public. Make boneheaded financial decisions without fear, the government will rape sensible taxpayers on your behalf.