Understanding Subprime Geopolitics

Yesterday I recieved an email from one of our Big Stick Guides, Gayle Turner, concerning Subprime Geopolitics. The forwarded sentence in the email was simple enough "I think you'll find this of interest." Gayle I love ya but maybe you sent this to the wrong person.

After reading the first couple of paragraphs I was as lost as a Japanese tourist at Disney World only this time I didn't even have the giant fold-out map in front of me. Below is an exerpt from the email.

"When the subprime defaults started to hit, the banks that had loaned money against the mortgage portfolios re-evaluated the loans. They called some, they stopped rollovers of others and they raised interest rates. Basically, the banks started reducing the valuation of the underlying assets -- subprime mortgages -- and the internal financial positions of some hedge funds started to unravel."

Okay what?

Gayle I appreciate that you think I am smart enough to understand this, but I failed miserably to do so. However, I would like you to keep sending them to me. Maybe some of your Mensa will rub off on me.