Subprime lending is based on the support of Wall Street's old-line banking establishment. It encouraged it; it funded it. Since the mid-90s, warehouse lending by Wall Street firms is what's kept companies like New Century in business.
What we're seeing now in the subprime market is, when the Wall Street firms get cool on the subprime market, they just cut the funding and the warehouse loans vanish overnight — and that's what puts a company like New Century out of business.
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