It is not that the subprime meltdown will hurt nice areas directly.
Lenders are tightening lending standards all across the board (I am working on a $3+ million loan, under 65% LTV, mediocre credit, and it is not easy). This causes “friction” in commerce, and makes it harder for everyone to obtain financing.
You should be aware also that a lot of people with wealth do not have good credit. I know one very wealthy professional family that does not believe in credit cards. They have a hard time borrowing money, so they just pay cash for things.
The classic book on the subject, which helps explain how credit is not wealth, is of course:
The slowdown in the economy, slowdown in credit, and slowdown in rise in asset prices will affect everyone.
You can read many, many articles on how this slowdown is not confined to the subprime sector, including Nouriel Roubini’s excellent website:
