Add as much as 7-to-1 of leverage and multiply C-BASS 2006 style RMBS by the thousands and you can see why subprime paper is a diamond in the rough.

FORBES: Sublime Subprime

For many banks this could be as bad as Plan C (an Argentine-style simultaneous default and devaluation), because losses on bond holdings might imperil their own solvency and further cut them off from market funding.

ECONOMIST: European banks