Media Hype Boosts 'Subprime' to Linguists' 'Word of the Year'
Never underestimate the power of the media with a "doom and gloom" agenda - especially when it comes to such a renowned contest like the 18th annual American Dialect Society "Word of the Year" contest.
Over the past nine months, whenever there's any sort of economic turmoil in the world, the point that failures occurred in the subprime housing market is at least mentioned, if not blasted in the headline.
"‘Subprime' has been around with bankers for awhile, but now everyone is talking about ‘subprime,'" said Wayne Glowka, a spokesman for the group and a dean at Reinhardt College in Waleska, Ga. "It's affecting all kinds of people in all kinds of places."
But is it really affecting "all kinds of people?" Perhaps, at least to the left-of-center presidential candidates, but it isn't as widespread as perceived.
According to a Dec. 6, 2007, report from the Mortgage Bankers Association, subprime mortgages make up less than 14 percent of all mortgages, but 55 percent of all homes that have started the foreclosure process.
Some estimates range from $300 billion to $400 billion in losses due to the subprime market, but Bloomberg columnist John M. Berry says that is probably somewhat exaggerated.
"A more realistic amount is probably half or less than those exaggerated projections - say $150 billion," Berry wrote Dec. 27, 2007. "That's hardly chicken feed, though not nearly enough to sink the U.S. economy. A loss of $150 billion would be less than 12 percent of the approximately $1.3 trillion in subprime mortgages outstanding. About $800 billion of those are adjustable-rate mortgages, the remainder fixed rate. Subprime loans represent about an eighth of the value of all U.S. residential mortgages."
"Subprime's" time in the spotlight won't last forever. After suffering heavy losses, most mortgage brokers have stopped writing subprime mortgages altogether.
According to AP, "about 80 members of the organization spent two days debating the merits of runners-up ‘Facebook,' ‘green,' ‘Googleganger' and ‘waterboarding'" before finally voting for "subprime."