In 1998, the first wave of big subprime profits (Yankee fans should remember Phil Rizzuto commercials for The Money Store) came to a sudden end when subprime lenders lost their financing as investors fled to quality in the wake of Russia's unforeseen default on it's debt and the bailout of Long Term Capital Management.
As it turned out, there were massive default rates by subprime borrowers during the first subprime boom.
Nearly all major subprime lenders went bankrupt before the end of the 1990s. The story of the second subprime boom - during the recent unprecedented housing bubble - had the same ending (with a whole lot of other consequences thrown in)...
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