So what ? Who got hurt ? Bear Sterns investors took that hit. Those folks signed “big boy” letters and knew their risks.
Heck, a small business owner faces risks every day too - look at the success vs failure statistics.
No, subprime defaults will hurt, but you can’t ameliorate stupidity and greed. Maybe next time those so greedy for big gains will think a bit more about the risks they take on. There’s a reason bonds have ratings, you know, and you ignore them at your peril.
Ah, but the ratings are far from infallible. There have been many, sudden, multinotch downgrades of AAA rated CDOs with subprime mortgage assets as underlying securities. The rating agencies have come under severe criticism, again, for reacting after the fact.
Like after Enron and Orange County, when they filed for bankruptcy.