My husband is a NY Giants football fan. And every year, he TiVos the NFL draft. But he doesn’t stop there. He actually has it on all day while he is TiVoing it. This means that I see quite a lot of the NFL draft and pick up a lot about the draft picks and what they mean. So it caught my eye when this post by Dan Green to the Mortgage Reports Blog used the NFL draft to explain the subprime market. I’ve been trying to explain to my husband why the subprime market is in such a mess, and now I have an analogy that will work for him. It might work for you, too. Here it is:

In the NFL, no player wants to be the first to sign at his position
because — as soon as he does — he is setting the value for every other player at that position. …

This means that the first quarterback (or the first linebacker or the first running back, etc.) to sign ends up setting the value. Those taken before him are worth more and those taken after him are worth less. Brady Quinn (picked late in the first round) was waiting for others to be signed before he signed. 13 days after second round pick Kevin Kolb signed, Quinn finally succumbed, and signed a deal. JaMarcus Russell, the first pick of the draft as well as the first quarterback picked, is still waiting, but probably not for much longer, as Mortgage Reports points out:

So, JaMarcus Russell isn’t really being a jerk by not signing, it’s just that he doesn’t know what his true
value is because — until co-first rounder Quinn signed a 5-year, $20
million contract — Russell had nothing of semi-close value to which to
compare himself.

And now for the cool part. The Mortgage Reports Blog ties it all together nicely with what is happening on the subprime market, namely financial institutions around the world lamely claiming that they have no idea what their assets are worth:

Are the home loans in their portfolios worth JaMarcus Russell
money?  Brady Quinn money?  What about Kevin Kolb money?  Or — maybe!
– they worth last-QB-selected-in-the-draft Tyler Thigpen money.

Unfortunately, we can’t even come close to answering those questions until a buyer steps up and starts "signing" loans.