Abstract: Should we really be surprised by the subprime mortgage crisis or is this just the result of mathematical errors when calculating risk in making a loan? This discussion will provide a basis for understanding how the mis-alignment between the risk and return relationship occurred within the subprime housing market, and will detail the many other factors including quantitative error which have produced a crisis affecting every area of our national economy. In addition, we will trace how ignoring the risk/return problems within the subprime housing market will lead to a multiplication of problems for not only borrowers within the housing market, but every participant in the economy through the stock market, banking, consumer spending, employment, and future lending practices.