If our trusted financial stalwarts have been in the kitchen, why trust the Chinese? I mean, look at the lead paint/toy recalls. (Red paint? No, no red paint. Smirk.)

Shorting is for Frank Gifford.

Perma bears don’t make any money but the ability to short keeps you in the game… you should research Robert Wilson.

I don’t remember exact numbers but the WSJ has been printing actual figures regarding how many billions in loans will reset *each* month for the next few years.

The subprime loans will continue resetting at an increasing pace until March ’08, peaking at almost $100 billion resets that month. That compares to only about $30 billion from August ’07 to put it in perspective.

Next, figure that the foreclosure process can take anywhere from 3-9 months depending on the state laws and you are in the mid to late 2008 before we are even over the hump of foreclosures.

Now, on top of this, home values will be declining. This will increase defaults for all borrowers who bought in the last couple years as they will be upside down. This includes Alt-A’s and prime borrowers.

The Alt-A’s also took out ARM’s and their resets don’t even peak until 2009! And there were more of these than Sub prime ARM’s.

Bottom line is this will take years to burn off not a few weeks of ‘write-downs’ before we’ve even started.

Other than my father being a real estate agent and sister in the title business I’m pulling all data from the WSJ.

BTW – I’m in Austin, TX and the market is still strong but getting weaker. Mostly because buyers are scared to buy a house due to the national subprime coverage rather than actual problems like other markets have.

or is there?

I’ll leave that for enquiring minds to decide