The Economy Will Continue On

"Second-lien Loans" are the new group of buyers who are going belly up. These people were getting another one of the magic variants that drove the markets in the past few years. A couple of points about these loans that gives me a bit of solace - 1. There were far fewer given out than the prior ARM sub-prime loans that went crazy (and still are to this day). 2. The rate of default is relatively low. I am hoping this is the first half of the big curve and not some very early beginning to the slope upward on the rate increase chart. Our economy has weathered a lot. The rate of increase on the defaults is still increasing but an end is already seen. The market needs to react. It has overstepped itself a bit. Let it cool.

Then buy. As always.