It was my understanding that San Diego had a much larger than average share of these types of ARMs.

Coming after the results of the current wave, which is only now peaking, I think the results of the second wave will really grind the market psychology down. It’s the knockout blow of the one-two combination.

On the flip side, after a bad spell that lasts this long, the rebound could be stronger than the conventional wisdom would otherwise indicate. That wisdom consisting of “everybody learned their lesson and won’t make that mistake again”. Beware of that one – I thought that way after the bust of the 1990s and I was exponentially wrong.