Right now we’re in the equivalent of Round 2 of 12 scheduled round of exciting ARM Reset action. The champ (interest rates) has already gotten a bloody nose in the first round (foreclosures doubled) and a nasty cut over the right eye in the second round (hedgies being revalued). We still have 10 more rounds to go and the interest rates cannot be saved by the bell.

Just based on what I think will happen with financing, I’m thinking the projections for the 50% correction off peak will eventually prove out to be overly conservative. I think this downcycle will overcorrect as has all its predecessors.