Can anyone help with how we can see this credit contraction in terms of hard data? Ratings cuts don’t mean anything until they (inevitably) manifest themselves in higher interest rates or more loan application rejections.
Any thoughts out there on what metrics we can follow to see this occur? Is there a subprime interest rate index that we could track the progress of? Is Subprime mortgage origination dollars the appropriate metric, and if so, where can one find a monthly report on that?
I agree with everyone here that the downgrades are a very big deal-not in and of themselves, but because of the secondary and tertiary effects…on that note, amazing how quickly S&P, Moody’s, and Fitch jumped on this when the publicity about the magnitude of the coming debacle started to hit the major news agencies (look at the increasing familiarity of the news agencies writing articles linked on patrick.net over the last month). I can see this as nothing more than a johnny come lately attempt to save their asses from the huge string of lawsuits that will invevitably be coming their way in the next 3 years.
