From Webster’s (you almost knew this was coming, right?):
expect
transitive verb 1archaic: AWAIT 2: to anticipate or look forward to the coming or occurrence of <we expect them any minute now> <expected a telephone call> 3: SUPPOSE, THINK 4 a:to consider probable or certain {my emphasis} <expect to be forgiven> <expect that things will improve> b: to consider reasonable, due, or necessary <expected hard work from the students> c: to consider bound in duty or obligated <they expect you to pay your bills>
To say something is "expected" does NOT imply that it is "guaranteed". What it does do is to alternatively convey the message that (in this case) a percentage of loans "are at risk". Expectations do not always come true (as all risk is not warranted).
For example: I expect to be stopped by 3 traffic lights on my way home as there are ten lights and all the data I have tells me that I get stopped at about 30% of lights. Will that happen? Who knows? But, I'm predicting that I'm "at risk" of being stopped at 3 lights. (Or, I could say that I expect to be stopped at 3 lights.)
I believe the "highlights" have been largely on the wrong terms. Here are a couple different ways the analysis' sentence could have been written. What changes in your mind when the highlighted words are changed? Is there a certain amount of increased "expectation" with the first?
"…about 19 percent of the 7.7 million ARM's taken out in 2004 and 2005 are at risk of defaulting."
"…about 19 percent of the 7.7 million ARM's taken out in 2004 and 2005 might be at risk of defaulting."
Both convey "risk" with very different levels of certainty.
If this analysis did not "expect" these loans to default, then he in turn would not consider them to be "at risk". What PS used here is called an "inference". Apparently not as effective (in this case) as a direct quote, but certainly easily deciphered and not worth this much effort to attack someone's whole motivation and credibility.
Interesting analogy with Iraq and the troops. However, not entirely accurate, nor complete. No, we don't expect all the troops to die (even though theoretically, they are all at some level of risk. However we do expect some of the troops to die (I'd bet there's even a percentage floating out there somewhere), which is the true use of a measure of "risk". That "some" is what an analysis "expects". Similarly, every loan is at some "risk" of default, but we don't expect all of them to default, do we? No, only 19% of them apparently in this case.
So, I'd be inclined to say that the analysis is more at fault here for using "risk" as a term to define what he actually "expects" in loan defaults, as "risk" can be attributed to all loans, not just 19% of them (there are varying degrees of course which is the real issue here and why an inference for the stated "19% of loans are at risk" is appropriate). Poway Seller is actually MORE accurate in asserting that this analysis "expects" 19% of these loans to fail.
