This is a slide that's not based on an event, not based on a loss, not based on an economic downturn, it's merely based on one word: subprime
Don't get confused over that term. Subprime is a catchword for the media trying to play and spin the bad data coming in. In the last week a lot of Prime MBS has been downgraded to Subprime status. That coupled with CFC reports stating that Prime HELOCs are beginning to go unpaid gives a glimpse that at somepoint the media will have to turn to the use of the term Prime to explain things. When that happens the shat has hit the fan.
Don't be confused by the GDP report. Consumer spending which is normally 70% of the GDP came in at ~1%. It went negative in June which likely means bad things and likely a bad Q3 report will be coming. The Q2 GDP seems snowed and fudged and will likely be revised downward.
