Totally agree, and have been watching the LBO market carefully through the same set of eyes (especially some of the failed issues in recent weeks)…The world is awash in liquidity. I tend to be a bit Austrian in my economic thought and the potential danger of this is not at all lost on me.
In my mind, this would be a big chunk of the fuel that causes a severe correction in housing…was just pointing out that even in a severe correction, the impact while severe on those holding the lower tranche bag (or the house owner losing her house) is likely more localized than we sometimes assume.
