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Commentary

Welcome to Subprime Phase 3

May 23, 2008

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After Phase 1 of subprime in Aug 2007, and Phase 2 in Feb 2008, we are now going into Phase 3 of the crisis.

I’ll explain later about why I think so, because I’m feeling terribly tired today. June-July 2008 should be when it all comes out. Only this time it will not be related only to subprime. This time it will not be related only to the US.

Hints: The usual suspects are oil, inflation and commodities. We have as guerilla warriors US bank further losses from MBS and CDOs, huge foreclosures and loan resets coming up, NPAs in India rising, politics, failure of big-assed companies and banks, and a return of the carry-trade-unwinding.

Coming soon to a theater near you.

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