If You Did Not Catch It...
This article is from last Saturday's Wall Street Journal. It is about the increased rate of mortgage defaults in sub-prime mortgages and their effect on the bond market. There is an actual index that tracks the defaults and it's deteriorating monthly. The sub-prime market is a sign of trouble for the whole mortgage market. If the defaults spread to better credit borrowers as the exotic mortgages start to reach their reset periods, the trouble could spread. In the sub-prime market, housing values are worth less than the mortgages causing borrowers to walk away. I would not be surprised to see the same scenario with other mortgages.