Now here come the prime defaults

david_mcmanus

http://money.cnn.com/2008/08/12/real_es ... ahoo_quote

From the article:

"The extent of how bad these loans are doing is very troubling," said Pat Newport, real estate economist with Global Insight, a forecasting firm.

"Home prices will drop for quite a while - maybe several years," he said.

And there's a strong inverse correlation between home prices and defaults, according to Lawrence Yun, chief economist for the National Association of Realtors.

"It's a feedback loop," he said. "Price declines lead to more defaults, which leads to more price declines."

Robroy

Sometimes a picture (or graph) is worth a thousand words:
http://www.istockanalyst.com/images/art ... 552307.jpg