Subprime effective shutdown?

"For all practical purposes, the subprime market is in the process of shutting down."

From:
http://biz.yahoo.com/ap/070402/economic_forecast.html?.v=2


About time! However, I know that like some sad B-flick monster, it will be back some day. :( Hopefully with some sane regulation.

Also from the same article:

Shulman expects housing starts to hit 1.33 million units this year, down from a previous forecast of 1.48 million units.

"For a housing market that has already witnessed housing starts decline by 36 percent, this is not good news," he wrote.

However, the article is less bearish than I am. I'm expecting starts to hit a wall this summer. Not stop... But drop to the 1.0 to 1.2 million range.

As to mortgages, sub-prime always leads higher grades in defaults; we haven't seen the big wave of resets... yet. I'm not expecting much to happen with prices until June. But by then... everyone will know RE is correcting.

Got popcorn?
Neil