Malkiel

Why Sub-Prime Doesn't Worry Me

Analysts have been pointing out for a decade that the economy was being held up by consumer spending enabled by high credit card balances, and mortgage refi's have been allowing consumers to reset those balances, so if that all comes to an end there may actually come a true recession like 1991 and, if so, there may not be any profitable transactions in either stocks or real estate for a few years unless you're willing to buy and hold. That's not necessarily bad, but don't go into debt to buy that bargain real estate or equities until we see how long the shakeout looks to be...