Statistics and stories

Every day the media is filled with moving stories of homeowners in distress, a life crisis for those involved. Statistics on the extent of the subprime mess still do not suggest that the devastation overall is as overwhelming as it is for an individual caught up in this. The stock market has priced in the problem. New statistics today on auto loans are predictable but worth noting. In just one month, delinquencies on auto loans to top rated borrowers in 2006 rose from 2.6% to 4.5%. Looking at market performance, that's priced in as well. The inevitable rise in credit card losses that will follow mortgage and cars is also, to some extent, already in equity prices. Back to a comment several posts ago, the equity market can go up while the disparity in U.S. wealth widens.