Peaking non-OPEC Production

Homeowner Vacancy Rate

MEW

Household Debt

$ Index

Housing Starts

LBO's and MBO's---- liquidity , liquidity , liquidity

CDO's

In explaining the huge explosion of Subprime Mortgages , you need to follow the instrument that has fueled the surge . That is the CDO ( Collateralized Debt Obligation ) , a derivative constructed from a variety of debt instruments , in this case mortgages ( RMBS--- Residential Mortgage Backed Security ) . The instruments are packaged , through "financial engineering " , into a tradeable security which banks , brokers and hedge funds can use to invest and/or hedge their debt portfolios . The more profit these instruments make the brokerages and investment banks , the more were sold to investors .
It's not just Mortgages which are packaged into CDO's , so are the debt tranches of the LBO's and MBO's so prevelant in the Private Equity world . Without such innovative instruments , there wouldn't be as much merger activity as we are now witnessing . For better or worse , these instruments will be here to stay

Volatility

Credit Spreads

Stock Buybacks

Net issuance of equities (new issues minus buybacks) by non-farm US corporations has reached a record -$602 billion, a fourteen-fold increase in net corporate buybacks since 2003, financed by a record assumption of $437 billion in new debt. Is it any wonder that the S&P 500 bottomed out in 2003 and has been rising since ?

Subprime Loan Implosion

Fed Governor Susan Bies says sub-prime defaults are "the beginning of the wave"

$55.6 Trillion

Return of the Yen , and the unwinding of the Yen-Carry Trade

After the Bank of Japan raised overnight rates 25bp's , from 0.25% to 0.50% , we should have figured that there would be some rally in the Yen , and with it an unwinding of the "Yen-carry trade" . As the "carry" currency for hedge funds and proprietary trading desks , any change in rates and/or the underlying currency , would bring on some unwinding of " funding " positions .... and didn't it do a job on the markets this week !!!!
Japan's Nikkei 225 Stock Average lost 5.3 percent in the past five days, its worst weekly performance since June . Hong Kong's Hang Seng fell 7 percent , its longest losing streak in 17 months . China's Shanghai and Shenzhen 300 Index fell 9% Tuesday .
European stocks had the worst week since the beginning of the four-year bull market in October of 2002 . The Dow Jones Stoxx 600 Index , a basket of 600 European stocks , fell 5.2% for the week .
In the US , the S&P 500 fell 4.4 % , the Dow lost 4.2%, and the Nasdaq dropped 5.9%.
In Latin America , the Morgan Stanley Capital International index of Latin American shares fell 8.5 percent for the week .
Emerging market debt , measured by the Emerging Market Bond Index , widened to 189 bps above US Treasurys vs. the all-time record low 154 bp's set just a week ago on February 22 .
In the commodity world , Gold fell $45 to $644/oz. and Silver fell $1.45 to $13.28/oz. So much for their "safe haven" status ....