California is 13% of U.S. GDP

Anyone that doesn’t think what is going on in California isn’t going to hurt the nation as a whole is mistaken.

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About $750 Billion of Option ARMs Were Written, Nearly All at the Peak of the Bubble.

http://www.marketoracle.co.uk/Article11001.html

The chart that goes with that says 58% of those are held by California. So, what AP is saying is nothing compared to what is coming for California. Those resets are just getting going just as we got the bulk of subprime problems behind us.

Another article calls what is coming this.

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The Unstoppable Second Mortgage Crisis

http://dailyreckoning.com/the-unstoppable-second-mortgage-crisis/
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No wonder insiders are selling into this rally.

http://www.financialarmageddon.com/2009/06/wall-street-still-clueless.html
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Doesn’t mean it can’t go on for awhile but, make sure you are prepared to bail out if it starts falling apart. Longer term, when inflation hits CPI more, then the market will reflect that rise in prices globally. Also, it may not correct as far as some think if the fear of inflation keeps people buying in.

Related Posts:

• Want to see where GDP without the 11% jump in government spending?
• Wall Street: Still Clueless
• The long bear rally in 1930s depression.
• Lies are like debt: People can’t handle the truth, so ‘Lie to Me’ becomes mantra.
• What will cause a bottom for the market

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