It’s all subprime’s fault. You knew that, right? The stock market goes down?
Subprime. The CDS market gaps out? Subprime. The LBO market closes? Subprime.
Treasury yields fall? Subprime. You stubbed your toe getting out of bed this
morning? Subprime.
What can we learn from reading a story headlined
"Wall Street Skids on Subprime Anxiety"? Honestly, I think the only
thing to learn from such reports is that for the foreseeable future, every
stock-market drop is going to be blamed on subprime mortgages. It’s the new
shorthand for "stocks went down and we don’t know why".
But Justin Fox has found
the real peach today. According to Bloomberg,
The Canadian dollar fell for a fourth day as investors sold commodity-linked
currencies on speculation U.S. subprime mortgage losses will slow the world’s
largest economy.
Yep, the Canadian dollar fell against the US dollar on subprime worries.
Or, to put it another way, the US dollar rose on subprime fears.
In other words, the subprime mess now explains not only assets going down,
but assets going up, too! I honestly wouldn’t be surprised at this point to
see someone blame the outcome of the Japanese elections on the "subprime
meltdown". It’s lazy, and it’s boring. Can we move on, please?