A surge of foreclosures in California has some economists concerned that the fallout will be long lasting and potentially wound the whole economy.
The 11,033 foreclosures in the first three months of the year represent an 800 percent increase over the same period a year earlier.
I does seem like an 800% increase of a negative trend has to be serious. Of course I know that high yield bonds have had remarkably low default rates for the past few years. Risk spreads have been very low, in part due to the liquidity swirling around the fixed income market, in part due to low defaults, and in part due to "hiding" risky mortgage debt into mortgage backed securities.