如果对美国房价造成持续的冲击，使得asset price继续下降。除了对property，CDO，mortgage backed security市场造成较大的影响外，会通过何种途径对整个经济造成影响呢？

现在的说法是，housing price的下降，使公众觉得less wealthy，而停止消费，从而使得经济进入vicious cycle。这个虽然有可能，但是我觉得在目前的状况下，这个并不太令人信服。最近的经济数据还是很好，是不是能影响到A paper也很难说，还看不出如何能够影响到其他经济层面。

1987年股市虽然无预警单日下跌，但是马上开始反弹，到1989年就完全恢复了。从那以后有许多机制防范道指一日内大跌。我个人觉得除非是经济fundemantally出了问题（目前看来似乎并非如此），应该不至于出现很糟糕的情况。。。

下一次浮动利率调高就要来临了，市场预期更多的default和prepayment将会发生。

I'm referring to the sub prime mortgage rate itself, pls correct me if my understanding is wrong.

I think most sub prime mortage borrowers take a floating package, which probably charge a lower interest rate initially (ard 4%) with annual adjustment upward to 10%+ eventually because of his bad credit history.

If the US housing market is booming, he might be able to restructure his mortage and take advantage of the appreciating asset price. But now, he could not do that; and the floating rate is keep hiking, with every hike the borrower needs to pay more interest. He may not be able to afford it and cannot sell the property and cannot refinance, that's why the default rate will go up.

Now, I think the fixed income market was hit badly, ... lower tranche of CDOs backed by sub prime mortgage become worthless, and two hedge funds have collapsed already, more are in trouble. Sub prime mortgage problem will definitely become bigger, but don't know how bad the problem will become.

Like speculatist and other people have mentioned, one problem is with the tightening of credit terms, companies are more and more difficult to raise funds. But still, I personally don't think it will shake the foundatoin of economy...

please correct me if my understanding is wrong.