Construction Boom: Built-In Subprime Risk

And if we really had a huge problem in subprime, it wouldn't be a question of it spilling over to prime. It would be a question of how badly Wells Fargo(WFC Quote), WaMu(WM Quote), Cerberus Capital Management and General Electric(GE Quote) have been hit. Those are the legit subprime companies besides Countrywide, which has already said it's not much of a problem. These are the lenders who are not fly-by-night mortgage brokers with no deposits to back their bad loans.

I am not minimizing the headline risk to this industry. And I am worried about employment. Any reversal of the tepid employment growth we have will change the demand side for certain and put out more supply.

But a lot of this problem is known. When a problem is known, it tends to get discounted by the market, unless the people in the media haven't done their homework.

Oops, that's a given, so there will be more headline risk ahead. But I'm beginning to believe that the knowledge of the problem is getting built into the market.

Random musings: I love the new portfolios of bandwidth and activist names on Stockpickr . ... Given the incredible explosion of ETFs, I think you need to subscribe to Rev Shark's TheStreet.com ETF Shark Alerts. The Rev and I have sparred from time to time, but without his guidance, I'm going to be blindsided by this new, important force in the markets. Take your a free trial now. ... Apple's(AAPL Quote) going much higher into the iPhone launch and on all of these stories about album declines. ... Caterpillar(CAT Quote) has momentum at last, buttressed by Citigroup's add.