Anybody remember what got this whole, economic avalanche going? Remember resets? You know, when adjustable-rate mortgages make their adjustments, and borrowers suddenly find they have to make real payments instead of the Monopoly money payments they've been making? It's why people blame this malaise on "sub-prime" borrowers (as opposed to blaming, say, the folks who convinced people to lend the money in the first place by telling them the borrowers were prime; but I digress).

We had a big pile of resets in 2007, and the wheels promptly fell off the wagon. Nobody's mentioning that Round 2 is coming up, though. Starting in April, there will be large numbers of resets that will run to the end of 2011. First the Prime ARMs take off, then the Agency and Option ARMs. Unlike Round 1, there are effectively no Sub-Primes in these resets. Some people think that makes it better. I think it makes things worse.

First, the chief problem Round 1 uncovered was that everything seemed to have been misclassified. Sub-Prime was everywhere, packaged as Prime, and nothing was worth what everyone had thought it was worth. Now we shall have the supposed "really good loans" resetting, and the question everyone should be asking is, "How many of them will prove to be garbage?" And when more gold turns to garbage, how much more confidence will drain out of the markets?

Second, when Round 1 happened, it was just the US. This time the rest of the world has already has already been sucked in. There's no way to get out and ship your investments to a safe haven.

Third, counter-measures have already been exhausted. With Round 1, we still had room to maneuver. Since then, capital markets have collapsed, rates have been slashed, debt has ballooned, and the US alone is hemorrhaging a half-million jobs per month.

Fasten your seatbelts, it's going to be a bumpy ride. And yes, I know she said "bumpy night" in the movie.