Oil prices begin to fall. Is this a turning point or trouble point?
The WSJ notes that “High prices for gasoline and other petroleum products are beginning to erode growth in global oil demand, noticeably in the U.S., despite rapid economic expansion world-wide.” It’s about time that $70 oil had an effect on consumption: this is what high prices are supposed to do. Bears might be optimistic that falling demand = lower oil prices to follow, perhaps we should worry that the cure will be worse than the disease. When the growth engine sputters, watch out for credit risks.

And how does this correlate to credit risks?Freddie Mac reports that 88% of all refinanced loans in the first quarter were cash-outs, with homeowners taking more money out of their homes. For the first time in five years, more than half of these cash-out refinancings came at a higher interest rate than the original loan. Some homeowners are switching from adjustable rate to fixed mortgages, to try and get the jump on interest rates-and swallowing monthly payment hikes of 70% or more.