It would have bankrupted a company 20 years ago: long-distance calls from India. Thousands of them every minute. These days, calling long distance from New Delhi is not just affordable; it's good business. A boiler room full of college graduate phone reps runs you as much a week as it would take to pay six high school dropouts a day.

Who cares if their chosen names of "Charly," "Brian" and "Abraham" do little to mask the fact that it's Bupendra, Mohammad and Aladdin calling -- wanting talk to you about your mortgage rate, travel insurance (free with your credit card upgrade) or vinyl siding.

You'd think with all the mortgage crisis talk in the media, Chuck, Brian and Abe would be out of a job. But apparently, there's no reason for them yet to worry about being able to buy their morning chapatis. Because, if anything, the number of mortgage-related calls I get at my house have actually increased over the past year.

And I don't even have a mortgage.

But what about that credit crunch that the jittery crowd of market visionaries is talking up? Given the number of people calling me to get me to switch my non-existing debt over to them, I find it difficult to believe that the mortgage debt and loan industry is quite as dead as people make it sound.

Larry Kudlow wrote last week, "Loan markets have been over-leveraged by private equity funds that during the past year or so have completed deals with too little cash equity and too much loan leverage. Bond vigilantes are disciplining the buyout mavens and forcing a credit risk re-pricing that will incentivize cash equity and discourage debt over leveraging."

The mortgage industry's post-boom downturn has injected a fresh new undercurrent of volatility into the markets... not just into U.S. stocks, but global equities as well. (After all, we do live in a globalized financial world, where your redneck neighbor's subprime ARM debt may currently be held by a Chinese pension fund managed by German pinstripes.)

Kudlow continues, "It's a healthy market-driven correction. The key point is that robust business profitability makes these over-leveraged bank loans good paper, not bad. In due course, the dust will clear and credit markets will resume functioning. Bankers will divide up these loans and resell them in tranches at handsome interest rates to pension funds, insurance companies and money managers around the world."

Meanwhile, we're stuck with the volatility in the stock market. Drops of 100 or 200 points in a day, followed by days of rising valuations in increments of 80 or 150 points. In other words, market fluctuation that gives you the chance to make money on the upside and downside moves.

 

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