We've seen the unthinkable in just a few short years.

• Housing meltdown
• Financial meltdown
• Stock Market meltdown
• Dollar meltdown
• Massive government bailouts and exorbitant stimulus
• The death of Indymac, Countrywide, Washington Mutual, Fannie Mae, Freddie Mac, Goldman Sachs...
• Humiliated realtors, discredited NAR, destroyed homebuilders
• Inflationary and Deflationary Risks
• Oil at New Highs
• California Disasters
• Massive layoffs across the board
• Fraud
• Poor retail sales.
• Consumer sales and confidence in the toilet.
• High delinquencies and foreclosures...
• Higher credit card defaults.
• Sky-high unemployment
• Hedge Funds Blowing Up...

What's next? How about:

• Hyperinflationary Risks, which will send oil and gold skyrocketing
• Arrests
• More Ponzi schemes uncovered?
• Another $700 billion needed?
• Government failure
• Collapsing Treasuries
• Even more poor retail sales, low consumer sales and confidence
• Higher delinquencies and foreclosures...
• Higher unemployment
• A larger wave of residential housing mortgage failure
• Auto loan failures and repossessions...
• Billions of dollars in credit card defaults...
• Commercial mortgage failures and foreclosures on such things as malls and office buildings...
• Credit default swaps that required no money down will lead to financial chaos...
• And, already there's talk of a 2009 recovery? Not likely... and that's because of Option ARM resets, which could send the S&P 500 to 600 and the Dow to 6,500.

"It shouldn't come as a shock when mountainous Option ARM and Alt-A loans begin resetting and the second leg of the credit crisis begins.

Alt-A loans were given to borrowers with credit scores of between 620 and 700, and included the option of interest-only loans, option ARMs, and no documentation loans that required little if any documentation for loan approval. Ninety percent of those that got an Option ARM in 2006 provided little or no documentation.

Ninety percent!

And it's estimated that only 60% of Option ARM borrowers make only minimum monthly payments. Others estimate that up to 80%.

Say a borrower makes minimum payments on a $600,000 loan. That loan could easily be a $750,000 loan within two years.

And we're supposed to be shocked when this problem ends in the second credit crisis?"

And we're not alone in our thinking... Business Week recently said:

"With the subprime mortgage crisis already crippling the U.S. economy, some experts are warning that the next wave of foreclosures will begin accelerating in April, 2009. What that means is that hundreds of thousands of borrowers who took out so-called option adjustable-rate mortgages (ARMs) will begin to see their monthly payments skyrocket as they reset. About a million borrowers have option ARMs, but only a fraction have already fallen due.

That was the catch to option ARMs; borrowers were offered low initial payments that would recast higher after several years. Many home buyers thought they could resell their homes before their payments increased. But instead, many of them got trapped. According to Credit Suisse, monthly option recasts are expected to accelerate starting in April, 2009, from $5 billion to a peak of about $10 billion in January, 2010. Some of these loans have already started to recast. About 13% of option ARMs that were issued in 2006 were delinquent by 60 days by the time they were 18 months old, Credit Suisse said.

And there's only one way to profit from the coming chaos - put options.