It can be said that every business cycle must end in excess. While that may seem like an generalization, since the 1940s it seems to be quite true. Though it's impossible to predict the cycle and even more impossible to break it, other than to ride it out, we in the private sector are obsessed with doing both. No surprise then that many in the financial sector are calling the sub prime lending fall-out "the end" and warning everyone that unless the Federal Reserve takes quick action the debacle will spiral out of control.

Of course those that scream the loudest have the most to lose. When Bear Stearns overreacted in the wake of the meltdown of two of its hedge funds many began to believe that fallout was imminent in the broader industry. Much like Enron and WorldCom, the catastrophe would mushroom into the largest market meltdown imaginable.

However, as you may remember the world did not end. The loss was very significant to those with close ties to the situation and it did prompt some knee-jerk legislation. On balance however most of us were largely unaffected by the collapse, even as a customer. More importantly the world did not end and the financial markets did not send us into the great depression.

So who will be affected by the meltdown? Obviously lots of folks working in the mortgage and investment industry are going to lose their jobs. To put it plainly that sucks but life goes on and most will eventually find another job. It's also true that some folks are going to lose their homes, but those borrowers would have defaulted whether or not the hedge funds imploded. The people that will really take it on the chin are those that seek to borrow money with less than stellar credit. They will find it increasingly hard to finance homes and while it won't be the end of the world it will likely depress the spirit of those involved.

Still the question remains whether or not the sub prime meltdown with "cause" a recession. Chances are high that we will experience one within the next year. Whether or not this latest setback was the "cause" is a matter of debate. I tend to conglomerate all of the contributing factors and circumstances as the reason for a downturn and I steer clear of assign ultimate blame to any one event. Ultimately the reason for the recession is worthless as we've proven time and time again that we can no more prevent a recession than accurately predict when one will occur.