This morning as I read the Globe & Mail over breakfast, I could not help but be drawn into a column by writer Harry Koza.

Mr. Koza did a splendid job of really laying bare the truth that lurks in the shadowy world of sub prime mortgages. He notes that $50 billion worth of mortgages come due in August and homeowners will have to re-new these mortgages as traditional principle/interest mortgages. No low teaser rates, no interest only schemes. Providing these mortgages can be rolled over successfully all will be OK. But if a chunk of this $50 billion ends up in default then expect more market turmoil.

I had to laugh last evening when I saw an interview with a disgruntled homeowner who had just defaulted on her mortgage. She had taken out a teaser mortgage for 3 years and her monthly payments were $1300. When this period ended, she went to roll her mortgage into a standard type structure and surprise!! her payments went up to $2000 a month. Not being able to afford this, she walked away from her house blaming the bank and the world at large for her woes. Give me a break! If you know your cheap mortgage will have to be re-set in 3 years time, maybe do some forward planning and see if you will be able to handle the terms of thr re-set. If not, then don’t buy the damn house to begin with you idiot!

Mr. Koza’s research tells him that about $50 billion in mortgage debt will be up for renewal each month from here to January 2008. And speaking of 2008, the first 3 months could be a tad messy with $80 billion in play for January and $110 billion on tap for March. So the big question then is - what percentage of these re-sets will end up in default. Hopefully not too many. But if the figure is of any substance at all, the markets will be cowering in fear for some time to come. The next several months are going to be without a doubt some of the most interesting times you have ever seen as investors. Batten the hatches and hang on.