Upside Down Cakes and Other Surprises April 4, 2007 Dear Investor: We believe the chance of a recession has increased as the recent subprime shakeout points to more real estate pain ahead. As lenders tighten standards in the wake of defaults (classically closing the barn door after the horse has bolted), the virtuous cycle that formed the bubble for the past ten years has officially reversed: Credit tightening will lead to more defaults, which...