The Day After

Mkts cratered yesterday as the spineless and undercapitalized/over leveraged mkt participants were all leaning on the bailout going through. Call it a rescue package or whatever, but it does not help the average US citizen. In fact, the homeowner up to his eyeballs in debt is in the drivers seat. They can just stop paying their mortgage and and then wait for the bank to try and foreclose-good luck as the bank probably has no paperwork regarding the titile to the property. The mortgage has been packaged and re packaged and probably repackaged again. It will take months if not years to put all the pieces back together. Wait unitl the majority of subprime borrowers and then Alt-A borrowers and then credit card borrowers and then Auto borrowers go through the same process and then realize that if they stop paying, the banks/financial institutions have recourse only to the pledged asset. Given that the pledged asset is upside down, highly unlikely the banks are in a rush to take the asset back.