Subprime: Liquidity crunch again...
I had a read of John Mauldin's latest letter on BP.
I have stated before that I thought with the losses from mortgages without the socialized recapitalization of the banks I believed that you could end up going to your bank and just not be able to get your money because the banks gave it to someone who could not pay it back, and they did this to everyone's money. There is no ability to cover the losses from people who are actually pay their loans back because the losses exceed the ability many times over.
Well, I thought the recapitalization was going to be enough to muddle through the mess, but this newest twist on stopping the foreclosures really changes that. And then on top of this the commercial real estate issues are basically where the mortgages were 2-3 years ago, and they further undermine the bank's solvency, to rather increase the bank's insolvency.