Mortgages ...

We've been saying this here at the Brain for years, though the assumption was it would happen earlier. The big 'economic geniuses' thought the gravy train would never stop. I betcha these were the same assholes who invested big money in the 'Internet boom' in the 90s and lost their shirts too:

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from the perspective of the loan officer, these deals were really two fers. sure, the rates were going to skyrocket but no one involved believe that anyone would ever have to face making payments at those rates. the borrowers would clean their credit, season their employment, have a track record on that newly opened company, and/or any of a number of other things that would allow them to qualify for the gold standard of mortgages, a conventional loan. or, barring that (because borrowers are human, after all) the folks would come back in in two years and we’d reset them with a new subprime, thereby keeping payments down in the comfort zone, and every one would be happy and prosperous. [my em[

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Because, in all their best-laid plans, everyone fails to consider, or even acknowledge, human nature. I don't know about your neighborhood, but in mine, every third house has a 'For Sale' sign on it.

Anybody with any common sense can see this model isn't sustainable and the only surprise is that the mortgage industry didn't collapse sooner. I have friends who are mortgage bankers for some of the biggest firms in NY. They haven't had a weekend off in a couple months. One of 'em even canceled his family vacation in fear of the market completely collapsing under him while he was gone. This bloody mess of a pyramid scheme hasn't even hit bottom yet. Look for a Chrysler-type bailout by the government before it's over.