The sub-prime debt crisis continues ...
I see no reason to revise my basic analysis of the "subprime debt crisis" from last August; we're still waiting for:
A full accounting of how much bad debt there really is.
The loans are all being re-examined, grudgingly, to see which are OK, which can be salvaged at a lower rate of return, and which simply need to be foreclosed upon, with the attendant losses (not total, but I'm told that foreclosure usually results in a 50% loss on the outstanding loan, so the lenders would really prefer not to foreclose unless they have to).
Enough of the holders of the identified bad debt to own up to it.
Once a majority of them have (say, $600bn worth), I bet the credit markets will unfreeze.
Until then, the wild ride driven by The Fear continues.
Hang on.