1. handle_it said...

Clearly the banks best interests are in lending money. The securitized method of off-loading existing debt is broken so therefore they will have to one way or another destroy the debt. Once the housing market accurately reflects peoples ability to pay then sanity will prevail. The big question is how will the debt be destroyed and at what consequence ? Some talk of hyper inflation and others regard the solution as an inevitable mass conversion of currencies with increased border reduction. One thing does seem certain and that is uncertainty over the next few years. Markets don't like the prospect of change and humans in general react in illogical and unpredictable ways in the face of real or perceived hardship.It seems to me that whatever the eventual outcome lessons will undoubtedly have to be learned or the cycle will continue to repeat its self. We seem to have governments forced upon us that perpetuate economic models that encourage greed and fear. Options for change seem at best limited.