The collateral is gone but the loans are still there. The borrowers still owe the money.
As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).
Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.
Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.
This is just looking at the macro picture. Of course, it’s different house to house.[/quote]
brian – I agree w/you. It was like a disease that spread on some many sectors and everyone was touched by it in one form or another. Infection is a good way to describe it. You have mentioned the wherewithal before and it’s evident by all the NODs.
