The Casino of Housing coming down

Worthless paper you're caught with;
Until it spins down to the African sea;
You can have cash, if you beg real hard;
And you're Morgan Chase or B of A or Citi;
Yes, Redwoods talk to me,
Say it plainly, the auction-securities,
Are worth less now, then when they were trees.

(Spoof, Jefferson Airplane, "the Human Name doesn't mean shit to a tree")


The Casino of housing is coming down for very simple reasons. The mortgages now are sold and packaged as Mortgaged Backed Securities. But, now, the banks buying them, or others, have little way to determine what these MBS (Mortgaged Backed securities) are worth. Perhaps the housing market will collapses a lot more.

This is why the collapse of the auctioned-backed securities is such a disaster. The big banks stopped running the auctions, and $380 billion of paper is totally frozen. It used to be AA paper, now it is totally worthless.