Second Mortgage Disaster Looming On The Horizon

When it comes to bailouts of American business, Barney Frank and the Congress may be just getting started. Nearly two trillion tax dollars have been shoveled into the hole that Wall Street dug and people wonder where the bottom is.

As correspondent Scott Pelley reports, it turns out the abyss is deeper than most people think because there is a second mortgage shock heading for the economy. In the executive suites of Wall Street and Washington, you're beginning to hear alarm about a new wave of mortgages with strange names that are about to become all too familiar. If you thought sub-primes were insanely reckless wait until you hear what's coming.

One of the best guides to the danger ahead is Whitney Tilson. He's an investment fund manager who has made such a name for himself recently that investors, who manage about $10 billion, gathered to hear him last week. Tilson saw, a year ago, that sub-prime mortgages were just the start.

"We had the greatest asset bubble in history and now that bubble is bursting. The single biggest piece of the bubble is the U.S. mortgage market and we're probably about halfway through the unwinding and bursting of the bubble," Tilson explains. "It may seem like all the carnage out there, we must be almost finished. But there's still a lot of pain to come in terms of write-downs and losses that have yet to be recognized."

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Comments

[bbriani3842]

. . .but. . .but. . .I thought the fundamental structures of our economy were strong. . .but. . .but. . .I thought the bailout was going to help keep things from becoming worse. . .

[Eriq]

No, that's why we elected Obama and NOT McCain.

[Cinnamonape]

The fundamentals of our economy are unemployed and bankrupt.

[ShortHair]

This sucks.

[drkazmd65]

Yep,.. it most certainly does ShortHair,... especially for those of us that were 'responsible' adults.

We didn't get to join the party,... now we get to clean up the mess.

[impatient]

Just a note to remind you that people like my mom, a 78 year old widow, who emigrated here from germany and with my dad worked like a dog her whole entire life. She and my dd paid off their house, educated their kids, worked like fiends, invested carefully.... my dad died four years ago and i am pretty sure my mom has little or nothing left from what he left her.

If anyone represented the responsible adults of the world, it was my parents. So don't for one second think there's a difference between the people who are paying the bills and the people who got hurt. They are all one and the same.

I am not so worried about me. I will also always take care of my mom. But it breaks my heart to hear her say "this isn't right. You work hard all your life, and for what....."