Bruce Krasting Fri 2009-09-04 19:11 EDT
Debt Repudiation -- On the Table
In the Week in Review section the NY Times had a piece by David Streitfeld titled ``When Debtors Decide to Default''. I thought it was an important story. The NY Times put the issue of Debt Repudiation on the table. Exactly where it belongs. The author also contributed a new adjective to describe many of America's troubled borrowers, ``Ruthless Defaulters''. This definition comes to us from the ``lending'' side of the equation. I think that is a misguided definition by the industry. I don't think they know what they are up against. Yet...Debt repudiation is the biggest systemic risk we face...the default rate on mortgages in excess of $500k is going to explode this fall...the CC numbers would follow. Broad based debt repudiation is a distinct possibility.