The likes of subprime operators New Century and Ownit are no longer with us, as we all know. The issue now is who to blame for the implosion. In one sense, this is an old story that replays itself every so often. Whenever lenders that are dependent on wholesale credit lines run into trouble, their credit lines dry up a bit, and that leads to recrimination. The retail lenders say they went down because the spigots were shut, and the Wall Street firms say they shut down credit because they had to. In any case, the anger is palpable, and the carnage is being felt across the country. Truly, this is a Wall Street vs. Main Street story. Securitization works, but only if the final loan to the end player continues to be paid off. If not, the ripples start.

For more:
- here's the New York Times article