Quote of the day; Dillon Radigan CNBC

Dillon Radigan: 8:50 AM PST (CNBC):

"Traders across the world are demanding a market solution to this problem. We collectively, 300 million Americans (Banks and Individuals) have about 46 trillion dollars worth of houses that we own as a group. It is possible that those houses are only worth 45 or 44 trillion dollars. We don't know because there is not a public market for the bonds that back our homes. The traders are demanding the rollout of a market for these assets.

How do you do that?
The Federal Reserve could use public money and demand public disclosure in an electronic market that lets everybody from the capitalists in our own country to those around the world, Dubai, China, and all the rest - to bid on these assets. The consequence of doing that would be meaningful markdowns for certain banks in America. In order to avoid the cascading effect of that, with the fear that would precipitate in the banks, the traders suggest that you should clear these trades through the federal reserve so that in the event that a bank must fail as a result of the new marketplace marks on these bonds the federal reserve can supervise an orderly disposition of those assets and allow the healthy banks with capital to resume lending.

Until we acknowledge that we are long 46 trillion in houses (and they may not be worth that) and can define the market for the assets so that we know how much we owe and allow the capitalist system to bid on it - the traders will not be satisfied nor will anyone who believes fundamentally in free markets. That's the umbrella here. The housing stock in America may be worth too much."