THIS JUST IN: Give it up for the Long Johns

This 8 min. movie both explains subprime better than we ever could, and has us rolling off our chairs.

Don't miss it, it’s too funny!!!

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A new Finance Round-Up has been posted at TOD:Canada.

Big US banks continue to try to put together a rescue fund in order to avoid a firesale of the assets backing off-balance-sheet structured investment vehicles, but the voices of the critics who would like to see an 'orderly repricing' of these assets grow louder. Alan Greenspan , who now says the credit crunch was "an accident waiting to happen", is notable among them.

It remains to be seen how orderly such a repricing of assets would be, as well as how broadly and how quickly financial contagion could spread the fallout.

US loan default problems deepen

The Financial Times is reporting that poor quarterly results from banks across the US over the past two weeks suggest credit problems once confined to high-risk mortgage borrowers are spreading across the consumer landscape, posing new risks to the economy and weighing heavily on the markets.

US banks have raised reserves for loan losses by at least $6 Billion over the second quarter and by even larger amounts from last year, indicating financial executives believe consumers will be increasingly unable to make payments on various consumer loans. Banks are adding to reserves not just for defaults on mortgages, but also on home equity loans, car notes and credit cards debts.

"What started out merely as a subprime problem has expanded more broadly in the mortgage space and problems are getting worse at a faster pace than many had expected," said Michael Mayo, Deutsche Bank analyst, reported the Financial Times.