Think of collateral debt obligations (CDOs) as poisoned sausages, says the economist Nouriel Roubini, with sub-prime mortgages as the rat meat in them. With a mental effort, the layperson can then imagine these poisonous sausages, otherwise known as “toxic assets,” spreading through the world’s banks, ruining their digestions and crippling the economies they are meant to serve. — Great Read
My guess is that it will take two or three more Lehman or Greece-like crises to generate sufficient political consensus to move in either of these two directions. Don’t hold your breath.