Mortgage Crisis Spreads Past Subprime Loans

From conversations with some American friends I am not so sure (anecdotally) that people are quite getting the breadth and scope of what has happened (is still happening) in the mortgage and housing markets. You really just have to look at a chart (thanks to Calculated Risk) to see it - this is an historic collapse. And it continues to spread, as this new article from the NY Times explains:

"The credit crisis is no longer just a subprime mortgage problem.

As home prices fall and banks tighten lending standards, people with good, or prime, credit histories are falling behind on their payments for home loans, auto loans and credit cards at a quickening pace, according to industry data and economists.

The rise in prime delinquencies, while less severe than the one in the subprime market, nonetheless poses a threat to the battered housing market and weakening economy, which some specialists say is in a recession or headed for one."

This is going to be a lot more than a little downturn and maybe a few layoffs. My fear is that it is going to the kind of event that may take a decade or more for the country to properly adjust to - or that it may actually be an end to business as usual as we know it (which of course is probably silly - but - possible).