As for the mess in the middlemen who leveraged up to maximize the fees they scoop in the process, they can theoretically get out of this alive by "deleveraging", that is amortizing the debt in an orderly (synced) fashion, using whatever profit they may still be making from more "useful" (read: sustainable) business. Of course, it means all shareholder dividends are wiped out for the next 20 years (see: japanese banks). And in practice, there are a few spectacular casualties in the deleveraging.
Deleveraging will ease the stress in the financial markets in the next year or two. But the fact that american citizens will have to send everything they make to china to pay off their debt till they die in destitution will remain forever. I expect denial, printing, conflicts... Pierre
