The financial sector fraudulently originated mortgages, fraudulently securitised (created bond out of) them, and when people stopped paying is fraudulently going about taking away the mortgaged properties (which is a necessity since the loans were fraudulently originated).

We're potentially looking at insolvency for the major US financial institutions, huge class-action suits by both bond investors and wrongly foreclosed mortgagees, and the end of the rule of law and/or legal security around property records in the US.

If you take the view that the rule of law and a functioning property register are some of the key institutional factors explaining the success of capitalism in the last couple hundred years, you're potentially looking at the end of capitalism as we know it in the US.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan