Life has been so dull since the nation’s major banks had their last existential crisis a year or so ago. Right now, it’s like watching a beloved rerun.
We know how the story is most likely to end. The banks will lose billions. It will take a decade or so to drain the swamps — also known as the balance sheets of institutions like the Bank of America and Citigroup — of overvalued and underperforming assets. In the meantime, however, the government will probably jump in and save the banks from themselves once again.
But this time, the bailout will be more subtle because the regulators don’t have to come up with cash. They just have to persuade a few judges to bend the rules a little bit while the banks foreclose on people’s homes.