Hopw long wil our finacial institutions take to recover?

Implications: Three years after the change in the residential market, we have now come to the failure of the financial institutions which have supported the real estate backed consumer goods market of the recent past.  You might just as well have written the article about FNMA or FHLMC, as the same solvency analysis is probably supported.  The biggest banks and the last remaining major mortgage company and the last remaining huge thrift and the last 5 huge independent Wall Street firms are similarly impacted, maybe to differing degrees but nevertheless in difficulty.

Analysis: Do we just keep throwing money at these accelerating losses or are there mitigation efforts underway to recoup cash and capital and proceed on to greater profit programs?  The Home Builders have at least turned and burned lots to this end and restructured product in the attempt.  An impression of the financial institutions to date though might be better summarized as overwhelmed by the increase in terminal defaults.  Even if this impression is overwrought, there is no doubt that the triple threat conclusions of foreclosure, deed-in-lieu and short sales are balky beasts to administer on a one-by-one basis.  This is especially true when the most realistic view in most down markets may be that the first loss is the best/least loss and the accelerating morass of files shuts down the minds of the processing folks.  The more files there are, the less progress made per file is the rule I observe.   Look at the L.A. Times article this weekend Short Sales: A Tough Road http://www.latimes.com/classified/realestate/news/la-re-shortsale15-2008... for some recent market observations from the other sides of the desk.  This is one area where progress is not exhilarating to lender staff as continued bad news arising from good work depresses the mind.  Couple this with the pressure from above to finish and finish with the least losses as well as borrower discontent and disrespect and you have a formula for declining staff productivity.  Gridlock of the mind may be a continuing staff problem here.  
This is the future for our important financial institutions as we seek to resurrect and restructure housing.  Remember too that a similar if lesser onslaught is coming from commercial real estate financing, if not from auto financing and credit cards.  It doesn’t sound to me like this recovery will swing into being until well into the the teens as we get our minds around this problem’s total future.