Yeah, I know, cheesy title. I can't help it, I've been on vacation for the last week and gotten out of the blogging habit. Nonetheless, you know how pundits and talking heads on CNBC and Bloomberg are always saying that the sub-prime mess is "well contained?" (The underlying assumption is that because loans have been securitized they are no longer on bank's balance sheets.) Let us lay that assumption to rest:

Commercial banks, she points out, have let their loan-loss provisions sink to 20-year lows while increasing their exposure to real estate to record highs. Mortgages, she reckons, account for a tidy 55% of total bank loans -- and that doesn't include the trillion dollars worth of mortgage-backed securities on bank balance sheets.

Read the whole post. Hell, it's enough to make you buy gold and go hide in the Idaho wilderness.