... Fear and foreboding remained the dominant mood at the conference convened by the University of Southern California (USC). "I don't worry about the stock market," said economist Richard Green, chair of the USC Lusk Center for Real Estate. "I'm worried about [bankers] who are not willing to lend money," he added. He cited the widening spread, or surcharge, charged by banks on short-term loans to other banks, which has risen in the past year from 0.65% above the cost of funds to a prohibitive 4%.
While each of the experts cited different causes for the near-breakdown of the banking and capital-distribution system, their diagnoses turned out to be surprisingly similar. Economist Raphael Bostic, a professor at the USC School of Policy, Planning and Development, blamed what he called "multi-party" investments like mortgage-backed securities, typically made up of hundreds of separate mortgages, none of which are known to "end-user" investors...